Osnova Telekom goes on the offensive over LTE spectrum

12 Dec 2011

Osnova Telekom, the controversial start-up company which is partly-owned (25.1%) by Voyentelekom, a holding company controlled by the Ministry of Defence, has confirmed that it intends to actively pursue frequencies in the 790MHz-862MHz spectrum band, with a view to launching a Long Term Evolution (LTE) network. Although the operator was authorised to oversee the formation of an ‘experimental dual-purpose LTE zone’ which would comprise a primary network used to provide services on a commercial basis, and a confidential telecoms subsystem used by the government and the Ministry of Defence, in January 2011, its commercial plans stalled amid pressure from the country’s established telecoms operators. Osnova CEO Nicholas Tamodin told RusTele.com: ‘It is good to build networks in large and populous cities using [the] high-frequency range, and to cover large areas it’s better to do so in the low range’. It is believed that Osnova is still in possession of the 2.3GHz-2.4GHz frequencies it was granted for its experimental network.

According to TeleGeography’s GlobalComms Database, in 4Q10 Russian press reports leaked the story that the State Commission for Radio Frequencies (SRFC) was poised to grant a job-lot of Long Term Evolution (LTE)-suitable frequencies in the 2.3GHz-2.4GHz band to Osnova Telekom. The impromptu emergence of Osnova was a cause of consternation for Rostelecom – which had previously been awarded 39 of the 40 available concessions – and the so-called ‘Big Three’ cellcos Mobile TeleSystems (MTS), MegaFon and Vimpelcom, which duly lobbied prime minister Vladimir Putin to protest against what they saw as the non-competitive distribution of LTE frequencies. A co-signed letter sent to Putin warned that if the start-up company did decide to build a 4G network it would take much longer than if an established cellco were to do so. They estimated that creating a 4G federal communications network from scratch could cost as much as RUB216.3 billion (USD7 billion), and take up to seven years, severely undermining future investment opportunities. Communications Minister Igor Shchegolev promptly entered the fray, questioning why a public resource was being distributed behind closed doors.

Russia, Voentelecom (incl. Osnova Telecom)