Tele2 did not receive tens of thousands of Ericsson base stations for 18 billion rubles, but sued only 380 thousand euros

2024: Tele2 did not receive tens of thousands of Ericsson base stations for 18 billion rubles, but sued only 380 thousand euros

On June 20, 2024, the cassation court upheld the previous decision on the claim of the Tele2 operator (T2 Mobile LLC) against the Swedish manufacturer Ericsson. We are talking about the proceedings related to the framework agreement for the supply of telecommunications equipment, which were stopped against the background of the formed geopolitical situation.

According to the Kommersant newspaper, Tele2 tried to challenge the decision, according to which a penalty of €380.1 thousand was approved instead of the requested €4.1 million. The court motivated its decision there that the imposition of sanctions is considered force majeure, which under the contract includes "wars, civil unrest, government actions" and other circumstances. The cassation also refused to increase compensation for Tele2: thus, the decision of the Ninth Arbitration Court of Appeal to recover €380.1 thousand from the defendants was left unchanged.

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An analyst at the profile Telegram channel Aleksei Boyko claims that the Tele2 operator received less than "tens of thousands" of Ericsson base stations in the amount of approximately 18 billion rubles. The plaintiff still has the right to file a complaint with the Supreme Court - such a development is "likely and discussed." However, Dmitry Lysenko, adviser to the practice of dispute resolution and bankruptcy at Melling, Voitishkin and Partners, emphasizes that as of mid-2024, there is no single approach in judicial activity to whether to recognize sanctions as force majeure.

The situation is complicated by the fact that Satel TVK LLC, which supplied Ericsson equipment to Tele2, is involved in the case. Anna Barabash, CEO of Enterprise Legal Solutions, notes that Russian courts rarely side with foreign suppliers who have left the country. But when the defendant is an intermediary from Russia, who himself buys goods and faces the manufacturer's refusal (in this case, Satel TVK), sometimes sanctions are recognized as force majeure.^[1]

2021: Tele2 buys 50,000 5G-enabled Ericsson base stations

On May 19, 2021, T2 RTK Holding announced the purchase of 50 thousand Ericsson base stations supporting 5G networks. Tele2 will install this equipment in 27 regions of Russia, including the Moscow and Leningrad regions.

According to TAdviser in Tele2, designed for the period 2019-2023. the project involves the introduction of a total of more than 100 thousand base stations Ericsson Radio System. Thanks to cooperation with the Swedish company, the Russian mobile operator expects to increase the network capacity and data transfer speed, prepare the infrastructure for the quick launch of the 5G standard.

Tele2 buys 50,000 5G-supporting Ericsson base stations

Tele2 is important to remain one of the industry leaders in technological development: to timely introduce innovative technological solutions and modernize the network to launch 5G. Since 2015, we have been installing 5G-ready stations in the capital, and our project with Ericsson accelerates the penetration of the most advanced equipment on Tele2 infrastructure throughout the country, "said Alexey Telkov, Deputy General Director for Technical Infrastructure at Tele2 .

According to him, the COVID-19 coronavirus pandemic has accelerated the construction of networks due to the rapid growth in the consumption of mobile traffic and the active addiction of customers to digital services. In 2020, Tele2 increased the total number of base stations by 29%, and in the Moscow region - one and a half times. At the end of 2020, Tele2 covered 97% of the population in the regions of presence with 4G networks, 94% with 3G networks, and 97% with 2G. This accounts for 83-85% of the total population of Russia.

Ericsson, commenting on cooperation with Tele2, noted that all the company's equipment has a long life cycle and ensures compatibility and continuity of product lines of different generations, which will allow the telecom operator to reduce capital and operating costs during the construction and expansion of networks.

2020: Installation of 25 thousand base stations

On August 18, 2020, Tele2 announced the installation of 25,000 new Ericsson base stations. The Russian mobile operator intends to introduce the same number of equipment.

We are talking about installing Ericsson Radio System base stations, thanks to which Tele2 infrastructure performance has already increased 1.7 times. The equipment is installed in 27 regions of Russia, including Moscow and St. Petersburg.

Tele2 has installed 25,000 Ericsson base stations and will introduce the same number

Tele2 in its message cites data from Roskomnadzor, according to which in 2019 the company increased the number of base stations by 20% to 178,504, ahead of the nearest competitor in terms of development dynamics by 6 percentage points. In terms of the total number of base stations, Tele2 occupies the third position in the industry, in terms of the number of RES of the LTE standard - the second place.

Tele2 says that the operator's 4G network coverage has improved to 94.8% of the covered population in 2019, and the data transfer rate has risen by 8%. The efforts made by Tele2 to improve the quality of services have a positive effect on the consumption of mobile Internet services and the company's financial performance, Tele2 added.^[2]

By August 18, 2020, Tele2 operates in 67 regions of the Russian Federation. The company does not specify how the number of base stations in the Tele2 network will grow after fulfilling the terms of the contract with Ericsson. It is also unknown how many new stations the old ones will replace. The base station costs about 10,000 euros, the contract can be estimated at 500 million euros, Interfax calculated. General Director of TMT Consulting Konstantin Ankilov agrees with the assessment.

The cost of a cellular network consists not only of the cost of base stations, the head of Telecom Daily Denis Kuskov explained to Vedomosti: installing 50,000 such objects and laying communications to them can cost about $2 billion. According to his calculations, the number of base stations purchased by Tele2 will allow several dozen Russian regions to cover LTE.

2019: Tele2 and Ericsson enter into agreement

On February 26, 2019, Tele2 announced that it had signed a cooperation agreement with Ericsson. The document aims to develop Tele2 infrastructure using Ericsson Radio System (ERS) equipment. The parties agreed to introduce ERS systems and software for 4G/3G/2G networks with support for 5G technology throughout Russia. The project will allow Tele2 to increase data transfer rates, modernize the network against the background of active traffic growth and prepare it for the launch of the 5G standard.

Sergei Emdin, CEO of Tele2 in Russia and Sebastian Tolstoy, President of Ericsson in Eastern Europe and Central Asia

The corresponding agreement was signed by Sergei Emdin, CEO of Tele2 in Russia and Sebastian Tolstoy, President of Ericsson in the Eastern Europe and Central Asia region. According to the agreements, the parties will interact in the implementation of Ericsson technological solutions based on the Tele2 infrastructure. Cooperation will allow the operator to improve its network and technologically prepare for the launch of the implemented communication standards. The agreement was concluded for a period of five years and involves joint work in 27 regions of Russia, including Moscow and St. Petersburg.

The joint project of Tele2 and Ericsson will become the technical basis for the further development of the digital ecosystem of Tele2 services and will increase the availability of modern technologies for subscribers. Under the agreement, partners will install more than 50,000 additional base stations in Russia. Tele2's infrastructure will be modernized taking into account the constant growth in traffic traffic.

The volume of transmitted data in the Tele2 network is growing due to the distribution of digital services, increasing consumption of mobile Internet and the development of the IoT segment. According to the latest Ericsson Mobility Report, 4.1 billion devices will be connected to the Internet of Things by the end of 2024. The monthly consumption of mobile traffic in the world will increase by about five times in six years - from 27 to 136 exabytes.

Tele2 will introduce equipment and software of the Ericsson product line with support for 5G technology on its network. In the future, this will ensure a significant capacity of networks and the constant connection of multiple users, devices and objects to them.

Obviously, the consumption of mobile Internet traffic in operator networks will continue to show exponential growth. We are developing a high-quality network with modern equipment, taking into account the increasing volume of traffic and technological changes in the industry. The construction of 5G networks in Russia requires solving a number of infrastructure issues. However, after all obstacles are removed, the deployment of networks will take place at a faster pace than the construction of LTE, including thanks to the use of existing infrastructure.

Tele2 is our important strategic partner, and we know that the operator's subscribers have high requirements for the speed of mobile Internet. The instant data transfer users need can provide improved 4G networks and fifth-generation communication technologies. 5G support is implemented throughout Ericsson's line of hardware and we can deploy the appropriate technology once operators get the frequencies they need.

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