Minnow Summa set to join mobile giants in LTE tender; Tele2 unhappy with terms of regional auction

8 Jun 2012

According to a series of unverified reports by the Prime Tass news agency, Russian mobile giants Mobile TeleSystems (MTS), MegaFon and Vimpelcom have submitted applications to participate in the government’s upcoming Long Term Evolution (LTE) spectrum auction. Interestingly, they have been joined by broadband operator Summa Telecom, which has enjoyed middling success as a fibre-to-the-building (FTTB) provider in recent years, after its ambitious plans to launch a nationwide WiMAX network collapsed due to regulatory complications. Vladimir Androsik, chairman of Summa Telecom, told Reuters: ‘We have always expressed interest in wireless technologies. We believe that LTE broadband services will be a natural addition to our fixed line access network’. As previously reported by TeleGeography’s CommsUpdate, the auction process is scheduled to commence on 12 July 2012, and will see LTE-suitable frequencies in the 791MHz-862MHz spectrum band go under the hammer. Roskomnadzor will offer four 2×7.5MHz blocks of frequencies covering the entire Russian territory. Paired blocks will be limited to one operator apiece, and the tender will award extra ‘points’ to bidders which agree to open their networks up to mobile virtual network operators (MVNOs). Successful operators are obliged to complete their network rollouts within a seven-year time frame, offering services in all towns with at least 50,000 residents. The deadline for applications by companies interested in participating in the auction is 14 June.

The 800MHz spectrum auction comprises just one aspect of the Russian regulator’s long-delayed, and increasingly complicated, plan to distribute 4G frequencies, with a regional auction of spectrum in the 2570MHz-2620MHz band expected to take place in mid-April 2013. Although sought-after Frequency Division LTE (FD-LTE) spectrum is expected to be granted to major mobile operators on an ad hoc basis, the government’s previously announced regional LTE tender in April next year will encompass Time Division LTE (TD-LTE), which generally allows for slower transmission speeds. Whilst conceding that his company will participate in the regional tenders, which will see the aforementioned spectrum divided into ten regional packages, Tele2 Russia CEO Dmitry Strashnov has criticised the plans, commenting: ‘It would be wrong to say that ten regional TD-LTE licences could, to any extent, replace or compensate the failure to receive [LTE frequencies] by regional operators. It is most likely to be token money, which does not match at all what the regional players will not get. I mean it is a political move, a gesture.’ Last month Swedish telecoms giant Tele2 took steps to deny Russian media reports suggesting that it plans to sell its Russian subsidiary; much to the Swede’s chagrin, Tele2 has been repeatedly denied a licence to operate in Moscow, whilst an all-important 3G concession has also been withheld from the firm, limiting future growth prospects. The frustration has recently been compounded by Tele2’s effective exclusion from the federal LTE licence distribution process, which has been clearly geared towards state-owned operator Rostelecom and Russia’s self-styled ‘Big Three’ mobile operators, MTS, MegaFon and Vimpelcom.

Russia, Sumtel (owned by Rostelecom), Tele2 Russia