More change in the Russian LTE market as the former WiMAX operators give way to LTE. Scartel, owner of the Yota brand and services, is to be acquired by Megafon, the country’s second largest cellco, raising question marks over the future of Yota’s plan to support a wholesale 4G network for use by all the main operators. And enterprise focused 4G Enforta is to relinquish spectrum in 102 cities.
Yota was the centrepiece of a government backed scheme to accelerate LTE roll-out in Russia by creating a wholesale network, in the firm’s former WiMAX spectrum, which would be shared by the top three cellcos ‘ VimpelCom, Megafon and MTS ‘ and the wireline incumbent Rostelecom. However, there have been many disputes and delays over the actual contracts, and Megafon is the main user of the service, while in the meantime, the operators have acquired 4G spectrum of their own and have started build-outs.
Megafon has always been close to Scartel because they share the same controlling investor, Alisher Usmanov, who owns 50% of the former and 82% of the latter. Now, regulatory approval for their merger has been granted by Russia’s anti-monopoly service, FAS, but with conditions to preserve competition, probably including divestment of licences in some markets. It is now likely that Megafon will merge its own LTE network with Yota’s to reduce cost, but ending the wholesale dream.
Meanwhile, Prestige Internet, which offers its WiMAX services under the Enforta brand, is to give up frequencies in the 2530MHz-2570MHz and 2650MHz-2690MHz bands in 102 cities, with a view to the spectrum being refarmed for LTE use by the big four operators. All cities affected by the switch-off have a population of between 50,000 and 100,000 people. It currently remains unclear whether or not Enforta will be issued replacement spectrum, and in which band.
The big four have been campaigning for a more rational allocation of LTE-suitable spectrum, as most frequencies in the key European 4G bands ‘ 2.6GHz and 800MHz ‘ are already allocated in Russia. In the case of 2.6GHz, the spectrum is held by a number of WiMAX operators covering 390 regions, and to 38 providers of legacy wireless cable and TV services based on MMDS. The Enforta move suggests that many of these fragmented holders will have to give up their licences to help the main cellcos achieve national coverage and full broadband capacity, in line with government national high speed access goals. The 800MHz band is mainly occupied by the military though it will be freed up for LTE over time.