Enforta ramps up WiMAX expansion in Russia

Privately-held Enforta has announced it is expanding its wireless broadband presence to an additional 13 cities in Russia next month. This will extend its reach to a total of 68 cities in the country. The additional 13 cities are scheduled to go live by the end of 2008.

This year has been one of rapid expansion for Enforta. In June 2008 the company expanded its wireless broadband coverage to 22 cities, taking its coverage up to 55 cities. At the time Enforta said it would add another ten cities in 4Q 2008 but that has now been brought forward with the latest announcement, as well as three extra cities being added to the list.

 “The successful launch of [the 22 cities in June] has allowed us to accelerate our geographical development beyond the original plans,” explains Lee Sparkman, president and co-founder of Enforta. The company now operates what it claims to be the largest wireless broadband ‘footprint’ in Russia servicing cities comprising 70 percent of Russia’s urban population. “The WiMAX technology continues to perform well and we are pleased with the subscriber growth,” he adds.

Enforta’s prime focus is the SME and corporate market, providing high-speed internet (symmetrical speeds ranging from 2Mps and 6Mbps) and VPN services. It currently has 20,000 business customers.

“[We’re seeing] that the market image and acceptance of WiMAX is improving quickly, particularly amongst the enterprise sector,” says Sparkman. “Though half of Enforta’s 55 operational cities have had their ‘doors open’ for less than a year, we see that enterprise subscribers no longer view WiMAX solely as a service for geographically disenfranchised offices. Rather, Russian enterprises increasingly recognise that Enforta WiMAX service provides a high-performance solution for their most demanding mission-critical applications. Enterprises particularly appreciate that Enforta takes full responsibility for end-to-end service provisioning, including the local loop, which, traditionally, has been the ‘weakest link’ in the telecom supply chain.” 

Although Enforta targets primarily business customers, it is seeing growing demand from consumers as WiMAX price points decrease, which enables Enforta to offer more attractive tariffs. Russia is very price-sensitive market – average monthly broadband ARPU is around $20 – but Enforta has still managed to attract around 7,000 consumer customers.

The amount of investment required by Enforta to roll out WiMAX is expected to top $100m by the end of this year. “We are fully funded to achieve this,” says Sparkman, “although we will probably look for an additional investor next year.  We may well expand into the CIS during 2009.”

Enforta’s existing investors are the Sumitomo Corporation, Baring Vostok Capital Partners, the European Bank for Reconstruction and Development, and Bessemer Venture Partners.

The company’s WiMAX focus to date has been on the ‘d’ standard in the 3.5GHz and 5.2GHz frequency bands. Its primary supplier is Alvarion, which supplies WiMAX kit in both 5.2GHz and 3.5GHz; Airspan base stations and CPE equipment are used at 3.5GHz. Infinet supplies pre-WiMAX equipment at 5.2GHz.