Fixed-line growth, driven by demand for broadband and IPTV services, will help fuel Russia's telecom services market expansion from $37.2 billion in 2008 to $48.5 billion in 2013, according to a new Pyramid Research report, "Communications Markets in Russia."

Like many economies all over the world, Russia has seen significant growth in its mobile market during the past 10 years, and added about 20 million new subscriptions during 2008 to take the total to 183.4 million.

But while many other countries are seeing fixed-line revenues fall, and even suffer disconnections of standard PSTN voice lines as users rely on their mobile phones, Russia is set to experience growing demand for fixed-line connections during the next five years, with its penetration rate set to rise from 32.9 percent at the end of 2008 to 41.2 percent by the end of 2013, according to the Pyramid team's forecast.

Broadband penetration, starting from a relatively low base, is set to ramp from just more than 5 percent in 2008 to more than 11 percent in 2013, according to the report, driven mainly by the ongoing DSL rollout by Svyazinvest , plus fiber access builds by the likes of VimpelCom Ltd. (NYSE: VIP) and TransTeleCom Co. CJSC (TTK) (TTK). (See Russian Altnet Makes FTTx Plans and Capex Watch: VimpelCom Cuts Back.)

DSL subscriptions are set to hit 8.6 million in 2013, compared with about 4.2 million at the end of 2008.

And as DSL uptake increases, so demand for IPTV services will grow, believes the Pyramid team. It forecasts that IPTV will account for more than 6 percent of the growing pay TV market in Russia by 2013 from just 2 percent in 2008. Comstar United Telesystems JSC (London: CMST), with its recently acquired Stream-TV service; Vimpelcom, with its Corbina TV service; and JSC Central Telegraph have all launched IPTV services in Russia. (See Comstar Reorganizes, Microsoft Powers VimpelCom, and Central Telegraph Deploys Netris.)

— Ray Le Maistre, International News Editor, Light Reading