The “big three” had difficulties with the renewal of licenses for 3G

A cell phone tower

Photo: Yakov Andreev/RIA Novosti

In the spring of 2017 the operators of the “big three” expire Federal licenses for third generation communication (3G). Roskomnadzor will decide how to extend them after the annexation of Crimea that companies do not fall under the sanctions

Thursday, February 2, Roskomnadzor will be a meeting with representatives of the three largest Russian mobile operators — MTS, “MegaFon” and “VimpelCom”. It will discuss the issue of extension of licenses for provision of communication services in the UMTS standard (3G). About RBC said the representative of one of participants of the market. The representative of Roskomnadzor Vadim Ampelonskiy has refused to comment on this topic; however, a source close to the Ministry confirmed that such a meeting is planned.

The “big three” received a Federal 3G license at the competition in may 2007. Their duration is 10 years. Under the terms of the licenses, the company needs to provide services throughout the country. In the Crimea, which was annexed by Russia in early 2014, these requirements did not apply.

Until January 1, 2017 acted as approved by the government resolution No. 1326 provision on peculiarities of application of the legislation of Russia in the sphere of communication services on the territory of Crimea and Sevastopol. According to this document, licenses, permits to use radio frequencies and numbering granted for the whole country, has not acted on the Peninsula. As explained RBC, the head of the telecommunications and media group of the legal company “Pepeliaev Group” Natalia Kovalenko, the expiration of this provision does not mean that the Federal operators are obliged to provide services in the Crimea. “If a Federal license was obtained to the annexation of Crimea, to the license terms in the territory of the Crimea was not and could not be identified, and therefore its possessor is not obliged to provide services there,” explains Kovalenko.

Issued in MTS, “the Megaphone” and “VympelCom” in 2007, the licences specify the period not later than which the operator must begin to provide services in each of the 86 regions of Russia (as it was at the time of issuance of the document), and Crimea is not among them.

The source of RBC, close to Roskomnadzor recalled that in December 2013 the state Commission for radio frequencies (SCRF is responsible for the distribution of airtime in the country) decided that all the operators in obtaining new, modification or renewal of previously issued permits for use of frequencies for 2G, 3G and 4G needs to obtain encumbrance on the coverage of small settlements. In the case of range 1-2,2 GHz, frequency in which the “big three” won the competition in 2007, communication should be extended to all towns of the licensed territory (i.e. across the country, including in Crimea) with population of more than 2 thousand people.

MTS and VimpelCom are traded on us exchanges NYSE and NASDAQ, MegaFon on the London stock exchange. And out of the “big three” on the market of Crimea is fraught with Western sanctions. For example, American and European equipment suppliers and other partners, operators might refuse to work with the Russian operators. You may also need to restructure the composition of the shareholders of companies which include foreign companies and funds.

Before joining of Crimea to Russia on its territory worked in Ukrainian “daughter” of MTS and “Kyivstar” (along with “Vympelcom” owned by VimpelCom Ltd.). These companies were forced to withdraw from the local market in order not to violate the legislation of Ukraine. To date, the 3G network in Crimea has launched the local players, and new may not be enough space in the ether, but to verify this, you can’t — data on the distribution of radio frequencies on the Peninsula classified.

According to a source close to Roskomnadzor, MTS, “MegaFon” and “VympelCom” will have to relinquish Federal licenses 3G. Now consider the option that they will receive permission to provide this service in certain Federal districts or regions, except Crimea and Sevastopol.

“It is important that subscribers are not left without a connection, for now, smartphones with 3G — the most popular device to access the Internet. As this will be the question of the second plan”, — told RBC representative of MTS Dmitry Solodovnikov in response to the question, is the company willing to abandon the Federal 3G license. According to “TMT Consulting” at the end of 2016 in Russia, there were 113 million mobile Internet users. The company has not estimated the number of 3G subscribers, but we know that a 4G connection was used by 22 million subscribers.

Press-Secretary of “VimpelCom” Anna imasheva informed that the company has applied for renewal of the 3G license, but from further declined to comment. The representative of “Megaphone” Olga Kuzicheva not answered the questions of the RBC.

For other Russian mobile operators providing 3G services, the problem is irrelevant: they work on the basis of the decision of the SCR, allowing for networking to use a 3G license and frequency allocated for 2G connection. The latter, in turn, was allocated to the individual regions and not the whole country.

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