Russia is faced with a shortage of SIM cards

Russian mobile operators are faced with a shortage of SIM cards, which is why they are forced to abandon the free connection of new subscribers. If earlier the Big Four operators could afford to give a SIM card to a client, hoping that potential payments would recoup the costs, now companies are forced to abandon this practice, Kommersantwrites with reference to market representatives.

VimpelCom (Beeline brand) has already announced the abandonment of the practice of free SIM cards. Svetlana Kirsanova, Executive Vice President for Retail Business, explained this decision as a deliberate move away from the “distribution” of SIM cards in favor of “sensitive sales”. She explains that the potential new subscriber base is not that big, so bulk purchases for the sake of gifting SIM cards are not needed.

“These are children who have grown up to their own phone, non-residents and subscribers who have switched from other operators, but these are not tens of millions of new users a year, but significantly less,” says the top manager, noting that against the backdrop of the war in Ukraine, the number of potential subscribers continues to decline.

A similar policy is now being promoted by MegaFon. The company has not completely abandoned free SIM cards yet, but intends to significantly reduce their number. MTS told the publication that they had not considered “extensive opportunities for increasing the client base” for a long time, Tele2 refused to comment on problems with SIM cards.

The main reason for the change in the SIM card policy is the rising cost and scarcity. For a long time, Russian companies have been heavily dependent on European suppliers, which now have either drastically reduced supplies, or the logistics of supplies have become more complicated, which has affected the price. Free connection was used by operators to lure subscribers from competitors, but now this method of increasing income is not very profitable, experts interviewed by the publication note.

Konstantin Ankilov, an analyst at TMT Consulting, argues that Russian operators have long been looking for a way to refuse free SIM cards, and price realities simply pushed them to this decision. At the same time, the total number of subscribers has not changed dramatically in recent years and remains at a stable level. In 2021, the number of SIM cards grew by only 3.3% and amounted to 259 million. Raiffeisenbank analyst Sergei Libin believes that a similar growth trend will continue in 2022. He expects the growth of the subscriber base by 2%, and estimates the economic effect of this at only 2-4% of the operators' income.

For the first time, problems with SIM cards with Russian operators became known at the end of June. Then representatives of companies from the top 4 admitted that they would have to transfer the costs of SIM cards to customers, and new subscribers would have to pay up to 50 rubles for one SIM card.

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