Interfax: Russian Internet economy expected to grow 3-6%/yr even amid global crisis
(Interfax – MOSCOW, October 11, 2013) Russia’s Internet economy will continue to grow at a rate of 3-6% annually even if there is a global crisis, the head of the Russian Association for Electronic Communications (RAEC), Sergei Plugotarenko told reporters.
“In preparing the study Runet Economy 2012-2013, we prepared four scenarios for the Internet economy’s development: innovation, stabilization, negative and crisis. We believe that we are currently living in the stabilization scenario,” Plugotarenko said.
The innovation scenario projects annual growth of 35-40% for the Internet economy in the period to 2018. Industry experts believe such a scenario possible if there is no economic crisis and no government interference. “As was the case before 2008. But now this is unlikely,” Plugotarenko said.
The stabilization scenario projects annual growth of 15-20%, which is thought to be possible given limited government interference in the Internet and a normal economic situation. In that case, the market will begin to see consolidation, RAEC analysts believe.
The negative scenario projects annual growth of 6-10% in an environment of negative legislative pressure on the Internet sector and a poor general economic situation. In this case, telecom operators are expected to aggressively expand into the Internet market and gradually monopolize it, while Internet clients would switch to foreign companies and Russian Internet companies would move to other jurisdictions.
The crisis scenario assumes a global economic crisis, in which case there is expected to be harsh legislative regulation of the Internet sector aimed, among other things, at limiting the influence of U.S. companies, and there would also be price wars.
“Even in the worst case, the Russian Internet economy will grow, albeit modestly. However, a repeat of the situation of 2008, when the Internet economy grew by tens of percents despite the crisis, should not be expected,” Plugotarenko said.
It was reported earlier that Russia’s Internet economy grew 39% to 831.7 billion rubles in 2012, and is expected to grow by 26% in 2013.