Delayed LTE spectrum auction now slated for September after document mishap

3 May 2012

Russia’s severely delayed auction of Long Term Evolution (LTE)-suitable spectrum has reportedly been postponed until September 2012, after the people charged with preparing the tender document omitted crucial information regarding the precise compensation that the winners of the tenders will have to pay Sistema for the frequencies set to be relinquished by its subsidiaries Mobile TeleSystems (MTS) and Kosmos-TV. In March 2012 media reports suggested that Sistema was in line for compensation of up to RUB1.5 billion (USD51.02 million) for the prized frequencies in the 2.5GHz-2.7Ghz band, but the specifics are now shrouded in doubt once more. The latest delay to the tender, which had been rumoured to take place as early as this month, effectively leaves the increasingly fragmented LTE licensing process in tatters.

TeleGeography notes that MTS’ situation is unique, insofar as the cellco was awarded Moscow’s first Long Term Evolution (LTE) licence by the Federal Supervision Agency for IT, Communications & Media (Roskomnadzor) in February 2012, allowing it to use a portion of spectrum in the 2595MHz-2620MHz frequency band – the very spectrum that it has freed up for the tender – complicating the issue of compensation somewhat.

In related news, last week saw MTS indicate that it has already issued its corporate clients with LTE modems for testing purposes, despite the fact that no commercial launch date is in sight. Under the terms of its Moscow licence, MTS is required to launch its LTE network on or before 29 December 2013; the licence is valid until 29 December 2016.

Russia, Mobile TeleSystems (MTS), Sistema