Russian Cellcos Continue to Wait for 3G Greenlight in Moscow: Will WiMAX Players Take Advantage?

Delegates at Informa Telecoms & Media’s sixth annual Russia and CIS telecoms industry conference heard UMTS Forum President Jean-Pierre Bienaime express concern about the ongoing delay with the launch of 3G services in the crucial Moscow market. Coming just days after a Virgin-branded, WiMAX-deploying broadband service provider announced its market entry across Russia, Bienaime’s comments extended to his expressing the worry that Russia’s big three mobile operators (MTS, MegaFon and Vimpelcom) may lose ground to this and other companies using WiMAX technology to extend the availability of fast wireless broadband services. Although 3G services are going live elsewhere in Russia, the commercial launch of services in Moscow continue to be delayed by wrangles over the availability of spectrum resources long reserved for military use.

MegaFon Open this year's conference

Of those big three cellcos, MegaFon enjoyed the privilege of opening this year’s conference with a keynote address from Deputy CEO Alexey Nichiporenko, who was later asked about whether his company would ever be inclined to look more favourably on opening their network to MVNOs. The question came from Vladimir Shulga, head of People’s Mobile Telephone, a company set up with the aim of launching an MVNO. Nichiporenko was adamant that only MVNOs offering niche services to niche segments would ever be welcomed onto the MegaFon network, saying that there was no desire to enable the market entry of any potential mass-market competitors.

Other big-hitting speakers in the Keynote session included:

• Eldar Razroev, CEO, of Sistema Mass Media 
• Konstantin Tikar, General Director, of the Belarusian incumbent carrier Beltelecom 

Tikar gratefully acknowledged the shift of the conference away from purely mobile industry issues and towards the broader range of opportunities and challenges facing all telcos in an era of convergence between fixed and mobile services and between the convergence of the telco, media and IT industries. IT-telco convergence was on the mind of audience member directing questions to Jean-Pierre Vandromme, whose role is changing to that of CTO of the merged business created by the coming together of Vimpelcom and fixed-line operator Golden Telecom. Having spoken at length about how the new organisation will approach FMC services, Vandromme was less keen to share on the issue of whether the integrated telco will become an ICT player in the near future. Vandromme was more forthcoming about his view of the power of Vimpelcom’s Beeline brand, stating that it outranks global consumer products giants for recognition and approval on the Russian market. This was in striking contrast to comments made by MTS Russia CMO Garrett Johnston, who spoke enthusiastically about finding partnerships with the makers of the best-lover consumer products and services across almost every sector one could name.

Russian telcos have long been tipped as being ready for further international expansion. While MTS and Vimpelcom have been the most notable examples of Russian telecoms businesses growing their footprints across national borders, much of their activity has so far been confined to other former Soviet Republics. Both have operating subsidiaries in the markets of the Caspian Sea region and Central Asia, where they compete with TeliaSonera/Turkcell-backed MNOs. It was fitting that Turkcell were represented at a high level – Life:) GSM of Ukraine, an operator in which the Turkish MNO owns a controlling stake, sent CEO Tansu Yegen to join the discussions. Also present was Tayfun Cataltepe, Chief Corporate Strategy & International Expansion Officer of Turkcell itself. Turkcell is also strongly tipped to be in the running to acquire struggling Belarusian MNO BeST.

In terms of where Russian telcos will turn next to grow their businesses internationally, this conference will not have dampened speculation about whether Iran is in their sights. Representatives of the Iranian Government were on hand to keep the imminent sale of their country’s third national mobile licence in the spotlight. The Iranian delegation was also keen to discuss the sale of spectrum and licenses for the deployment of WiMAX services.

Russia & CIS Com will return to Moscow in June 2009 and we expect the audience to continue to reflect the full range of telecoms businesses competing for wallet share in the growing, oil-rich economy of the region.

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