Wide-partner access to the Internet – Newspaper Kommersant No. 226 (7427) dated 12/06/2022

Large operators of fixed Internet access have returned to the partnership model for launching services based on networks of local providers in the regions. In particular, this year MTS entered 15 new regions by launching the provision of services on the networks of local operators. In 2023, MegaFon plans to enter 20 new regions in this way. The model does not guarantee the growth of the subscriber base due to the different quality of services from different partners, market participants say, but given the shortage of foreign telecom equipment, it will allow operators to reduce costs.

MTS launched a broadband network in 15 new regions in 2022, the company told Kommersant. MTS launched its own network in the capital of Yakutia, Bashkiria and the Amur Region, in other regions the operator earned in partnership with local providers. One of the partners of MTS was TransTeleCom (TTK), on the network of which the company launched FVNO (Fixed Virtual Network Operator) in the Khabarovsk Territory. Until the end of 2022, it is planned to launch similar projects in two more regions, in another eighteen MTS is negotiating with local providers, the company adds.

MTS announced the development of a partnership format with regional operators in August (see Kommersant dated August 4). MTS is in second place among fixed-line providers in Russia (4.3 million households) after Rostelecom, whose subscriber base in the second quarter was 12.2 million connections, was previously estimated by TMT Consulting. In third place is ER-Telecom (3.8 million connections), and in fourth place is VimpelCom (2.9 million). In total, according to TMT Consulting, in the second quarter of 2022, the number of broadband subscribers in the private segment in Russia amounted to 34.9 million, penetration – 61%, and the market volume in monetary terms – 38.5 billion rubles.

If we talk about the format of partnerships with regional operators, then VimpelCom has already used this, which launched FVNO on TTK networks, says TMT Consulting analyst Irina Yakimenko. In 2019, VimpelCom agreed to enter some areas of Krasnoyarsk, Rostov-on-Don, Nizhny Novgorod and two cities of the Nizhny Novgorod region using this model.

Previously, such partnerships were not effective for telecom operators in terms of increasing the subscriber base, says the interlocutor of Kommersant in the telecom market. As a rule, the operator pays the local partner a fixed fee for each new subscriber, and in order to prevent poaching, a fine is introduced, while the quality of communication networks varies between local providers, so MTS or VimpelCom operating on their networks cannot guarantee the same level of services to everyone subscribers, explains the source of Kommersant.

In MegaFon, Kommersant was told that they were negotiating with a number of local providers to expand the geography of FVNO projects: “We plan to launch the network in 20 new regions next year.” In Rostelecom, Kommersant said that they would continue to invest in the expansion and modernization of networks in the regions, as well as in the development of customer service. VimpelCom and ER-Telecom declined to comment.

This year, fixed-line Internet providers have faced problems with access to foreign equipment: due to sanctions, many vendors have stopped deliveries to Russia. In this regard, a number of providers asked the government to allocate more than 11 billion rubles. for the development and production of equipment for fixed communication networks. In general, the replacement of profile solutions from Huawei, Cisco, Mikrotik will require 31.5 billion rubles. (see Kommersant of November 30). One of Kommersant’s interlocutors in the telecom market says that now supplies of broadband access equipment are coming from China. A source close to MTS explains that these purchases are still under contracts concluded until 2022. In the current conditions of equipment shortage, the launch of FVNO projects may be more justified than a few years ago, the source of Kommersant in one of the telecom operators believes.

Despite the fact that the Russian broadband access market is already saturated, operators still have growth potential depending on the region and the specific city, Irina Yakimenko believes: “In large cities with high-rise buildings, penetration is 80% and sector and suburbs of large cities.

Julia Silence