Communication Equipment (Russian Market)

Main article: Production of ICT equipment in Russia

2023

The head of Er-Telecom proposed to reboot the current import substitution procedure

On October 12, 2023, President of ER-Telecom Holding Andrei Kuzyaev expressed the opinion at the demodna of the Mobile Communications and Fixed Communications industrial competence centers (ICCs) that it was necessary to "reset" the ICC. Being the chairman of the ICC "Fixed Connection," Andrei Kuzyaev notes that when the ICC were created and what they are now, these are two different things.

Read more here.

Mishustin allocated 630 million rubles for the development of open base stations 4G/5G

Prime Minister Mikhail Mishustin signed an order that allocated more than 632 million rubles for the development of mobile base stations using OpenRAN technology. The press service of the Cabinet of Ministers announced this on October 7, 2023.

The work is carried out within the framework of the roadmap "Modern and promising mobile networks" until 2030. One of its directions provides for the development of equipment for base stations of mobile 4G communications/with 5G an open architecture of OpenRAN operator class.

According to the document, the subsidy, the source of which will be the reserve fund of the government, will go to reimburse the costs associated with the formation of scientific and technical groundwork in this area.

According to CNews, by October 2023, the networks of all the largest mobile operators were based on the base stations of three foreign vendors - Finnish Nokia, Swedish Ericsson and Chinese Huawei. All of them, after February 24, 2022, decided to leave the Russian market.

Meanwhile, there is no mass production of domestic base stations in Russia by the middle of 2023 - their development lasts for years, moreover, several companies work in this direction, but none of them has launched the conveyor at full capacity, the newspaper notes. However, there are still progress in this direction - domestic base stations have nevertheless reached the networks of federal telecom operators, where they are currently working in testing mode. By October 2023, MegaFon is doing this, and very soon VimpelCom, known under the Beeline brand, will join the initiative.

For their part, operators are in no hurry to completely abandon the decisions of foreign manufacturers proven for years - according to the source Businessman"" from one of the operators, import substitution of telecom equipment for these companies is now far from a priority. The main problem is the current uncompetitive ability of domestic base stations, which are not able to completely displace European and Chinese solutions from the Russian market.^[1]

The Ministry of Industry and Trade prepared the mark system of assessment of localization by the TV set equipment

An updated system for assessing the localization of telecom equipment can be introduced from January 1, 2024. This was announced on September 21, 2023 by the press service of the State Duma deputy RFAnton Nemkin. Read more here.

More telecom towers built in Russia in six months than in the entire 2022

In the first half of 2023, more telecom towers were built in Russia than in the entire 2022. The number of commissioned facilities increased by 3.2% in relation to the entire 2022, to 98.1 thousand. In 2022, there were 95 thousand facilities in operation, which is 2% more compared to 2021 (93 thousand). The newspaper Kommersant cites such data on September 13, 2023.

According to the publication, among the antenna-mast structures (AMS) for the communication infrastructure, built in January-June 2023, the largest shares fell on the following companies:

• 33% of the Group of Companies "New Towers" (unites "Vertical," "Russian Towers," the First Tower Company);
• 24% of the Tower Infrastructure Company (BIC) MTS;
• 20% at Service-Telecom (including the Independent Tower Company);
• 18% of the structure of Tele2 "Pilar";
• about 5% of regional companies.

According to AC&M, by the end of June 2023, the total number of AMS in Russia is at least 97 thousand and has increased by at least 1.9 thousand since the beginning of the year. This compares with the expansion of the park for the whole of 2022, but is inferior to the growth rate in 2019-2020.

The consolidation process that took place on the AMS market in 2021 and 2022 gave rise not only to large players with giant shares. Its second consequence was the appearance of "dozens of small AMS owners with portfolios of 10 to 600 objects," AC&M told Kommersant.

As an example, they cited the former general director of the Russian Towers company Alexander Chub - at the end of 2022, almost a year after the change of ownership of the Russian Towers, he founded his enterprise Russian Infrastructure Company. Its main activity is the construction of antenna-mast structures to accommodate base stations of cellular operators.^[2]

The cost of developing Russian equipment for LTE and 5G networks was cut by a third to 15.5 billion rubles

In early September 2023, it became known that Government of the Russian Federation it had updated the roadmap "Modern and Promising Mobile Networks" until 2030. As they write "" Sheets with reference to this document, budgetary financing of the development of domestic equipment for networks LTE 5G for 2024-2025. are reduced by a third - from almost 24 billion (rubles in the first version of the document) to 15.5 billion rubles.

Kommersant draws attention to the fact that the document changed the structure of financing measures: costs from the federal budget slightly decreased from 52.6 billion to 51.7 billion rubles, and extrabudgetary increased from 31.4 billion to 46 billion rubles.

The roadmap notes that "the values ​ ​ of the indicators can be clarified based on the results of signing forward contracts (obligations under orders), the needs of telecom operators in each individual year, as well as based on changes in the cost of components."

According to experts interviewed by Vedomosti, we are talking about a serious reduction in budget funding for the creation of domestic telecommunications equipment. If the state does not support operators in terms of compensation for the difference between domestic equipment and imported equipment, then this may affect consumers. As a result, we should expect that operators will be forced to raise prices, experts say. Managing partner of TMT Consulting Konstantin Ankilov added that the reduction in budget financing may affect the timing of the introduction of domestic telecom equipment.

The representative of Ministry of Digital Development in a conversation with the publication did not confirm, but did not deny the reduction in the budget for development, noting only that changes to the roadmap are a planned procedure, and it is associated with new circumstances. At the same time, the department stressed that all the goals set for business in terms and volumes remain unchanged.^[3]

Project for 11 billion rubles. MTS will create base stations with open architecture

On September 1, 2023, it became known that Irteya, a subsidiary, MTS is implementing a project to create its own mobile communication base stations 4G 5G and with open OpenRAN architecture. The equipment will help eliminate the shortage of foreign solutions that has formed in the current geopolitical situation. More. here

Mishustin: Manufacturers of high-tech telecom equipment allocated 3.5 billion rubles for subsidies in 2023

On June 20, 2023, Prime Minister Mikhail Mishustin, speaking at a strategic session on the development of the communications industry until 2035, spoke about the financial support of Russian manufacturers of telecommunications equipment.

To speed up the transition to Russian LTE and 5G base stations, the Government and market participants launched the implementation of a roadmap for the development of modern networks. It includes several state support programs, including the allocation in the current [2023] year of subsidies in the amount of about 3.5 billion rubles for the manufacture of just such high-tech devices, the press service of the Cabinet of Ministers quotes Mishustin as saying.

According to the Chairman of the Government of the Russian Federation, in the context of a constant increase in traffic volume, it is necessary to accelerate the development and implementation of the most advanced domestic communication solutions.

Operator companies need to modernize networks to increase their bandwidth and data transmission speed and ensure high stability of communication channels, their protection from threats of cyber attacks and external interference, Mishustin said.

If the amount of the subsidy that the state intends to allocate to the industry concerns the construction of a new infrastructure based on 5G or LTE, then 3.5 billion rubles may be enough to equip one large region or Moscow with base stations on the network of only one operator, said Alexei Slukin, author of the Telekommunalka Telegram channel, whose opinion is quoted by the Kommersant newspaper. According to Slukin, earlier the amount of investments in large operators could reach 300 billion rubles, which allowed them to build and modernize up to 50 thousand sites per year. 3.5 billion rubles will be enough to install no more than 600 new base stations, the expert believes.^[4]

Domestic production of printed circuit boards and telecom equipment opened in St. Petersburg

On June 14, 2023 St. Petersburg , the company launched a production line for the production TV set equipment of NPO (Russian Telecommunications Technologies " a joint venture of PJSC, GC and RostelecomVanguard LLC). Kyutek This industrial cluster was created at the facilities of the Avangard enterprise within the framework of the program import substitution in the field of telecommunications and. communications RUSSIAN FEDERATION More. here

The Ministry of Digital Development of the Russian Federation offered friendly countries cooperation in the production of telecom equipment

At the end of May 2023, it became known that the Ministry of Digital Development of the Russian Federation is considering the possibility of organizing a new type of international interaction with "friendly" countries to ensure the development of communication networks and achieve technological independence.

According to Forbes, the corresponding proposal is contained in the preliminary version of the "Strategy for the Development of the Communications Industry in Russia for 2024-2035." The project received the conditional name "Technological sovereignty in a box." It is noted that in the current geopolitical situation, the Russian communications industry faced sanctions restrictions in terms of equipment and software supplies, as well as the use of foreign production facilities. Meanwhile, the dependence of the telecommunications industry in Russia on foreign components is very high, while its own production resources are limited.

On the one hand, the situation that has formed on the Russian market "contributes to the development and transition to its own technologies and software and hardware complexes." But, on the other hand, by 2025 the quality of mobile communications in Russia may significantly decrease due to a shortage of telecommunications equipment (MSW). Therefore, experts believe, measures are needed "to attract additional funding for MSW producers and the organization of international sales markets."

The authors of the initiative propose to create a set of standardized and trusted technological solutions adopted by "friendly" countries and a component of the base for them. Within the framework of the project, it is planned to jointly allocate funds for the development and production of products, as well as the organization of a single frequency distribution - primarily for satellite constellation, 5G and 6G equipment. What kind of "friendly" countries are in question is not specified. But market participants believe that without attracting China, it will be extremely difficult to realize such a large-scale task.^[5]

Russian telecom operators began to use Indian, Israeli and Turkish equipment

On February 9, 2023, it became known that Russian telecom operators began to use Indian, Israeli and Turkish equipment. Alexander Sivolobov, Deputy Head of the NTI Competence Center based on Skoltech for wireless communications and the Internet of Things, spoke about this.

According to him, such products remain a backup option for telecommunications companies and motivate Russian manufacturers to develop and produce decent solutions. Kommersant also writes about the import of new foreign stations into the Russian Federation with reference to the unified register of certificates of conformity. It follows from it that OOO OTK registered in mid-2022 and early 2023 a certificate for the supply of BS from such vendors as JRC (Japan), HTC Corporation (Taiwan), Telrad (Israel), the newspaper writes.

Some lines of telecom equipment meet the technological requirements of the Russian network, but it is necessary to resolve the issue of compatibility with existing equipment, Tele 2 said. The operator tested samples from suppliers from India, China and Turkey and noted that manufacturers have announced their readiness to refine the necessary products.

The main drawback of the equipment of manufacturers of the so-called second echelon from China, India, Israel and other countries is the need to refine it, explained Alexander Sivolobov. According to him, problems arise with the support and training of specialists, with reliability and stability of work, with adaptation to Russian operating conditions.

A number of foreign vendors of second-tier telecommunications equipment may be interested in supplying solutions to the Russian Federation in order to occupy the niche vacated by market leaders, said MForum Analytics analyst Aleksei Boyko, but "in the current situation, they are unlikely to want to advertise cooperation with Russian customers."^[6]

2022

Russian telecom operators have sharply reduced infrastructure spending

At the end of 2022, the capital investments of telecom operators in Russia in infrastructure development decreased by 23.7% compared to the previous year. This is evidenced by the official statistics of the Ministry of Digital Development, disclosed in early July 2023.

According to the Vedomosti newspaper, the investments of operators in 2022 amounted to less than 350 billion rubles. A comparable reduction in investments in infrastructure projects was only in the post-crisis 2009, when the capital expenditures of telecommunications companies decreased by 36.8% - to 148 billion rubles.

According to estimates, in 2022, operators' revenues from communication services, including fixed networks and mail, rose by 1.9% compared to 2021 - to approximately 2 trillion rubles. The revenue of companies providing cellular services increased by 1.8% - to 462.6 billion rubles. Internet traffic climbed 17.7% year-on-year, reaching 126.7 Ebait.

It is noted that the reduction in spending of Russian operators on infrastructure is explained by several reasons. In particular, this is an increase in the exchange rate of foreign currencies and refinancing rates in the current geopolitical situation and in the context of macroeconomic challenges. In addition, foreign suppliers refuse to ship equipment even under previously concluded contracts.

Capital expenditures VimpelCom"" (brand "beeline") in 2022 amounted to 59.3 billion rubles: this is 20.9% less than in the previous year. At the same time, expenses MTS remained approximately at the same level - 111.2 billion rubles in 2022 against 111 billion rubles in 2021. In companies, "" and MegaFon Tele2 the indicators are not disclosed.

Market participants say that for mobile networks in the Russian Federation there is no full supply of equipment from any of the leading developers. Therefore, Russian companies are striving to make the most of existing equipment purchased for future use.^[7]

Market growth by 1.7% to 2 trillion rubles

The volume of the Russian telecommunications equipment market in 2022 increased by 1.7% compared to 2021 and amounted to almost 2 trillion rubles. Such data analysts NeoAnalytics released on June 8, 2023.

According to experts, in 2018-2021. in the Russian Federation there was a surge in sales of equipment for telecom operators, and in 2022 the dynamics slowed down. In almost all main segments, negative dynamics was observed associated with the cessation of the import of imported equipment from the United States and Europe, the researchers point out.

Against the background of the departure of foreign manufacturers of telecom equipment in Russia, import substitution processes in this area have intensified. It is expected that in 2023-2026. the market will begin to recover due to the development of parallel imports and the entry into the market of new producers (domestic and foreign).

According to NeoAnalytics forecasts, in 2026 the Russian telecommunications equipment market will increase in volume and amount to 1.99 trillion rubles. The average annual increase will be 2-3%. In general, growth dynamics are expected to slow down. Despite the fact that the figure will reach a maximum by 2026 in retrospect of the last 10 years, according to a study published in June 2023.^[8]

Installation of new base stations in Russia decreased by 60%

The installation of new base stations in Russia in 2022 decreased by 60% compared to 2021 - to 82 thousand units. The decline was largely due to a shortage of equipment from Nokia, Ericsson and Huawei.

The fact that telecom operators have significantly reduced the installation of new base stations, writes Kommersant with reference to analysts. An analyst at MForum Analytics Aleksei Boyko confirmed the market decline to the newspaper and estimated the decline at more than 50%. Deputy Head of the NTI Competence Center on the basis of "" Skoltech for wireless communication technologies internet of things and Alexander Sivolobov told the newspaper that in 2022 only about 25-30 thousand base stations were put into operation.

According to Aleksei Boyko, by the beginning of 2023, the equipment of manufacturers who left Russia still accounts for 90% of the fleet of installed base stations in the Russian Federation.

Market experts interviewed by the newspaper agreed that the operators were able to purchase large volumes of foreign equipment before the start of the special operation in Ukraine. However, they use it only if the failed base stations are replaced. At the same time, the main telecom operators said they had sufficient reserves to preserve and improve the quality of services. In addition, there are other tools for developing the network.

The representative of Tele2 told the publication that by the beginning of February 2023, the company has stocks of equipment that will preserve and improve the quality of services. MegaFon noted that the operator has other tools for developing the network, in addition to the construction of base stations. The company refarmes frequencies and improves technical characteristics with effective control.

We work with telecom operators to prevent the deterioration of communications. Operators will gradually switch to Russian equipment, the Ministry of Digital Development told the newspaper.[9]

Ministry of Digital Development: Cellular operators in Russia should stop using foreign base stations from 2028

On December 23, 2022, the Ministry of Digital Development of the Russian Federation announced that in 6 years, Russian cellular operators will have to completely abandon the use of foreign telecommunications equipment. The corresponding decision was made following a meeting of the State Commission on Radio Frequencies (SCRF).

Contracts of telecom operators with Russian equipment manufacturers - this point has already been fulfilled by all operators of the Big Four. They submitted signed forward contracts to the commission. The deliveries themselves will begin in 2025, and from 2028 it will be possible to use only Russian base stations, the Ministry of Digital Development said in a statement on December 23, 2022.

Earlier in December 2022, the Vedomosti newspaper, citing sources, wrote that for cellular operators who have not signed forward contracts for the purchase of Russian base stations, a ban on the use of foreign equipment could start working as early as 2023.

The publication said that operators are proposed to be divided into two groups: those that should use only domestic equipment in the construction of LTE networks from 2028, and those that will have to do the same from 2023. It is planned to attribute to the first group those operators who will conclude forward contracts for the production of domestic base stations by the end of 2022, to the second - those who will not sign such contracts, an interlocutor close to the State Committee for Radio Broadcasting explained to the newspaper.

A source in one of the manufacturers of telecom equipment told the publication that by December 2022, the postponement of the ban on the use of foreign equipment is being discussed not only until 2028, but also until 2030. At the same time, we are talking not only about a ban on the purchase of new stations, but also about refarming and the transfer of previously purchased foreign-made base stations, the source said.^[10]

Russia has created a roadmap for the development of telecom equipment for 84 billion rubles

On November 17, 2022, it became known about the creation in Russia of a roadmap for the development of telecom equipment. Its authors - Rostec and Rostelecom and ICS Holding - estimate investments in this project at 84 billion rubles. It is assumed that most of the funds (52 billion rubles) will be allocated from the state budget.

Kommersant received at its disposal a copy of the passport of the roadmap "Modern and Promising Mobile Networks" for the period until 2030. The document was prepared in pursuance of the order of the First Deputy Prime Minister of the Russian Federation Andrei Belousov to finalize the roadmap "Fifth Generation Mobile Communication Networks," approved by the government in November 2020.

The document highlights five key product lines that need to be released before 2030: these are base stations for 2G, 4G and 5G standards based on domestic components, as well as prototypes of 5G Advanced, 6G equipment and software for them. For each product, its description and consumer characteristics, application and planned readiness values ​ ​ in the future until 2030 are given.

The development of 3G equipment and technologies is not mentioned in the project passport. According to a source familiar with Kommersant the situation, this is due to the fact that there is "no noticeable demand" for this technology and its development "does not fit into the technological vector."

The Roadmap was significantly rethought after the outbreak of hostilities in Ukraine and the subsequent sanctions, a source familiar with the development of the document told the newspaper.

Until 2022, we were not in technological isolation and had access to 5G technologies. Now, even taking into account the sanctions, the government does not abandon the idea of ​ ​ developing its own fifth generation communications equipment, but the path will already be different, he added.[11]

The Ministry of Digital Development has developed a new mechanism for supporting Russian manufacturers of telecom equipment - subsidizing the rate on loans for the purchase of components

In November 2022, the Ministry of Digital Development developed a new mechanism to support Russian manufacturers of telecom equipment, printers and modems through subsidizing the rate on loans for the purchase of an electronic component base, primarily foreign.

A similar mechanism, but for computer vendors, was launched in the spring. It allowed them to stabilize supply channels and create inventory of components. Experts consider the mechanism timely, but emphasize that it will not speed up the development of Russian components.

The government will support manufacturers of Russian 4G and 5G base stations

In early October 2022, it became known about the decision of the Government of the Russian Federation to support manufacturers of Russian base stations for 4G- and 5G networks.

{{quote 'As for 5G and 4G, we have introduced a restriction on the use of new foreign base stations since 2023, now a lot of work is underway with telecom operators. Operators sign forward contracts with Russian base station manufacturers. We plan to complete this process by December [2022] - said Ministry of Digital Development of the Russian Federation Maksut Shadayev the head during a meeting of the State Duma Committee on Information Policy. }}

According to him, under these contracts, the Ministry of Digital Development will provide targeted financial support to manufacturers. Shadayev also explained that Russian base stations will be used initially in small settlements.

Rostelecom President Mikhail Oseevsky, in turn, said that the first batches of Russian base stations are planned to be received in 2022.

According to Kommersant, at the end of September 2022, at one of the conferences, Senior Vice President for Technical Infrastructure of Rostelecom Alexei Sapunov said that the operator plans to sign five-year forward agreements for the supply of base stations with Bulat manufacturers (owned by Rostelecom and Rostec) and Yadro (part of ICS Holding). In 2023, according to him, deliveries from Bulat are planned, and in 2025 - from Yadro. Rostec confirmed to the publication that Spektr is preparing for serial production of base stations.

At the same time, according to one of the newspaper's sources, telecom operators are not ready to advance the production of domestic base stations by early October 2022. Within the framework of the discussed contracts, we are talking exclusively about obligations to buy out a certain amount of base stations that will be supplied to remote regions, small settlements for which there is not enough foreign equipment, he said.^[12]

The Ministry of Digital Development will introduce the mark system of assessment of localization by the TV set equipment

At the end of September 2022, it became known about the plans of the Ministry of Digital Development of the Russian Federation to introduce a ballroom system for assessing the localization of telecommunications equipment in order to include its unified register of radioelectronic products. Read more here.

In Russia, launched the production of civilian tropospheric communication stations

At the Krasnoyarsk scientific and production enterprise Radio Communications of the Roselectronics holding (part of Rostec), the production of Groza tropospheric communication stations with a high-speed digital modem based on neural networks was launched. This was announced on September 30, 2022 to TAdviser by representatives of the Rostec State Corporation. Read more here.

Russia has developed a complex for providing communication between remote regions, which does not need electricity

Russia In developed a complex for providing communication of remote regions, which does not need electricity. This was announced, Radio Research Institute (NIIR) which created a new technology. More. here

Sharing of base stations by operators in small communities

On September 7, 2022, the Ministry of Digital Development announced the development of a bill on the sharing of base stations by telecom operators. It provides that in small settlements (including along highways) and in territories with a low concentration of the population, the dominant operator will provide communication to subscribers of other operators. The corresponding document was supported by the Government and submitted to the State Duma.

In the territories of sparsely populated areas, it is not economically feasible for all operators to install their base stations due to low payback. Bill:

• will allow operators to use the existing equipment fleet more efficiently;
• improve the quality of communication and mobile Internet in small towns;
• will help operators save their resources;
• will not incur additional costs for users;
• improve the quality of service delivery and help develop communication infrastructure.

Selection criteria:

• the telecom operator is the only one in the territory of the settlement;
• mobile communication signal coverage is available in at least 2/3 of the territory.

It is planned to adopt by-laws by the end of 2022, and implement in 2023. At the beginning of September 2022, options for implementing the mechanism for sharing base stations are being worked out.

Earlier in Russia, tests were carried out on the joint use of infrastructure and radio frequencies simultaneously by four operators in Barnaul, Vologda, Chelyabinsk and Volgograd.

Before the law comes into force, a number of points identified during the pilots have to be resolved:

• Software upgrades
• Software License Update
• formation of uniform approaches to network addressing, since each operator developed its own communication networks independently;
• operation of system 112 (will require additional effort when used together).

Telecom operators demanded to remove equipment from schools and universities

As it became known on June 21, 2022, telecom operators in Russia faced demands to remove telecommunications equipment from the territories of educational institutions. The latter refer to the approved Rospotrebnadzor rules, according to which it is forbidden to install base stations in educational institutions.

Cell towers require dismantling from the territory of colleges and universities, contrary to the explanations of Rospotrebnadzor, which argued that the norm applies only to schools. The problem arose "in many regions," including in the Chelyabinsk and Irkutsk regions, Primorsky Territory and St. Petersburg, Izvestia writes.

As the representative of Tele2Daria Kolesnikova said, the ban is not justified, since the communication infrastructure does not pose a threat to the life and health of citizens. According to her, dismantling one base station costs 2 million rubles. Therefore, their complete withdrawal from educational institutions will cost operators several billion rubles.

MTS told the publication that they are faced with requirements to remove equipment in many regions, for example, in the Primorsky Territory on the territory of the Far Eastern Federal District, where during the Far Eastern Economic Forum operators require high-quality mobile communications.

The ban on the placement of base stations within the territories of schools ultimately leads to an increase in the electromagnetic impact on students, said Vadim Poskakukhin, project manager at Spectrum Management.

The main source of radiation in the premises is the mobile devices themselves, which are forced to work with increased power in the absence of base stations nearby. Moreover, in general, the regulation of electromagnetic exposure in Russia contradicts international research, which showed the absence of health effects from base stations at much higher permitted levels, he said in a conversation with the newspaper.[13]

Uniform rules for placing telecom equipment at state facilities in Russia have been developed

On April 22, 2022, it became known about the uniform rules developed in Russia for the access of telecom operators to state and municipal infrastructure (buildings, structures, roofs and supports), suitable for the placement of communication networks, with the obligation to provide such access. The Ministry of Digital Development notes that the absence of such rules affects the provision of communication services and increases the timing of the conclusion and execution of contracts.

The department added that they have developed amendments to the law "On Communications," according to which state bodies will assist operators when deploying communication infrastructure at their facilities and independently determine the rules for interacting with operators when deploying infrastructure.

The document itself, which refers to the uniform rules for the placement of telecommunication equipment at state facilities, was sent to the ministries by the apparatus of First Deputy Prime Minister Andrei Belousov. Rostelecom and the Russian Union of Industrialists and Entrepreneurs (RSPP) participated in the development of the initiative, Kommersant writes.

According to the publication in MTS, by April 2022, in some regions, telecom operators are still faced with opaque placement procedures and pricing, as well as red tape during paperwork. The company believes that in order to solve the problem, it is necessary to adopt the experience of a number of subjects, including Moscow, where a list of objects for priority placement of equipment has been approved and uniform rental rates have been introduced.

Rostelecom believes that the initiative will help ensure the development of networks, which constantly requires an increase in equipment placement sites. It is important that the decision on the use of state facilities does not interfere with the decisions of other authorities, added to. Tele2^[14]

The government has banned the export of imported telecom equipment

The Russian government has determined a list of goods and equipment previously imported into Russia from abroad that are temporarily prohibited from being exported from the country. Among other things, the list includes computers, monitors, projectors, semiconductors, hard drives, solid state drives (SSDs) and microprocessors, as well as telecommunications equipment. This was announced on March 10, 2022 by the press service of the Cabinet. Read more here.

Rostec presented Mikhail Mishustin with a domestic 5G base station

The head of Rostec, Sergei Chemezov, presented to Russian Prime Minister Mikhail Mishustin the development of the State Corporation for 4G and 5G communication networks. According to TAdviser on January 20, 2022 in Rostec, the presentation was held as part of a working visit of the head of the Government of the Russian Federation to the Voronezh concern Sozvezdiye of the Roselektronika holding. Read more here.

2021

Over the year, cellular operators launched about 82 thousand base stations

On July 25, 2022, the TelecomDaily information and analytical agency published an analytical report with the results of counting the total number of base stations (BS) in all cellular communication standards of the Big Four (MTS, MegaFon, VimpelCom, Tele2) over the past few years. Most of them demonstrated high rates of BS commissioning in 2020, but in 2021 two out of four operators, nevertheless, continued to expand networks at a high speed.

As the study showed, 2019-2021 remained a period of active construction, although the coronavirus pandemic that erupted in 2020-2021 made its own adjustments and slowed down the market. If at the end of 2020 the operators connected 94 thousand new stations, then at the end of 2021 their number did not exceed 82 thousand. Thus, in the number of base stations, the market in 2020 grew by 14%, to 728 thousand. BS, for 2021 - by 11%, up to 810 thousand.

In 2020, Beeline increased the number of stations by 3 thousand (+ 2%), in 2021 - by 13 thousand (+ 8%), that is, this network showed positive dynamics year on year. MegaFon commissioned 12 thousand stations a year earlier (+ 6.5%), at the end of 2021 - another 10.3 thousand (+ 5%). For two years, MTS launched significantly more BS - 37 thousand in 2020 (+ 23%) and 27.4 thousand in 2021 (+ 14%). However, the highest commissioning rates were recorded at Tele2 - 39.1 thousand in 2020 (+ 29%) and 31 thousand in (+ 17.7%) in 2021. In two years, Tele2 has increased the number of BS by almost 50%.

In 2022, the construction of new BSs will significantly slow down due to external (sanctions) and internal (economic) reasons, and this will happen against the backdrop of an increasing load on the networks. The slowdown in the growth of data traffic in the first quarter of 2022 has already been reported by the Unified Interdepartmental Information and Statistical System (UIISS) of Rosstat - up to 3% (against 5-10% in previous reporting periods).

Operators faced a limitation in network capacity at the end of 2021, when the average speed of mobile Internet in Russia began to decline slightly, but decline. This problem can be solved both at the network level - by compacting them with new BSs or switching to the next cellular standard (5G), and at the level of traffic consumption - in 2021, cellular companies actually abandoned Internet unlimited tariffs. The suspension of the construction of networks in order to reduce the burden on operators is allowed by order of the Ministry of Digital Development at the end of March 2022 (a moratorium is introduced on those obligations that companies had to fulfill to cover LTE networks of federal highways and settlements with more than a thousand people).

Under these conditions, it is extremely important for operators to effectively manage existing capacities. Therefore, now it is worth exploring such a factor as the level of safety margin, says Denis Kuskov, CEO of TelecomDaily. The more BS companies launched over the last period of time (in 2019-2022), the higher this indicator. A high proportion of new BSs allows less effort to modernize the network as a whole. In addition, the new stations have a longer life and support various add-ons for capacity expansion.

From the standpoint of safety margin, MTS has a favorable situation for today (it also has a maximum number of stations - 223 thousand), but Tele2, which has launched the maximum number of stations over the past two years, has an even higher strength level. For two years, the operator introduced more than 70 thousand. BS and came out on the second place in their number (206 thousand). MegaFon has almost the same number of stations - 204 thousand, but they were updated more slowly, since the peak of construction fell on the previous period. Beeline has 177 thousand. BS and marked acceleration in input rates in 2021.

Chernyshenko: Mass production of 4G base stations in Russia will begin by 2023

At the end of December 2021, Deputy Prime Minister Dmitry Chernyshenko announced the timing of the start of serial production of Russian base stations for LTE networks.

According to preliminary estimates, if demand is provided, we will be able to enter mass production of domestic 4G base stations by 2023, "he told RIA Novosti.

The Deputy Prime Minister noted that the main claims of operators to domestic equipment are its high cost compared to foreign counterparts, and until there is serial production and market demand, the price will not become competitive.

According to Chernyshenko, by the end of 2021, a number of Russian companies have developed and are testing prototypes of domestic equipment for the stack of LTE mobile networks. Some of them were put into trial operation in the Crimea. By the end of 2022, they will be ready to accept orders for the supply of LTE equipment for projects to cover settlements of up to 25 thousand people, the Deputy Prime Minister said.

In December 2021, Kommersant, citing its sources, wrote that Ericsson is preparing for the process of localizing the production of 5G base stations in the Russian Federation. According to the publication, the Swedish company is considering options for partnership or creating its own site for the production of equipment. Thus, the partner can become a company-manufacturer of microelectronics GS Group. By the end of 2021, Ericsson was auditing its production zone in the Kaliningrad region, a government source told the newspaper.

The head of the Ministry of Digital Science Maksut Shadayev said earlier in 2021 that an agreement had been reached with two manufacturers on localization in the Russian Federation, the transfer of rights to Russian partners for the production of modern LTE base stations. The minister did not specify the names of foreign vendors ready for localization. Among possible Russian partners, he called Rostec, USM and AFK Sistema^[15]

Ministry of Digital Development approved a new procedure for registering communication equipment

On October 28, 2021, the Ministry of Digital Development of the Russian Federation announced the approval of a new procedure for registering electronic communications (RES). One of the innovations is that from March 1, 2021, when extending the permission to use frequencies, the register record of registered equipment will be automatically extended.

According to the director of the Department of State Regulation of the Telecommunications Market, by the Ministry of Digital Development Russia Dmitry Tura end of October 2021, mobile operators and other civil copyright holders using the radio frequency spectrum extend the permits of Roskomnadzor to use frequencies, and then again apply Roskomnadzor for a certificate of registration of RES. After the authorization expires, you must go through these two procedures again. From the beginning of March 2022, it will be enough for the user to make a corresponding note in the application for the extension of the permit, and the RES registration certificate will be automatically extended for the same period, he explained.

The Ministry of Digital Development noted that the new initiative is included in the action plan for the implementation of measures to stimulate investment activity of operators for the development of communication networks based on advanced technologies, which was approved by Deputy Prime Minister Dmitry Chernyshenko.

The government has determined the rules for the interaction of operators with regulatory authorities. The new mechanism minimizes bureaucratic procedures and allows businesses to concentrate on the quality of projects being implemented, - said Dmitry Chernyshenko, commenting on the introduction of a new procedure for registering RES.

He recalled that in July 2021, the Presidium of the Government Commission on Digital Development approved measures to stimulate the investment activity of operators. By the beginning of 2023, Ministry of Digital Development, together with other departments, should implement 11 events that will provide the market with favorable conditions for participation in the development of information infrastructure, added the Deputy Prime Minister of the Russian Federation.^[16]

Rostec creates a national manufacturer of solutions for mobile communications

Rostec State Corporation on August 20, 2021 informed TAdviser about the formation of a national vendor of telecommunications solutions for 4G, 5G and the next generations of communication. The specially created company was called "Spectrum" and will implement the roadmap for the development of 5G and will provide mass production. Read more here.

The government supports the transition of operators to Russian LTE equipment

On June 23, 2021, Russian Deputy Prime Minister Dmitry Chernyshenko told a journalist that the government supports the transition of telecommunications operators to Russian equipment for LTE communications. We are talking about the initiative proposed by the Ministry of Digital Development, Communications and Mass Media of the Russian Federation, which involves the allocation or extension of LTE licenses only if domestic devices are used in the operation of such networks.

This [2021] year ends the 10-year license for LTE frequencies from our telecom operators. Now Ministry of Digital Development is negotiating with them that one of the conditions for the extension of licenses will be the transition to Russian equipment - at least for 4G technology. We support this decision in the government, - said Chernyshenko.

According to him, it is necessary that manufacturers can scale the production of equipment under procurement guarantees, "which will be provided by the telecom operators themselves, who will apply for the extension of licenses."

Dmitry Chernyshenko explained the need to introduce Russian telecommunications equipment by the fact that there may be "hidden opportunities" in foreign products. The Deputy Prime Minister noted that by June 2021, LTE equipment is operated in Russia only from foreign manufacturers.

In early June 2021, the head of the Ministry of Digital Development Maksut Shadayev said that the ministry is considering the possibility of introducing restrictions in the fall, under which operators will be able to install LTE base stations only of Russian production. The press service of the Ministry of Digital Development then explained that it is planned to gradually introduce the use of Russian equipment of the LTE and LTE-Advanced standards. At the same time, the compatibility of Russian equipment and the one that is used in the provision of communication services should be ensured, the Ministry of Digital Development said.^[17]

Russian telecom operators ask for a tax deduction on infrastructure investments

In mid-June 2021, it became known about the proposal of Russian telecom operators to introduce a tax deduction for investments in networks. It is assumed that such a measure will help telecommunications companies save billions in the development of 5G technology.

The fact that operators are asking to extend the investment tax deduction to their digital infrastructure, including new communication networks and data centers, writes RBC with reference to the new version of the "roadmap" for stimulating investment activity for the development of communication networks, which was discussed at a meeting of operators with the Ministry of Digital Development on June 15, 2021. The authenticity of the document was confirmed to the publication by two participants in the meeting.

The initiator was an operator who is not part of the Big Four, Er-Telecom Holding. In his opinion, such a measure should "spur the development of networks, data centers and digital infrastructure."

Benefits are proposed to be introduced for all communication networks, regardless of the type of equipment. According to the interlocutor of the publication, the measure will make it possible to rebuild 10-15% more infrastructure, without increasing the expected costs.

The representative of the Ministry of Digital Development told RBC that the department is in dialogue with operators on all these initiatives and is interested in developing solutions. According to the representative of the department, it is planned to soon submit the finalized document to the presidium of the government commission on digital development.

Director of Tax Services for Communications Enterprises information technology MEDIA PwC Russia , and in Vasily Golovanov believes that an investment tax deduction for infrastructure will allow co-financing the costs of its construction from the outside, and states the regions, providing such a deduction, will be able to actively fight for the placement of networks.

Prior to that, the regions could attract investments in digital infrastructure mainly only through a decrease within the permissible limits of the regional part of the income tax, he said.[18]5G[19]

Shortage of telecom equipment due to problems with cargo containers

In mid-April 2021, it became known about the emergence in Russia of an acute shortage of telecommunications equipment due to problems with cargo containers.

As Oleg Grishchenko, president of the Rostelecet association (unites 195 telecom operators), told Kommersant, small regional providers have faced difficulties in supplying operator devices from China. The problem affected specific manufacturers and models, including routers, switches and fiber optic cables.

The shortage of cargo containers by April 2021 has been going on for several months. China's trade imbalance with the United States and Europe has worsened further, and empty containers have piled up in North America. This is fraught with a shortage of goods from China, for example, electronics, as well as rising prices and increased delivery times.

According to the source of the publication in one of the distributors of electronics and telecom equipment, the shortage of semiconductors also affects the timing of its supplies. If earlier the guaranteed delivery time for running lines of equipment was 6-8 weeks, now it is 16-18 weeks, he said.

Mobile Research Group analyst Eldar Murtazin confirms that "entire categories of telecom goods" have disappeared from the market. Large operators work directly with manufacturers and receive equipment under large contracts. But small providers buy hardware on the free market through distributors, so the deficit affects them first of all, Murtazin added. In his opinion, the problematic situation will remain until the end of 2021.

MTS concludes long-term contracts with vendors for the supply of telecom equipment with fixed prices, so at the moment the change in the operator's conjuncture does not affect, the operator's press service told the publication.^[20]

The Ministry of Industry and Trade intends to increase the share of Russian telecom equipment to 44%

At the end of March 2021, it became known about a new import substitution plan in the telecommunications industry, which was developed by the Ministry of Industry and Trade of the Russian Federation. Read more here.

Moscow DIT intends to increase the level of electromagnetic radiation of base stations

The Department of Information Technology (DIT) of Moscow has published the results of a study of the safety of mobile communications of all standards, including 5G, which was conducted by scientists from the Research Institute of Occupational Medicine (NIIMT) named after Mizmetov.

As a result of measurements and biomedical research, we came to the conclusion that it is possible to change the maximum permissible level of electromagnetic radiation. The study showed that the level of the electromagnetic field (EMF) will still remain at a safe level, - the words of Sergei Perov, Doctor of Biological Sciences, Head of the Laboratory of Electromagnetic Fields of the Research Institute of Electromagnetic Fields named after Mizmetov, are quoted in the message.

According to him, the measurements carried out showed that the electromagnetic field created from the operation of existing base stations is often approaching the standards adopted in Russia.

Pervov also noted that the maximum possible level of radiation from base stations can be increased. Scientists noted that Russia has one of the most stringent sanitary radiation requirements in the world - almost 100 times tougher than in many European countries.

The press service of DIT Moscow said that the study showed the existence of the possibility of increasing the maximum permissible level of electromagnetic radiation of base stations. Sergey Perov says that the revision of standards will contribute to the early development of new generation communication networks and the emergence of high-speed services for residents of cities and businesses.

The city is interested in the further development of communication infrastructure, while we want to be sure that 5G is safe for residents of the capital. The study was approved by the Ministry of Digital Science of Russia, the Ministry of Health of Russia and the working group of the Digital Economy program. It is being carried out with the active participation of the expert community, "said Alexander Gorbatko, deputy head of the Moscow DIT.[21]

Russian telecom operators will switch to open equipment by 80%

In mid-January 2021, the forecast of Deloitte analysts was announced, according to which within 10 years the share of Open Radio Access Network (OpenRAN) equipment in the networks of Russian telecom operators could reach 80%. Experts estimate the volume of this market at tens of billions of rubles.

According to Kommersant, by the beginning of 2021, a closed model of work prevails on the market, when vendors supply operators with ready-made solutions, so equipment from one supplier is used at each site. As a result, the largest players in the market were Huawei, Ericsson, Nokia, ZTE and Samsung, which supply more than 95% of the required devices.

Equipment based on OpenRAN, in turn, invites operators to independently form a network of typical elements. Deloitte believes that the use of such devices will be stimulated by the Russian authorities as part of a program to develop 5G networks based on domestic equipment.

Some operators interviewed by the publication called Deloitte's forecasts overestimated, but representatives of other companies have already begun to work in this area. MTS is confident that the use of an open interface will speed up the introduction of 5G and reduce the cost of creating infrastructure.

According to Tigran Poghosyan, Vice President of ZTE in Russia, there are no economic reasons for the transfer of operators to OpenRAN in the horizon of 15-20 years.

For 20-30 years, operators have already invested $40-60 billion in equipment purchases, and the costs incurred need to be depreciated and recouped, he explains.

Working with OpenRAN equipment is technologically more difficult, for this operators will need professional personnel, says Ivan Pokrovsky, executive director of the Association of Russian Developers and Electronics Manufacturers. In this regard, in his opinion, while operators are much more convenient and cheaper to work with ready-made solutions of foreign vendors with whom they have already developed relations.^[22]

Cellular operators invested 23 billion rubles in infrastructure in Moscow

Cellular operators in 2020 invested 23 billion rubles in the development of their infrastructure in Moscow, which is a third more than the volume of investments of the previous year. Such data are provided by the metropolitan Department of Information Technologies (DIT). Read more here.

2020

Russian telecom equipment accounted for 7% of the Russian market

The expenses of Russian companies (mainly telecom operators) and government agencies on telecommunications equipment in 2020 reached 1.15 trillion rubles, an increase of 21.1% compared to 2019. This was reported in the research company NeoAnalytics.

According to analysts, the growth in sales of telecom equipment was observed in all segments, despite the crisis phenomena associated with the consequences of the COVID-19 coronavirus pandemic.

Approximately 7% of the Russian telecommunications equipment market at the end of 2020 fell on domestic products. The study notes that the Russian market is import-dependent - about 93% of products are supplied by foreign companies. Even information and communication systems assembled on the territory of the Russian Federation (including those that ensure information security) are almost entirely created on a foreign electronic component base, experts say.

The number of Russian companies producing "know-how" in the field of telecommunications is about 100-150 units. Among the products offered are hubs, switches and routers, multiplexers, optical modems, xDSL equipment, security devices for subscriber and office equipment, VoIP equipment, media converters, interface converters, instrumentation, control systems, multiplexers, etc.

According to analysts, Russian manufacturers are best represented in the segments IP- commutators, routers gateways and some others. At the same time 5G SDN virtualizations NFV , domestic companies practically do not produce solutions for building fifth-generation networks (), technologies for building software-defined networks () and network functions ().

It is expected that in the period 2021-2023. The share of foreign manufacturers will decrease due to the insecurity of the use of foreign developments in conditions of political tension. By 2025, Russian telecommunications equipment manufacturers are tasked with taking 30% of the market. The Ministry of Industry and Trade plans to allocate 42.8 billion rubles to support the production of telecommunications equipment. It is planned to allocate 40.5 billion rubles to support the production of computer equipment (computers, servers, mobile devices and processors).

It is noted that until 2020, the market for network and telecommunications equipment in Russia developed quite smoothly and predictably. 2020 significantly accelerated the development of the industry, while the degree of uncertainty increased, the delivery time increased, and the component layout increased in price. Many participants raised prices for products and services.

During the COVID-19 coronavirus pandemic, almost all companies transferred employees to remote work, respectively, they needed to upgrade communication channels, went up the purchase of PCs, monitors, laptops, network equipment, information security solutions, video conferencing systems, headsets, etc. Therefore, in general, the IT industry felt good for a short period of time and even benefited from the restrictions associated with the pandemic. A factor that had a negative impact on the revenue and profit of companies was a significant increase in prices for the transportation of goods. For example, the cost of delivering containers from Asia has more than tripled. In general, experts conclude that the market for network equipment has grown, while the business has become less predictable.^[23]

VSAT stations market growth by 9% to 137.1 thousand

According to a study by ComNews Research, the volume of the Russian VSAT market in physical terms in 2020 increased by 9%, the total number of VSAT stations of 21 surveyed operators amounted to 137.1 thousand compared to 125.6 thousand a year earlier. ComNews reported this on February 11, 2021.

The leaders in the number of VSAT stations are RTCOM JSC - 30 thousand, AltegroSky group of companies (Astra Internet LLC, Race Telecom CJSC, Settelecom CJSC, Moscow Teleport CJSC) - 25.8 thousand, Iskra CB JSC - 21.8 thousand, which account for more than half of the VSAT stations served.

The largest increase in 2020 was demonstrated by Konnect, Russia (Evtelsat Networks LLC) (+ 64%), Gazprom Space Systems (+ 43%), RTCOM (+ 10%), Paduga Internet (+ 9 %), StarBlazer (+ 8%). At the end of 2020, 59% of the market growth was accounted for by the sales of the satellite operator Konnect, Russia, which increased the number of stations served by 6.8 thousand with a total market growth of 11.5 thousand stations.

Despite the lockdown and the associated difficulties with servicing subscribers in the regions, the majority of the surveyed operators increased or remained at the same level the number of VSAT stations served, which was due to an increase in demand for VSAT services in the mass segment due to the need to organize remote work. The number of satellite broadband access subscribers in the mass segment increased by 14% compared to 2019.

During 2020, industry experts were very cautious, sometimes even pessimistic, in forecasts regarding the situation in the VSAT market. Nevertheless, contrary to the objective difficulties during the pandemic that operators faced, the VSAT market grew in 2020, showing a good result. This became possible thanks to the stubborn, well-coordinated and at the same time painstaking work of colleagues, - said Mikhail Glinka, director of the sales department of operator and corporate solutions at FSUE Cosmic Communications (GP CS)[24]

The growth in the number of cellular towers in Russia has remained despite COVID-19

In 2020, about 6.4 thousand units of towers, masts and pillars, used as mobile infrastructure, were erected in Russia. More than half of this number (3.7 thousand) fell on the designs of cellular operators. The remaining share belongs to independent tower companies: Russian Towers, Vertical and Service-Telecom. This is evidenced by data from analysts at AC&M Consulting.

According to them, the pace of expansion of the fleet of high-rise structures remains at the level of 6-7% per year, despite the COVID-19 coronavirus pandemic, which led to an economic downturn in Russia and other countries.

The study says that the market for paid services for the rental of seats on towers, masts and pillars in 2020 in Russia amounted to approximately 6 billion rubles a year (not counting barter). At the same time, the average rental rate remains practically unchanged, and all growth is achieved due to the commissioning of new facilities while maintaining the average tenancy ratio in the portfolio (the ratio of the number of tenants to the total infrastructure volume).

One of the positive factors for the market in 2020 was that VimpelCom embarked on decisive measures to overcome the lag in coverage and began a large-scale construction program in the Moscow license zone.

Alexander Grigoriev, Vice President for Regional Development of the VimpelCom PJSC network, believes that the infrastructure operator market will systematically develop.

The growth of traffic and the modernization of networks, which is fraught with difficulties with the placement of equipment at residential infrastructure facilities, will push telecom companies to use infrastructure operators, he said.

Grigoriev doubts the arrival of a foreign player in the Russian market, since the economy of infrastructure operators is built on a long period of return on investment, and an external investor can stop currency risks.^[25]

Moscow authorities have developed aesthetic requirements for base stations of cellular networks

At the end of November 2020, it became known about the aesthetic requirements for base stations of cellular networks developed by the Moscow Department of Information Technologies (DIT). The corresponding concept is being coordinated with other departments, and they can implement it in 2021, said Yevgeny Novikov, adviser to the deputy head of DIT.

According to Vedomosti, by the end of November 2020, there are about 90 thousand base stations in the Russian capital, and with the launch of 5G networks, the number of such equipment will at least triple. No aesthetic requirements are imposed on cellular infrastructure facilities: stations are located at traffic lights, power line supports, on building facades, etc.

The DIT concept requires the elimination of excessive number of overhead cables and wires, as well as excessive bulkiness of structures and equipment of base stations. Thus, the height of the rack or support of the station should not significantly exceed the height of the antenna itself, the color of the equipment should harmonize with the color and architectural details of buildings, it is proposed to place it not too close to the edge of the roof, and it is better to reduce the number of switching cabinets and other devices on supports and roofs if possible. Communication objects shall be marked.

DIT intends to change the visual appearance of the cellular infrastructure in four years. The design of 10-15% of the objects will have to be seriously changed in order to fit them into the architectural appearance of the city.

When developing the concept, international experience was taken into account - Great Britain, Slovakia, Spain, Germany, Italy, Singapore and Canada. In addition, before the development, the contractor analyzed the state of telecommunication infrastructure and communication networks, including a visual audit of three typical regions of Moscow: the central part of the city, Northern Butov and Zamoskvorechye.^[26]

Skolkovo proposed to simplify the installation of communication towers for the development of 5G

The Skolkovo Foundation (the competence center for the federal project "Regulatory Regulation of the Digital Environment") proposes to simplify the construction of infrastructure for telecommunications operators. This was reported in the draft amendments to the Land and Urban Planning Codes of the Russian Federation, which was prepared at the end of October 2020.

As Kommersant writes with reference to this document, Skolkovo proposes to allow operators to build and maintain communication towers up to 50 m high with base stations on a public easement. According to Aleksei Sokolov, deputy director of the Skolkovo development and planning department, this initiative assumes that operators will not have to change the type of permitted use of the site, and employees of such companies will gain access to maintain infrastructure, for example, repair of a tower or repair of an underground cable, without coordination with the owners of the site.

The ANO "Digital Economy" told the newspaper that by the end of October 2020, several bills are being worked out that should accelerate the development of communication infrastructure. For 5G networks, Russian operators will have to greatly increase the number of communication towers due to the fact that coverage is reduced at the frequencies used by the new standard.

Rostelecom, Tele2 and VimpelCom noted that the use of a public easement will reduce the time for commissioning the communication network. If this approach works, it will reduce the construction time of the communication infrastructure by 6-12 months.

The general director of "Geo Development" Maxim Leshchev, commenting on the proposals of "Skolkovo," noted that by the end of October 2020, the approval of the placement of the cell tower really stretches for a long time due to a large number of restrictions: the problem is not only a change in the type of permitted use of the land plot, but also its possible hit in the protective or security zone.^[27]

The Ministry of Digital Development asked to postpone the transition to domestic telecom equipment for IoT

As it became known on October 6, 2020, Ministry of Digital Development was asked to postpone the transition to domestic telecom equipment for the Internet of Things. Market participants complain about difficulties with the inclusion in the register of telecommunications equipment of Russian origin (TORP). Read more here.

A procurement union of telecom operators has been created in Russia

On September 25, 2020, it became known about the creation of the Procurement Union of Telecom Operators in Russia. It will include participants in the telecommunications equipment supply market, including customers, suppliers, manufacturers and financial agents. Read more here.

The Federation Council decided to extend tax breaks to manufacturers of telecom equipment

On August 17, 2020, it became known that the Council for the Development of the Digital Economy under the Federation Council wants to extend the tax maneuver in the IT industry and to manufacturers of telecommunications equipment. The Government of the Russian Federation is recommended to establish for such companies the rate of insurance premiums 7.6% instead of 30% and the rate of income tax 3% instead of 20%. Read more here.

The Ministry of Telecom and Mass Communications will simplify the expansion of the network for

On August 6, 2020, the Ministry of Telecom and Mass Communications presented a bill that is designed to simplify the expansion of the network for cellular operators. We are talking about providing non-discriminatory access for operators to objects of state and municipal property.

Similar norms are already in effect in a number of regions, including Moscow, Buryatia, Komi, Irkutsk region, etc. At the same time, there is no single procedure for interaction on the placement of equipment between telecom operators and authorities, as well as their subordinate institutions, the explanatory note says. In practice, this means a diverse set of conditions and rules in each case, the Ministry of Telecom and Mass Communications points out.

For example, the placement of communication equipment at the facilities of the Ministry of Emergency Situations requires a decision of the commission for the prevention and elimination of emergencies and ensuring fire safety of the country's constituent entity, and when deployed at the facilities of the Ministry of Education and Science, a decision of the commission for assessing the consequences of making decisions on reconstruction, which may take more than a year.

As reported in the explanatory note to the bill of the Ministry of Telecom and Mass Communications, complex bureaucratic procedures for concluding and extending lease agreements often lead to the dismantling of communication facilities, as a result of which budgets of all levels receive significant funds. So, over the past three years, by August 2020, about 600 base stations were dismantled, in the area of ​ ​ which citizens lost access to communication. According to the ministry, about 40 thousand communication facilities are located on state and municipal property, the total amount of rent for which exceeds 4.3 billion rubles a year.

With the development of a new 5G communication standard, which involves a multiple increase in the number of base stations, the objects involved now will not be enough, the authors of the document warn.^[28]

Moscow has developed requirements for the appearance of cellular communication equipment

In Moscow, architectural rules for the placement of telecommunications equipment have been developed. The draft concept "Urban aesthetics of communication," which spells out the requirements for the appearance of the communication infrastructure, is presented for expert discussion. This was announced on July 10, 2020 by the Moscow Department of Information Technologies (DIT), which is developing the concept together with a specialized organization.

DIT emphasizes: the capital acts as a driver for the development of promising standards and technologies for cellular communications, but the development of telecom infrastructure should not negatively affect the appearance of the city.

Base stations and cellular antennas are often placed on facades or roofs of buildings, including in historic areas of the city. Often this equipment is installed without taking into account the peculiarities of urban architecture, which negatively affects the appearance of the capital. The concept of "Urban aesthetics of communication" will primarily affect new equipment, including promising communication standards, which will be installed in historical areas, on "postcard" views, social and cultural-significant objects. These rules will be introduced gradually, taking into account the interests of telecom operators and will preserve the architectural appearance of Moscow. The capital's experience will be able to adopt and apply other regions of Russia, where there is a similar problem, - said the press service of the Moscow Department of Information Technologies.

During the development of the concept, international experience was also studied - Great Britain, Slovakia, Spain, Germany, Italy, Singapore and Canada. In addition, before developing the Concept, the Contractor conducted a comprehensive analysis of the current state of telecommunication infrastructure and communication networks. The research work included a visual audit of three typical districts of Moscow: the central part of the city, North Butov and Zamoskvorechye.

Based on the audit results, a list of the most frequent shortcomings in terms of aesthetic perception of communication equipment was formed. To eliminate these problems, the basic requirements for the dimensions and rules for the placement of mobile communication equipment, prescribed in the concept, are directed: for example, the color of remote equipment located on the facade of the building should correspond to the color scheme of the building itself, and antenna-mast structures should not obscure natural views and urban prospects. The Concept also defines several styles for the appearance of communication equipment, depending on their location.

Within a few days, the members of the working group will be able to study the draft concept and give feedback, which will be taken into account when further finalizing the document. The working group includes representatives of interested authorities of the Moscow Government, mobile operators and infrastructure companies, as well as leading architectural bureaus.

The idea of ​ ​ architectural criteria for the placement of mobile communication equipment was supported by operators and the Ministry of Telecom and Mass Communications of Russia. It is planned that the final version of the concept will be presented for expert discussion in the third quarter of 2020.

The authorities want to introduce forced purchases of Russian electronics for state-owned companies

On February 7, 2020, it became known that the Ministry of Industry and Trade had prepared a draft directive aimed at reducing purchases of foreign-made radio electronics by Russian state-owned companies, including their subsidiaries. Read more here.

2018

Russian manufacturers have proposed measures to increase their share in the Russian market

On September 27, 2018, it became known about the measures offered by Russian manufacturers of telecommunications equipment to increase their share in the domestic market. The corresponding document was sent to the Ministry of Industry and Trade by the TELMI alliance, uniting Russian manufacturers of telecommunications equipment Eltex, Mikran, T8,.

As the Kommersant newspaper writes with reference to the presentation of the alliance, the members of the association propose to introduce a mandatory quota of 25-30% for all buyers for the purchase of Russian-made equipment. At the same time, as TELMI notes, the quota should apply to both state buyers and commercial ones.

Telecommunications equipment of Russian origin has almost no preferences in tenders, the alliance explains. In this regard, Russian manufacturers also asked for state support in concluding long-term contracts with telecom operators, the Central Bank, Sberbank,  Russian Railways, Gazprom, Rosneft and other players.

In addition, TELMI proposed to compensate buyers for the replacement of foreign equipment with Russian equipment, abolish customs duties on elements that are not produced in Russia, and strengthen control over the payment of VAT when importing foreign telecommunications devices.

According to TELMI, by the end of September 2018, foreign companies occupy 92-94% of the Russian telecom equipment market. Domestic vendors, in the event of the introduction of these measures, can count on 30% of the market in the future for two to three years, according to the alliance.

At the same time, the newspaper writes, Russian telecom operators say that imported equipment is better in quality and price. Restrictions on its supply to the country will lead to higher prices for consumers.

The representative of the Ministry of Industry and Trade confirmed to the publication that the TELMI proposals were received by the department. They "will be studied and taken into account," he said.^[29]

Russian manufacturers ask to tighten imports of telecommunications equipment Huawei, ZTE and Cisco

In August 2018, Eltex, Mikran, T8, the Association of Manufacturers of Electronic Equipment and Devices, the Association of Developers and Manufacturers of Electronics (ARPE) and the National Platform for Industrial Automation Association proposed to the government to tighten the rules for importing telecommunications equipment.

Russian companies sent a letter to Prime Minister Dmitry Medvedev, in which they proposed to oblige Huawei, ZTE, Cisco, D-Link, NEC and other foreign manufacturers of telecommunications equipment "to switch to direct import of their products and refuse to use intermediary companies in customs clearance." 

It is proposed to introduce marking of telecommunication equipment and ensure the access of industry associations to customs statistics. If "suspicious transactions" were identified, associations could initiate vendor inspections involving police, tax and customs authorities. The authors of the initiative say that direct imports will "eliminate the underreporting of VAT" when importing equipment.

ARPE estimates the volume of the Russian telecommunications equipment market at 250-300 rubles at the end of 2017. At the same time, the share of Russian-made solutions does not exceed 6-8% (15-24 billion rubles), although they could cover the needs of large customers by 85-90%, the letter to Medvedev says.

According to the executive director of ARPE Ivan Pokrovsky, Russian equipment is mainly purchased for departmental and corporate communication networks, and if it becomes more profitable to produce equipment in the Russian Federation than to import, the market may increase several times.

Tigran Poghosyan, Senior Vice President of ZTI-Svyaztekhnologii LLC (ZTE), believes that it is possible to analyze the duties and conditions for the import of finished equipment and components, determining a different percentage of the advantage for Russian developers, but the use of such a criterion in tenders should remain at the discretion of the client^[30]

Market Size and Structure

2009-2011

According to the forecast of iKS-Consulting from the beginning of 2009, the market for data transmission equipment in Russia and other CIS countries in 2009 will decrease by 20% to 650 million US dollars, which is due to both a reduction in investment programs by leading telecom operators and a significant decrease in the cost of information communications (ICT) by non-telecommunications companies.

According to analysts, in 2010 the market was supposed to demonstrate double-digit growth rates, and within two years the sales of data transmission equipment will exceed the pre-crisis level ($760 million in 2010, $890 million in 2011).

2008

The data transmission equipment market in Russia and the CIS in 2008 grew by 17% to 810 million US dollars (in vendor prices). At the same time, Russia accounted for 72 %, Ukraine - 12% , Kazakhstan - 9%, other camps in the region - 7%, according to the iKS-Consulting report .

In the operator class equipment segment, the largest market share is occupied by 4 vendors:

• Cisco,
• Juniper,
• Alcatel-Lucent и
• Huawei.

In the segment of enterprise-class equipment, the leading position is taken by:

• Cisco, followed by
• Allied Telesyn,
• Alcatel-Lucent,
• HP,
• 3Com,
• D-Link and others that supply specialized niche products.

According to analysts at iKS-Consulting, the economic crisis has not had a very big impact on the consumer broadband market. In the first half of 2009 , the net growth of the broadband access subscriber base in Russia amounted to 1.5 million subscribers, in general , 3.2 million subscribers are expected in 2009. The number of broadband access subscribers amounted to about 11 million users. At the same time, a large number of operators continue to expand into new regions and build IP networks in the regions of presence, albeit on a smaller scale than planned a year ago. A similar situation is observed in other CIS countries: in Ukraine and Kazakhstan, the subscriber base of broadband access grew by 18 % in the first half of the year, according to the results of 2009 , an increase of 36-40% is expected. 

The corporate segment turned out to be more vulnerable during the crisis. The fourth quarter of 2008 and the first quarter of 2009 were a period of stagnation in the data services market in the business segment. However, a large number of operators report a slow but stable monthly increase in revenue from IP services (Internet access and VPN). As a result, in the CIS in the second quarter of 2009, revenue from data services in the corporate segment increased by 1 %.

Determination of the domestic manufacturer

• On May 31, 2010, the Government of the Russian Federation appointed by order No. 858-r the Ministry of Industry and Trade and the Ministry of Economic Development responsible for the development of criteria by which telecommunications equipment will be assigned the status of domestic. Thus, the White House expressed its dissatisfaction with the proposals on this issue prepared by the Ministry of Telecom and Mass Communications. Moreover, the Ministry of Economic Development has been appointed responsible for determining the domestic manufacturer - one of the main opponents of the proposals put forward by the Ministry of Telecom and Mass Communications.

The government instructed the Ministry of Industry and Trade, together with the Ministry of Economic Development, to develop and approve parameters by August 2010, according to which telecommunications equipment manufactured in the Russian Federation can be assigned the status of equipment of Russian origin. Ministries should also develop methods for determining these parameters.

The Ministry of Industry and Trade was obliged to post on its website information about the equipment that received the status of telecommunication equipment of Russian origin, and its manufacturer. In addition, proposals should be developed to reduce the import duty on components not produced in Russia and necessary for the production of telecommunications equipment, while increasing customs duties on foreign telecommunications equipment, analogues of which are produced in Russia.

The Ministry of Telecom and Mass Communications has left only one function in this matter: to ensure that the terms of the tender for licenses for the provision of communication services in mobile wireless access networks of WiMax technology and, in the future, LTE in the range of 2300-2400 MHz are entered into the mandatory requirement for the use of radio electronic means of domestic production.

Powers in determining preferences for domestic telecommunications equipment are assigned to the Ministry of Economic Development. It should provide, when placing orders for the supply of goods for state needs, a 15% surcharge to the contract price for those suppliers who offer telecommunications equipment of Russian origin.

The idea of ​ ​ developing measures to stimulate the use of domestic equipment has been put forward by representatives of the Ministry of Communications almost since the formation of this ministry in 2008. However, these declarations turned out to be difficult to implement, since the Ministry of Communications in practice faced a lack of production of modern telecommunications equipment in the country.

• In May 2010, Minister Igor Shchegolev announced that foreign companies could receive the status of Russian manufacturers of communication equipment. To do this, a foreign company must place the production of its equipment in Russia and localize it in accordance with the standards. This approach of the Ministry of Communications tried to consolidate in the prepared draft government decree. The document proposed to determine whether the equipment is domestic, based on the ratio of "foreign" and "Russian" parts, the Russian part of the costs should have been at least 30% for its production.

However, the project was not supported by the Ministry of Economic Development, and the government decided to completely transfer the solution to this issue to the rival of the Ministry of Telecom and Mass Communications.

• In August 2011, the Ministry of Economic Development and the Ministry of Industry and Trade signed a joint order approving the main parameters of Russian-made telecommunications equipment. The order is sent for registration to the Ministry of Justice.

The equipment is considered Russian or foreign, depending on the degree of its localization, says a representative of the Ministry of Industry and Trade. And the level of localization depends on the volume of developments (R&D) and technological operations carried out in Russia.

From the text of the order it follows: domestic equipment, if its manufacturer is a Russian resident, at least 50% of which belongs to the Russian side. It must have the rights to technologies and software in the amount sufficient for the production and modernization of equipment; have a research and production base; manufacture printed circuit boards in Russia and perform final assembly of equipment. The minimum allowable level of localization for all types of equipment is 60-70%, and the main share in the labor input structure - 95% - falls on technological operations.

For example, the structure of the labor intensity of the production of base stations and cellular repeaters is presented as follows:

• 15% - manufacture of printed circuit boards;
• 20% - installation of elements on boards, electronic modules and final assembly;
• 15% - manufacture of mechanical parts and housings;
• 45% - equipment programming and testing.
• R&D accounts for only 5%.

In the previous version of the order, not registered by the Ministry of Justice, R&D was not taken into account at all. This outraged foreign manufacturers - Nokia Networks (formerly NSN) (NSN), Ericsson, Huawei, ZTE and Alcatel-Lucent, which want to sell their equipment in Russia as domestic. Their technological production is located abroad (often in Asian countries), but there are development centers in Russia, and in March 2011 these five companies spoke in favor of prioritizing R&D in the cost of equipment. The first version of the methodology was largely written off from the "automotive," but in the case of communication equipment, the weight of R&D should be more significant, explained the general director of NSN in Russia and the CIS Kristina Tikhonova. As a result, the share of R&D turned out to be small, a source in one of the foreign companies complains.

A Huawei spokesman limited himself to saying that the company has long been waiting for a solution to this issue. Ericsson is considering localizing equipment in Russia and is opening an R&D center in Skolkovo, says its representative Sergei Skripnikov. It was not possible to get comments from Alcatel-Lucent (in 2010 it created a joint venture with Rostechnologies in Russia) and NSN.

Notes