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September 2019 www.intellinews.com I Page 2
Russia's mobile connection could get expensive
were supposed to decline each year, should be reconsidered.
Now, operators' payment will go up, according to a proposal cited by the Russian daily Vedomosti.
Currently, the total fee for using frequency bands paid by all Russian mobile operators stands at RUB15.6bn ($239mn) a year, of which RUB980mn ($15mn) is paid for 4G frequency bands.
Now the ministry is suggesting the 4G frequency band fee should go up by an average RUB980mn every year, although it promises the transition will be gradual.
In 2020, the fee will unchanged but rise to RUB1.5bn in 2021, RUB2bn in 2022 and RUB3bn in 2023. Operators developing 5G networks will enjoy a preferential treatment.
Using extremely high frequencies in the 30 GHz to 300 GHz range, 5G supports a much larger capacity for fast data transfer than 4G. In addition, 5G frequency bands can be used right next to other wireless devices without any interference unlike devices that use lower frequencies.
Under current calculations, operators would have to pay RUB112.5bn a year for 5G frequency bands, but the ministry is proposing a much lower fee of just RUB1.3bn a year.
Meanwhile, mobile phone operators are apparently unhappy about the proposal that will make frequency bands more expensive, forcing them
to pass their increasing costs on to customers.
Major mobile phone operators Mobile TeleSystems (MTS) and Tele2 have responded to the communications ministry proposal by saying
that for the next few years, 4G networks will remain in active use, and band frequency fees should therefore stay at their current levels.
Dmitry Markov, director for information infra- structure at Digital Economy, an organisation tasked with digitalisation issues, was quoted by Vedomosti as saying that operators in Russia's far-flung regions still have to invest in develop- ment of 4G networks, as not all territories are covered at this point.
As a result, increased frequency band fees will cause extra financial burdens on operators, which the promised discounts on 5G frequency bands won't cancel out: they'll have to pay extra 4G fees before investment in developing 5G networks could be recouped.
Meanwhile, other major cell phone operators, such as Megafon and Vimpelcom, insist that the potential of 4G has not yet been exhausted, and operators still need to invest in fourth-generation networks, with increased band frequency fees coming as an obstacle.
As a result, the process of building networks and base stations will slow, while end users will have to pay higher prices for mobile connection.
Lately, mobile phone operators have been unable to generate extra revenues from the increased quality of connection and larger size of traffic,
so they will have no option other than increasing prices for customers.
Digital Economy says that while the issue of preferential treatment of operators developing 5G networks has recently been discussed with the government, there has been no word about simultaneously raising 4G band frequency fees.
Operators say that the economy of developing 5G networks is not yet clear, and they may have to request that band frequency fees should be totally cancelled in some areas to spur the development of fifth-generation mobile phone connection.