3G: first beyond the Urals and then in Moscow
MTS intends to launch commercial 3G network in Krasnoyarsk and Norilsk. The company plans to invest about $1.55 bln into 3G development by 2011. Vimpelcom and Megafon do not name the regions, in which modern 3G networks will be launched in 2008. Specialists are sure networks will be launched in not more than 15 cities, Moscow is not included as there are difficulties with frequency release in Moscow.
Under the Krasnoyarsk Economic Forum MTS made a test call using 3G network thus demonstrating the possibilities of mobile television. According to Leonid Melamed, MTS President, Krasnoyarsk and Norilsk are the first cities beyond the Urals, where in 2008 commercial 3G networks will be deployed. MTS intends to invest $100 mln into the development of the region's technological infrastructure in coming years, including construction of the first 3G network beyond the Urals. According to Mr. Melamed, general investment into the 3G infrastructure development by 2011 amounts to 38 bln rubles (about $1.55 bln). Besides, by 2020 up to 35 bln rubles (about $1.43 bln) will be spent on developing and implementation of 3G telecommunication services. Earlier, Leonid Melamed forecasted that by 2011 there would be 11 mln MTS 3G subscribers in Russia.
Alexander Izosimov, Vimpelcom's Director General, reported earlier that the company planned to invest $300-350 mln into 3G development in 2007-2008. Megafon recollects that it intends to invest about $1 bln into 3G in the coming three years. In 2008 the company invests about $250 mln into 3G, $100 mln being spent on developing the network launched in St. Petersburg.
Megafon does not make any forecasts regarding 3G subscriber base. "European communication operators do not differentiate GSM and UMTS subscribers in general, - Marina Belasheva, Head of media communication department at Megafon, says. – Subscribers use both networks if their phones support both standards. Judging from our experience, we can say that is the best way out. But under such conditions it is impossible to calculate the exact number of 3G subscribers". According to Ms Belasheva, the number of handsets supporting 3G sold is the best factor in counting 3G subscriber base size. Thus, in St. Petersburg there are about 300 thousand 3G devices, that is the volume of Megafon's possible market for the near future.
"First of all, 3G will be developed in the regions with free frequency resources and effective demand for new services", - Megafon highlights not clarifying, where 3G networks will be launched. MTS confirms that in 2008 the company plans to build 3G networks in Novosibirsk, St. Petersburg and Moscow. All operators hope that by the end of 2008 the issue of releasing frequencies in the Moscow Regions will be resolved, so the company will be able to count the amount of finance necessary to release frequencies. Judging from the current situation, 3G networks will be deployed in Moscow not earlier than 2009.
"This year only test zones will be deployed in the Moscow Regions, - Maxim Savvatin, iKS-Consulting senior analyst, says. – In general, when developing 3G the key problem is frequency release, which is dealt with various success depending on the region. Not more than 15 3G networks might be launched over 2008, first of all in the cities with a million population and in Sochi". According to experts, by 2008 end there will be no more than 150 thousand 3G subscribers in Russia.
It should be noted that tenders for 3G licenses were held in Russia in the first half of 2007. Vimpelcom, Megafon and MTS won the tenders. By the end of 2007 the mentioned companies selected equipment suppliers.
