Network Equipment (Russian Market)

Network equipment (Global Market)

Main Article: Network equipment (Global Market)

Production of network equipment in Russia

2023

The production of switches and routers in Russia over the 4 years has grown 3 times to 236 billion rubles

For the period from 2019 to 2023, the production of switches and routers in Russia increased in value terms by about three times - from 76 billion to 236 billion rubles. At the same time, the size of the market as a whole rose from 634 billion to 784 billion rubles (revenue of all companies engaged in the production of various types of telecom equipment). Such data are provided in a study by J'son & Partners Consulting, the results of which TAdviser got acquainted with in mid-October 2024.

According to estimates, in 2019-2023, imports of communication equipment to Russia decreased from 583 billion to 562 billion rubles. At the same time, the share of foreign equipment decreased by 38%. At the same time, the share of domestic producers in the total market volume increased from 12% to 30%.

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The continuous growth of Russian production is due to the development of production competencies and deepening the localization of products, strengthening the market share of Russian players, scaling their business, favorable regulatory regime in relation to domestic suppliers, sanitary pressure and the departure of foreign companies, mastering the production of equipment of high technical complexity. In 2023, the criteria for the admission of electronics during public procurement were tightened in order to provide advantages to product manufacturers on the Russian element base. The highest priority will be given to equipment running on Russian processors: it is classified as a "first level" product and has the corresponding mark in the register of the Ministry of Industry and Trade. An important factor in demand for Russian-made telecom, computer, ICT equipment, including industrial ones, are quotas for state purchases of equipment included in the Unified Register of Electronic Products of the Ministry of Industry and Trade of the Russian Federation, obliging state customers to purchase Russian equipment in the amount expressed as a share of their annual product demand.

J'son & Partners Consulting notes that the sales structure of switches and routers in Russia as a whole repeats global trends. In particular, there is a gradual transition to higher-speed technologies: 1G - > 10G; 10/25G—>100G; 100G - > 200/400G and above. Due to "sanctions geopolitical inflation," the market in Russia is growing faster in money than in pieces. The increasing performance requirements of data centers and the need for high-load platforms are forcing equipment manufacturers and data center owners to implement new and specific technologies for network data transfer protocols. The key market drivers are:

• Technology and Industry Trends, Telecom Equipment and Services Market Growth in Line with Global Trends;
• Requirements for capacity expansion taking into account increased traffic and speeds on the part of consumers;
• Increase in the share of switches and routers with connection speeds of 25, 100 Gbps and higher in Russian data centers;
• Active creation of new data centers;
• Replacement of imported equipment with Russian equipment taking into account the technological cycle of disposal and end of service life of the equipment;
• Compliance with the requirements of the regulator for the use of mainly domestic software, software and hardware systems, electronic component base, telecommunications equipment of Russian origin in regulated markets (industries) and government bodies.

It is noted that the measures taken at the highest state level will strengthen the financial stability of the radio electronics industry and accelerate the creation of new high-tech industries in the strategically important sector of telecommunications infrastructure.^[1]

Start of production of Wi-Fi 6 routers

At the end of January 2023, it became known about the upcoming launch of the production of Russian routers with support for the Wi-Fi 6 wireless communication standard. The corresponding plan is contained in the roadmap "New Industrial Software" (NIPO).

As Izvestia writes with reference to this document, the project will be supervised by the Ministry of Digital Development of the Russian Federation. It is assumed that the production of domestic routers will begin by the end of 2024, and by the beginning of 2025 at least 500 thousand Wi-Fi 6 devices should be produced in Russia. The NIPO lists the largest Internet providers like ER-Telecom Holding and Rostelecom as potential state customers of domestic equipment.

Wi-Fi 6 routers will be produced in Russia

According to experts interviewed by the newspaper, by January 2023 there are enterprises in Russia producing Wi-Fi routers on an imported component base, but devices for Wi-Fi 6 are not yet available. They note that such routers are more complex equipment, the introduction of which will reduce the interference that gadgets that work in the old range create for each other and increase the access speed for users.

The Ministry of Digital Development of the Russian Federation reported that by the end of January 2023, Russian manufacturers have in their hands prototypes of Wi-Fi 6 routers, both consumer and corporate. The equipment is undergoing the final stages of testing: production is scheduled for the second quarter of 2023, the department said.

The Ministry of Digital Development added that a Wi-Fi 6 router can serve more gadgets than Wi-Fi 5 routers, which may be relevant for offices, cafes and other public places where several dozen subscribers connect to one point.

By January 2023, the production of routers for Wi-Fi 6 in the Russian Federation is largely not established due to the fact that it requires a complex component base, an Izvestia source in the communications market claims. For the manufacture of such devices of previous generations, microelectronic components are enough, which are offered by many suppliers: they are easy to find on the market even under sanctions. Wi-Fi 6 and 6E require more modern and high-tech chips, it is more difficult to find them, the source said.^[2]

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