LTE prospects in Russia and Central and Eastern Europe

Although tenders for LTE in most CEE countries have not yet been announced and despite the fact that 3G telephony is still in the process of being implemented, the prospects for LTE in the region remain positive – mainly because of the low level of broadband internet penetration. The Russian telecommunications market is the largest in the Central and Eastern European (CEE) region and possesses the greatest potential in this area. At the same time, among all of the countries in the CEE region, the situation in Russia with regard to the development of LTE is more complicated than elsewhere. Several factors contribute to this.
Firstly, frequencies used in Western and Central Europe for the development of LTE (2.6-2.7GHz) have already been taken. Although at the beginning of 2010 the tender for the 2.3-2.4GHz frequency (which may be appropriate for the development of LTE) was resolved, no mobile operator succeeded in acquiring a licence for it. This is because the rules have been formulated in such manner that a company already operating on the mobile telephony market is less likely to prevail in a tender. Of the 40 Russian regions in which there was a tender (around one-third of the country’s population), in 38 an LTE licence was won by subsidiaries of Svyazinvest. The only place in which the company did not obtain the licence was Chechnya, where the local operator, Vainakh Telecom, succeeded in acquiring it. One important aspect of the tenders was an obligation that only equipment from Russian companies could be used for the purposes of network setup.

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