Kremlin hints at awarding 3G in 2003, despite operator reservations

23 Apr 2003

Russia’s Telecommunications Minister Leonid Reiman has said that the country intends to award 3G licences during 2003, provided that the necessary infrastructure equipment and handsets are in place to support a launch. In an interview with local newspaper Vedomosti, Reiman said that he hoped the process would go ahead although he added that the Russian government had yet to decide on how many licences would be awarded or whether they would be issued on a regional or national basis. The minister’s statement follows an earlier announcement in January last year in which it was revealed that concessions would be awarded on the basis of tenders rather than by auction, and that a commission would be established to oversee the process. Russia is working hard to develop a next-generation platform based on the IMT-MC-450 standard, but is also keen to licence wideband code division multiple access (W-CDMA) technology.

The latest announcement from the telecoms minister has been greeted cautiously by industry watchers and operators alike. Whilst the country’s leading cellcos – MTS, Vimpelcom, MCC, MegaFon and Delta Telecom – are likely contenders for any future UMTS awards, the slow uptake of GPRS in Russia, coupled with an overriding need for them to expand their existing GSM networks, makes the likelihood of an early introduction of 3G a slim prospect at best. To date the development of the Russian mobile market has been centred for the most part on the major cities of Moscow and St Petersburg, with growth elsewhere hampered by the vast size of the country, the lack of roaming agreements between operators and the fact that operators are licensed on a regional basis. Although the picture is changing with the creation of the country’s first nationwide operator MegaFon in 2002, Russia’s mobile operators will be in no hurry to rush to roll out 3G networks. By April 2003 the country was home to around 18 million wireless users – a mobile penetration rate of less than 13% – giving ample room for future growth. MTS led the pack with 7.8 million subscribers, ahead of Vimpelcom in second place with 6.15 million and MegaFon and MCC on 3.7 million and 100,000 respectively.

CIT's Datafile of Eastern European Telecommunications