Optical fiber is tightened with duties – Newspaper Kommersant No. 31 (7476) of 02/20/2023

The Telecommunication Technologies Consortium is asking for a 20% duty on foreign systems that are responsible for speeding up fiber optic communication lines. The goal is the development of domestic solutions and import substitution, and the products of T8 are specifically called. The idea is supported by Rostelecom. However, other market participants argue that in order to switch to domestic solutions, communication lines will have to be completely rebuilt due to the incompatibility of equipment from different manufacturers. This can increase the cost of wired Internet by 5-10%, experts say.

Kommersant got acquainted with the letter of the Telecommunication Technologies consortium (ANO TT; unites Rostelecom, Rostec, Element Group, etc.), sent last week to the Ministry of Industry and Trade. It follows from the document that the consortium members propose to introduce import duties in the amount of 20% of the cost for DWDM and DAS systems.

ANO TT explains that, judging by the results of public procurement tenders in 2022, the electronics market has not been freed from foreign vendors: “instead of top suppliers, players of the second wave came, who are not so good in terms of technology, but are extremely aggressive in price.” Among those who participated in tenders in 2022, ANO TT notes companies from China, India, Israel and the United States, without specifying the names.

ANO TT suggests using domestic solutions from T8 (they did not respond to Kommersant’s requests), namely the Volga DWDM system and the Danube DAS system. The Ministry of Industry and Trade told Kommersant that the feasibility of introducing duties on certain types of radio-electronic products has been “systemically studied” since 2020, “the issue of ANO TT can be considered if appropriate justifications are sent, including a comprehensive analysis of capacities and production volumes.” The head of ANO TT Gulnara Khasyanova, as well as in T8, did not answer “Kommersant”.

At the end of 2022, the government was already thinking about regulating the parallel import of foreign equipment, since due to its legalization, customs duties on the import of electronics decreased by 40% year-on-year (see Kommersant on January 26). Russian competitors of foreign suppliers are also actively putting pressure on the authorities. Back in the fall, domestic electronics manufacturers proposed introducing a 5% duty on foreign data storage systems, servers, laptops, smartphones, etc. (see Kommersant dated November 9, 2022). Russian LED manufacturers propose to increase import duties by 10-15% for foreign lighting equipment (see Kommersant of January 9).

Kommersant’s interlocutor among equipment manufacturers is sure that due to the introduction of duties on DWDM systems and other equipment, the cost of wired Internet in the Russian Federation will increase by 5-10%. “Rostelecom is the largest backbone operator in the Russian Federation, so if the company has problems with the transition to domestic solutions, protective duties on DWDM systems will not be introduced,” he said. Rostelecom told Kommersant that they “support import substitution.”

However, other operators are reserved about the initiative. MTS said that it is necessary to study the capabilities of the equipment and the ability to provide the required production volume. “The stability of the networks requires the adoption of balanced regulatory decisions based on the results of an expert discussion,” they noted. MegaFon does not support the proposal: “The initiative will not solve the real problems of import substitution and will only lead to an increase in operators’ costs. In such matters, it is necessary to compare in detail the technical characteristics of Russian and foreign solutions, and also take into account the compatibility of previously built infrastructure with domestic developments.”

Now, approximately 98% of Russian communication networks use imported DWDM and DAS systems, says the president of Zelax (produces telecommunications equipment) Sergey Sukhman, “the entire Internet works on them.” He believes that when operators switch to domestic solutions, all active equipment will have to be completely replaced, since the equipment of different vendors is incompatible.

Timofey Kornev, Nikita Korolyov