* MTS, Vimpelcom, MegaFon and Rostelecom win tender
* Beat out Tele2, TTK, Summa Telecom, as expected
* MegaFon seen in most advantageous position
* State-controlled Rostelecom to update strategy
By Maria Kiselyova and Anastasia Teterevleva
MOSCOW, July 12 Russia's telecoms regulator
Roskomnadzor has awarded licences for next-generation mobile
services as expected to state-controlled Rostelecom
and dominant mobile phone groups MTS, Vimpelcom
The licences - awarded for free - allow the operators to
provide wireless internet services using the extra fast LTE
(Long Term Evolution) technology, expected by analysts to become
the industry standard worldwide.
"The tender opens a new stage in the development of the
Russian telecoms sector. Deployment of 4G networks will provide
the population with high-speed mobile broadband and give a boost
to the innovative development of the economy," said Andrei
Dubovskov, the CEO of Russia's biggest mobile operator MTS.
Developing the technology sector has been a priority of the
Russian government as it seeks to diversify the economy away
from its dependence on energy.
The government has been particularly vocal about reducing
so-called "digital inequality" by helping poorer people in
Russia's regions get online.
LTE promises download speeds of more than double that of the
previous 3G standard and is designed for data, rather than voice
- a staple of increasingly popular smartphones.
Owning an LTE licence is seen as a driver for long-term
revenue growth for mobile phone operators that have exhausted
the market for new subscribers and are now trying to persuade
existing customers to spend more on mobile packages.
The 'Big Three' mobile groups and Rostelecom beat out Nordic
telecoms operator Tele2, TTK - a telecoms unit of
Russian Railways - and Summa Telecom, part of Summa Group.
RUNNING A RACE
All winners must start providing services no later than June
1, 2013, but Megafon is seen leading the race and may benefit
from an early move.
MegaFon, controlled by Russia's richest man Alisher Usmanov,
started to provide LTE services in Moscow in May, using the
infrastructure of state-backed 4G operator Scartel.
Its offering is already available to 10 percent of Russia's
140 million population, MegaFon said on Thursday, and it pledged
to expand the footprint to 27 percent by the end of 2012.
MegaFon is also seen benefiting from a planned combination
of Usmanov's stake in the company with 100 percent of Scartel, a
deal expected to be announced soon.
"Obviously it is MegaFon who won... and namely Mr Usmanov
who competently consolidated the assets. It is a farsighted
defence of his investments," said Eldar Murtazin at Mobile
Usmanov raised his stake in MegaFon to 50 percent plus one
share in April when billionaire Mikhail Fridman sold his stake,
resolving a long-running dispute over strategy and governance at
MegaFon and positioning it for a highly-anticiapted initial
public offering that could raise $4 billion.
MTS said it plans to build 4G networks ahead of schedule,
while preparing to launch LTE in Moscow in August-September on
previously acquired frequencies.
Vimpelcom pledged to provide LTE services in six Russian
regions by the end of 2013, but at this stage looks to be
lagging its three rivals.
"We have already commenced modernising our network and
making it LTE-compatible," said Anton Kudryashov, head of
Vimpelcom's Russian business.
BOOST FOR ROSTELECOM
The results of the auction will also help to boost the
position of state-controlled Rostelecom, the former fixed-line
monopoly, in a sector previously dominated by private players.
Rostelecom, which was transformed last year into a
multi-service provider by merging with seven regional operators,
wants to boost its share of mobile as well as broadband and
pay-TV markets to offset a fall in its core fixed-line business.
The company said on Thursday it plans to update its mobile
strategy to take into account the LTE licence as well as the
planned consolidation of Russia's No.8 wireless carrier Sky
Link, which has 2G and 3G licences in more than 70 Russian
"Rostelecom plans to create modern multistandard mobile
networks, combining advantages of 2G, 3G and 4G and allowing us
to provide voice and data services with high level of quality,"
said spokeswoman Kira Kiryukhina.
Kiryukhina added Rostelecom was ready to team up with other
operators to build shared infrastructure in order to speed up
the network rollout and reduce costs.
Rostelecom also plans to start providing LTE services on
Scartel network in September as per a similar MVNO (Mobile
Virtual Network Operator) agreement to the one MegaFon has with
Rostelecom earlier said it was targeting 22 percent of the
wireless broadband market in subscriber terms by 2015, up from
the current 9 percent.