Operators cut fiber to Asia – Kommersant

The shortage of foreign equipment, the decrease in the investment attractiveness of the fixed-line industry, combined with its high capital intensity, threaten the gradual degradation of the telecom infrastructure of the Russian Federation, market participants believe. To stimulate investment, operators propose to introduce tax incentives, and for the development of the industry – to lay new trunk communication lines oriented to the East. Under the current conditions, both proposals look difficult to implement, experts say.

The backbone communication networks of Russian operators can be fully loaded by 2026, given that the annual growth of traffic in the backbone networks is over 25%, follows from the estimates given by the participants in the backbone communications infrastructure market in the “Strategy for the development of the telecom industry until 2035” (see Kommersant dated May 19). The main part of the main fiber-optic communication lines (FOCL) was built in 1995-2005 and is already loaded by more than 75%.

The average life of FOCL is about 20-25 years, and in the period up to 2035, backbone networks will have to be replaced, while their work is organized on DWDM equipment (technology for high-speed communication networks) of foreign manufacturers that have limited supplies to the Russian Federation, the document says. But in order to switch to domestic solutions, communication lines will have to be completely rebuilt (see Kommersant of February 20).

The total length of FOCL in the Russian Federation is 1.3 million km (backbone and intrazonal network by region), the main traffic is concentrated in the European direction (85%), and only 15% in Asia, the document says. In general, it follows from the strategy, the Russian Federation is lagging behind in the world rankings in terms of fixed network speed, providers’ revenues are stagnating, and “the lack of investment attractiveness of the industry, combined with high capital intensity, threatens the degradation of the telecom infrastructure.”

To solve the problems, it is proposed to reduce VAT rates for the industry from 20% to 10%, and insurance premiums – from 22% to 7.6%, by analogy with IT companies, introduce an increasing coefficient for the cost of depreciation of telecom equipment, give benefits access to electricity.

In addition, for the development of FOCL, it is proposed to implement a number of projects in the format of a public-private partnership with the involvement of funds from the National Welfare Fund to “imbalance traffic” in favor of friendly countries. Among them are the projects of the main network Moscow-Beijing (6.8 thousand km), Moscow-Delhi (5.9 thousand km), the Trans-Caspian transport route (315 km), Murmansk-Vladivostok (along the Northern Sea Route, 12.6 thousand km). The Ministry of Digital Development clarified that these measures are proposals of the working group on fixed communications: “They require discussion and may not be included in the final document.” The Ministry of Finance reported that they had not yet received the document.

The network along the Northern Sea Route is already being laid as part of the Polar Express project, which is being implemented by the State Corporation Advanced Technologies Administration (UPT) since 2021, it was previously reported that it is estimated at $1 billion, financed from the state budget and should be completed by 2026 . The Moscow-Beijing backbone network project may be part of the TEM Next project “Europe-Asia Transit”, which Rostelecom has been implementing since 2021, suggests a Kommersant source in the industry. According to another Kommersant source, the construction should go with the participation of China, but the list of partners, as in the Moscow-Delhi network project, is not yet available: “In total, these projects may require up to $1 billion.”

As part of the Trans-Caspian transport route, a joint project of Kazakhstan, Azerbaijan and Turkmenistan TCFO (Trans-Caspian Fiber Optic) is already being implemented. “In general, many FOCL projects have appeared in Central Asia now, and the NWO has noticeably motivated participants to build networks bypassing Russia,” says a Kommersant source in the telecom market.

More than 20% of traffic between China and Europe is transported through the Transtelecom network, the company told Kommersant: “Based on our estimates, the construction of new backbone networks along strategically important routes may become financially difficult. If we can talk about the availability of equipment from various vendors with a sufficient degree of optimism, then the creation of the cable systems themselves can become a significant burden.”

You can give any discounts, grants and preferences, but there will be nothing to spend them on, since there is a growing shortage of optical fiber, confirms Alexei Slukin, editor-in-chief of the Telekommunalka Telegram channel: “1.3 million km of FOCL is about 20 million km of optical fiber. The crisis of 2022 reduced the production of FOCL in Russia by 77%. The price of optical fiber also increased by 11.6%, from 52,000 to 59,000 rubles. per kilometer, from 2019 to 2022. Moreover, 6.8% of 11.6% were in 2022.”

It will not be easy to bring the proposals of operators to implementation, since opponents have counterarguments, says Alexander Sivolobov, deputy head of the NTI Competence Center based on Skoltech for wireless communication technologies: “Now reducing the sources of state budget formation will be considered as an untimely idea.” He notes that interstate telecom construction projects have a long-term payback and return on investment plan: “In 2022, many backbone network projects have already appeared along the eastern and southern borders of Russia, but without passing through its territory. This fits in with the strategies of Western countries to create alternative routes for traffic transit to the Asian region.”

Yulia Silence, Timofey Kornev