Leveraging its position as Russia’s largest regional WiMAX operator, WCAI member Enforta stepped up its expansion efforts this year, despite the difficulties caused by the global economic recession. The operator announced this week it will expand its wireless broadband service in Russia to cover an additional 25 cities during 2010, increasing the company’s overall service ‘footprint’ to 93 cities.
Included in the 25 new cities is Kazan – the last remaining city in Russia with a population exceeding 500K that Enforta does not presently serve. The first four cities are expected to launch as early as the first quarter of 2010. Upon conclusion of these deployments 70 million people will be within reach of Enforta’s service.
The global economic crisis has certainly thrown a number of rocks in Enforta’s path. At the worst point in the crisis both the Russian equities market and the Russian Rubble had lost fully half their value. A number of the largest regional capital cities stared unemployment bordering 30%, and for a few months Enforta’s credit related subscriber churn exceeded 25% per annum.
Though the Russian economy has slowed, demand for broadband services remains good due to the growing Internet population (Russia now ranks #9 globally), and negligible broadband penetration (less than 8%).
“Russia has certainly not been exempt from the global economic crisis, but in the last few months we have seen steady improvement,” said Victor Ratnikov, Enforta’s General Director. “In order for Enforta to maintain its leadership position, we believe the time is right to renew our expansion program – particularly in some of the smaller regional capitals where our corporate subscriber base is underserved.”
The tough economic times have also served as a catalyst for larger enterprises migrating to Enforta. Enforta’s end-to-end service management, nationwide operating footprint, and rapid installation are continually referenced amongst the reasons why some of the nation’s largest companies are switching to Enforta. Last quarter Enforta received its first major order from the Russian government covering 420 sites.
“Today Enforta is fiscally stronger than ever before, and thus it is timely and appropriate that we resume our geographic expansion in order to retain the company’s leadership position in providing wireless broadband services to Russia’s regional capital cities,” said Enforta President Lee Sparkman. Enforta plans to invest approximately $25 million during 2010 for the expansion program, with most funding coming out of the company’s own cash flow.
Enforta was formed in October, 2003 with the objective to provide broadband services using WiMAX and other advanced technologies in Russia’s regional capitals. The Company is owned by Baring Vostok Capital Partners, Sumitomo Corporation, Bessemer Venture Partners, and the European Bank for Reconstruction and Development.
Enforta has aggressively deployed its broadband services across Russia’s regional capitals and despite its short six year history the Company was included amongst the largest 30 telecom operators in the ‘CNews’ annual survey.
Enforta is amongst many who have publicly announced their intention to compete in the upcoming state sponsored contest for 2.3-2.4GHz spectrum. The ‘beauty contest’ styled process will cover spectrum in 40 of Russia’s federal regions and is the first such contest for WiMAX spectrum managed by the state regulator. While the final contest criteria have not been published, all contestants are lobbying for criteria that most favor their positions. As reported this week in the Russian press (http://net.compulenta.ru/471481/), the contest rules now award significant points to operators who own fiber in each of the federal regions, a criteria widely rumored to favor the state owned companies (Svyazinvest, TransTelecom, and Rostelecom) as well as the companies who have acquired significant fiber assets from the state operators (Synterra). The politics behind spectrum are ‘thick’ in Russia and additional changes can be anticipated before the final contest rules are announced this month.
For more information on Enforta’s current operations and planned expansion see www.enforta.com or contact email@example.com.