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- Trade invitation: the authorities have made concessions to operators in the allocation of 5G frequencies
Trade invitation: the authorities have made concessions to operators in the allocation of 5G frequencies
The authorities can make a number of concessions to operators when allocating frequencies for the deployment of 5G networks. The number of auction lots may double, their starting price will decrease, and imported equipment can be installed on new—generation networks - such conditions are being discussed by signallers with the authorities, Izvestia learned. The Ministry of Finance confirmed: Consideration of the terms of the auction, which was originally planned to be announced before the end of 2025, is indeed underway. Experts consider these measures logical, as they will reduce the one-time costs of obtaining 5G frequencies, which will not put pressure on the cost of communication. And the possibility of launching 5G on existing imported equipment and frequencies makes the arrival of technology in Russia in 2026 more likely.
How can the auction conditions for 5G frequencies change?
Russian mobile operators are discussing with the authorities the terms of the auction for the purchase of 5G frequencies. This was reported to Izvestia by two sources in the mobile communications market and confirmed by the Ministry of Finance.
The Agency is in close dialogue with telecom operators on the terms of the auction for frequencies for 5G networks. Different options are being considered for lots and conditions for allocating the resource, they said.
"During the dialogue, we hope to come to a mutually acceptable solution in which the costs of operators for the construction of 5G will be recouped and at the same time they will be able to fulfill their social obligations to cover," the ministry told Izvestia.
In general, the Ministry of Digital expects an improvement in the quality of communication services, an increase in data transmission speed and the introduction of Russian telecom equipment from the deployment of the 5G network in our country, the ministry added.
MTS, T2 and Vimpelcom declined to comment, while Megafon did not respond to a request from Izvestia.
According to the decision of the Ministry of Digital Affairs published in July, two lots with ranges of 4.8–4.99 GHz were to be put up for the frequency auction, which was planned to be held before the end of 2025. Their starting price was 26.2 billion rubles and 21.2 billion rubles. But the order to hold the auction was canceled, Vladimir Rodionov, head of the Department of licensing work in the field of communications at Roskomnadzor, said on October 22. The operators did not support the proposals regarding the allocation of frequencies at auctions, and now there is a discussion about adjusting the conditions, said Dmitry Tur, head of the Department of State Regulation of the Telecommunications Market at the Ministry of Digital Affairs.
An increase in the number of lots with frequencies that should be put up for auction is currently being discussed — there should be not two, but preferably four, according to the number of the largest Russian cellular companies, a source familiar with the managers of operators and officials of relevant departments told Izvestia. This information was confirmed by a source familiar with the negotiations. According to him, a limited number of lots carries commercial risks for signallers. Two federal companies can buy them out, but then subscribers of the remaining two may find themselves without 5G, he gave an example. Frequencies shared by two operators are also not the best option — someone in a certain location may need a larger range, and how to divide it between two competing companies is unclear, according to one of Izvestia's interlocutors.
Another wish of the operators is to reduce the starting prices at the auction, the sources said. Earlier, the head of the Ministry of Finance, Maksut Shadaev, told reporters that the starting price of lots at auction could be zero. But this statement has not yet been documented in any way, said one of the interlocutors of the editorial office.
In addition, officials and communications specialists are discussing technocracy — the possibility of using frequencies for 5G that were previously allocated for other standards, such as 3G and 4G, for fifth-generation networks and providing services using imported network equipment, the source told Izvestia.
Initially, it was assumed that the winners of the auction would deploy networks at frequencies of 4.8–4.99 GHz, using domestic equipment, one of the interlocutors of the editorial office drew attention. At the same time, all LTE networks built in recent years in the Russian Federation already have 5G Ready status. This means that after minimal technical work and obtaining permission to use the already allocated frequencies for 5G, next-generation communications could be launched in our country as early as 2026, the Izvestia source added.
What will the revision of the auction terms give subscribers?
Experts consider the revision of the terms of the frequency auction to be quite logical — the new messages that the authorities and business are currently discussing will have a positive impact on the development of the cellular market.
On the one hand, changing the starting price frees operators from quite significant one-time expenses, which would put a burden on subscribers and contribute to tariff growth, said Denis Kuskov, CEO of TelecomDaily. On the other hand, the use of imported equipment and already available frequencies would make it possible to launch 5G next year and provide some subscribers in large cities with a new standard connection, he believes.
While there is not enough Russian network equipment for the 4.8–4.99 GHz frequencies that were planned to be auctioned off, subscriber equipment is also in short supply, said Eldar Murtazin, a leading analyst at Mobile Research Group. The problem will be gradually solved, but taking into account the initial cost of the lots, the operation of 5G networks with a minimum of subscribers would be unprofitable for operators, he believes.
— Naturally, the operators are not satisfied with the number of lots. The signalers have an understanding that they will have to develop 5G together. But if one or two auction winners "jump out" ahead, and outsider subscribers find themselves without the fifth generation altogether, this will lead to a skewed market and unhealthy competition, the expert believes.
He believes that at first 5G coverage will be spot—based, and his subscriber base will not be massive. At this stage, in order to avoid unjustified costs that may affect the tariffs of end users, it is really advisable for operators to use imported equipment that they already have and previously issued frequencies.
Increasing the lots to four will allow the spectrum to be distributed among all key players, minimizing monopoly and frequency rents, says Anton Averyanov, CEO of the ST IT Group of companies, TechNet NTI market expert.
But the principle of technocrality will turn out to be key: it will allow launching on imported equipment (Chinese or hybrid) until the Russian analogues are ready, he believes. According to him, the introduction of imported equipment requires greater attention to the safety and fault tolerance of networks and, in order to develop the country's sovereignty, must be completely replaced with the advent of domestic solutions. For subscribers, these changes mean faster and wider adoption of 5G, which will directly improve the quality of communication in everyday life, the expert noted.
— An auction for the sale of frequencies for cellular networks (currently 5G) in any country is always a big news story and a success story. Radio frequencies are an irreplaceable resource, and operators always strive to get it, realizing that no one else will get these frequencies later," says Leonid Konik, partner at ComNews Research.
He believes that the 5G auction, which was planned to be held before the end of the year, was almost certainly doomed to failure. It was impossible to sell frequencies that were far from typical for 5G networks, and also had restrictions on use in the border zone, based on the announced principles, the expert added.
In his opinion, the revision of the terms of this auction and the postponement of its dates look extremely reasonable. If the mobile operators who won the auction get the right to reuse the available frequencies for fifth-generation networks and at the same time be free to choose network equipment suppliers, their interest will clearly increase, the expert believes.
At the same time, Leonid Konik believes that so far 5G will provide little directly to subscribers. But they will allow operators to unload LTE networks in large cities and crowded facilities, where they are already on the verge of overflowing with traffic. Corporate customers can also benefit from 5G networks: such features of this technology as low latency during data transmission, the ability to connect a large number of devices, including sensors and IoT sensors, and online allocation of guaranteed bandwidth for business-critical applications are addressed to them, he concluded.
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