Rostelecom will increase tariffs for operators by 10% due to economic factors

The Ministry of Digital Development supported Rostelecom’s proposal to increase tariffs for connection and traffic transmission services provided to mobile operators. By the beginning of 2024, prices for Rostelecom’s services to competitors may increase by up to 10%. Large telecom operators hope to compensate for the increase by optimizing their own infrastructure, but experts are confident that rising prices for end users are inevitable.

“Kommersant” got acquainted with the draft order of the Ministry of Digital Development, posted on November 28 on the portal regulation.gov.ru, on increasing the maximum maximum prices for connection and traffic transmission services provided by Rostelecom. From the document and the explanatory note to it it follows that the Ministry of Digital Development proposes on average to raise prices for traffic transmission by 10% due to “economic changes of the last two years.”

We are talking about the total inflation rate, which for 2020–2023 amounted to 32%. The initiator of the increase is Rostelecom itself, it follows from the document. The approved prices will be used for settlements between Rostelecom and affiliated telecom operators.

Now fixed-line and mobile operators must pay each other for the service of terminating calls to their networks (the so-called interconnect). Payments from fixed-line operators to mobile phones are not regulated, but the tariffs at which mobile operators pay significant (at least 25% of the number capacity in the region) fixed-line operators, in particular Rostelecom, are set by the state.

The level of tariffs for telecom operators depends on the type of connection – local or zonal, as well as on the region itself where the final service was provided. For example, the cost of terminating a call on the network of another telecom operator in the Central Federal District under the project will be 1.38 rubles/60 seconds. with the previous indicator 0.76 rub./60 sec. (within one locality). Outside the territory of one settlement, the cost will be 1.55 rubles/60 seconds. instead of 0.96 rub./60 sec.

The previous increase in tariffs was announced in the fall of 2021: then Rostelecom asked to increase the cost of its services by 6.5% “in connection with the development of communication networks” (see “Kommersant” dated October 29, 2021). However, according to data on the portal, where the project was also posted, the document was never adopted.

Prices have not changed since 2019 and indexation is carried out taking into account reasonable costs and prevailing economic factors, Rostelecom explains. In this case, we are talking about indexing by 10% the cost of traffic transmission services at the zonal level for operators connecting to the Rostelecom network as part of inter-operator interaction under relevant agreements, the company says. Rostelecom’s revenue for the first half of 2023 increased by 15% compared to the first half of 2022, to RUB 324.5 billion. Net profit for the half-year increased by 18.1% year-on-year, amounting to RUB 26.9 billion.

The new tariffs will come into force within ten days from the date of publication of the order after its registration with the Ministry of Justice, the Ministry of Digital Development clarifies, that is, no earlier than the second half of January 2024. The ministry claims that tariffs for subscribers of Rostelecom and other operators will not change.

MTS responded that they were “assessing the possible impact of the price increase on its own costs and the impact on subscribers.” At the same time, the operator acknowledges the rising cost of infrastructure maintenance costs: “MTS has sufficient resources of its own backbone networks and will, if possible, optimize costs by using its capacities.” MegaFon declined to comment; VimpelCom and Tele2 did not respond to Kommersant.

The increase in Rostelecom’s tariffs is associated not only with inflation, but also with the company’s rising costs for equipment and labor, says MForum analyst Alexey Boyko. Kommersant’s interlocutor on the telecom market explains that due to the increase in tariffs, the cost of transmitting voice traffic will also increase. First, the costs of B2O (the business of the operators themselves) will increase, then the changes will affect the cost of final consumer services, he explains. According to his assessment, we should expect an increase in final tariffs within the framework of inflation, but up to 10%.

Tatiana Isakova