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8 June 2021

Will Russia’s operators challenge Yandex in the smart home market?

By Wireless Watch Staff

Spurred by the news that Russian banking firm SberBank was beta testing its Visper platform for a customer-facing virtual presenter in Russia, details about the current state of voice assistants in the market has trickled out. Unsurprisingly, Yandex (the Russian Google) takes first place, but with even banks investing, it begs the question of the operators’ attitudes to the technology.

With a population of some 146m people, there are around 52m voice assistant users in Russia, according to estimates from Just AI. Based on its figures, Yandex’s Alice (Alisa) has 45m users, with Google Assistant on 11m, and Apple’s Siri on 6m.

This is perhaps testament to the advantage that native Russian developers have over those that don’t speak the language. While largely phonetic, Russian is rather complicated, filled with grammatical rules and verb wandering.

When Just AI surveyed smartphone users (note that smartphone penetration in Russia is far lower than Europe and North America), 71% said they had used a smart assistant in 2019. The next year, that figure had climbed to 77%, but the number of people reporting daily usage was much lower – 29% in 2019, and 32% in 2020.

However, Just AI’s managing director, Kirill Petrov, said that 2020 was a turning point for the technology, and that their popularity is set to surge. To that end, Yandex announced sales of 1.3m devices with Alice installed, since launch three years ago, but smartphones are still the source of the majority of voice assistant interactions.

For a bit of context, Amazon had sold over 200m Echo devices in the first six years of service, after launch in 2014, with the bulk of those appearing in the US. It now claims that hundreds of millions of Alexa-enabled devices are in use globally, but that of course includes those with native Alexa integration.

So, Russia lags on the in-home device side of things, which potentially opens the door for its operators to step forward. Local experts still point to financial services and call centers as the current main drivers, however, with fewer pointing to the telecom sector.

In terms of domestic voice assistant offerings, Mail.ru Group (which owns social network VK) also has Marusya, while SberBank has Salut. Currently, Yandex’s Alice can be found in its Station devices, as well as its smart TV operating system (launched in 2020), with Mail.ru’s Marusya housed in Capsules, and SberBank’s Salut installed in its Portal smart screen device – although technically part of the new SberDevices division, which is focusing on consumer electronics, including the Sber Box connected TV streaming device. Any home appliance is a target for SberDevices, said CTO Denis Filippov.

Sber is also launching its own app store, called SmartMarket, and another bank called Tinkoff has its Oleg assistant too – but no devices. This does beg the question of the complexity of Russian banking services, if it becomes practical to roll out a voice assistant to handle customer interactions.

MTS, an MNO that has also racked up a diverse range of pay TV operations that it is now trying to consolidate inside the Kion OTT offering, was working on a smart speaker – and had gone as far as handing out beta versions to gather customer feedback last year. However, it is now rumored that the project has been halted, earlier this year, potentially bringing an end to the wonderfully named Marvin assistant.

An MTS spokesperson, speaking to a Russian technology industry organization, said that existing data privacy standards need to be refined. MTS says it is important “to make point adjustments to the legislation on personal data so that companies have the opportunity to process pre-anonymized data, including those accumulated by the state, regulated by law. At the legislative level, simplify the procedure for converting personal data into depersonalized information and allow the use of such information. The successful development of the market of smart assistants based on AI technologies requires an increase in the amount of available high-quality data and the creation of supportive environment for its use.”

Whether this betrays some behind-the-scenes drama, suggesting MTS fell foul of a regulator or legal proceeding, remains to be seen. For now, it does look like MTS has paused development, and the above statement could provide the clue as to why.

As for the rest of the pay-TV operators, the largest is Tricolor, with around 15m subscribers to its satellite service. It is followed by Rostelecom, which has some 11m subs, split roughly evenly across IPTV and cable. Third place now belongs to MTS, with around 7m subscribers for its legacy TV footprint. Fourth goes to ER Telecom (cable), which has around 4m, while Orion has about 3m satellite subscribers. Notably, the ‘others’ section of the market is quite large, accounting for around 12m subscribers – a testament to how fragmented the infrastructure is in Russia.

As far as we can tell, none of these operators has active voice assistant plans. Tricolor has a CPE integration for Yandex’s Alice, added as an expansion of Tricolor’s smart home as a service (SHaaS) device control functionality. Rostelecom sells Mail.ru’s Capsule devices, but that seems to be it for the pay TV sector.

Moving to MNOs, MTS is the largest name in town. Second-place MegaFon doesn’t seem to have any public plans, while third-placed Tele2 Russia (in the process of being acquired by Rostelecom) does at least have an active customer service chatbot, which might evolve over time. VimpelCom’s Beeline has something similar, called Beeline Secretary, and of course, Tinkoff Bank has its MVNO Tinkoff Mobile, which is a conduit for Oleg.