OVERVIEW
 

70 years of Soviet rule was not kind to many sectors of the Russian Federation, telecommunications was no different.  The crumbling fixed line infrastructure, comprised of only 15% digital lines, has been a problem for this burgeoning economy.  Private investment to rebuild has been slow especially in light of the 1997-98 financial crisis and continued corruption within the hierarchy of the Russian Government.
The fire on the state run communications tower in September 2000 was a further testimony of the crumbling communications infrastructure of Russia.  The communications and television stations that relied on this tower as their main transmission platform for the Moscow community were left totally without their network.  Many new private companies have been building their own networks precisely to avoid dependence on such old and decrepit Soviet era technology.  Those who had this vision were left as heroes absorbing the thousands of displaced customers from those who did not.

The teledensity of the Russian Federation is still low compared to Western standards at 19 lines per 100 people.  There is data to support that over 50,000 settlements in Russia have no communications links whatsoever (Chernobrovkina, US Dept. of State, 2000.)  However, there is a renewed commitment to updating their telecommunications.  In 1998, 8000 km of frame relay and 7300 km of cable transmission lines were laid, 12 digital exchanges installed and 50000 new lines added in cities with 100000 new lines in the countryside (Breiter, US Dept. of State, 1999).
 

FIBER OPTICS

Externally, fiber optics have been placed connecting Russia with various countries, such as Denmark, China, Finland, South Korea and Italy.

Internally, the most ambitious plan for optics has been undertaken by a New York based company, Andersen Group, along with its local partner ComCor, which has set out to rewire the entire Moscow metro area with broad band access.   Of course such endeavors are usually set on the capital and most prosperous business districts first, of which Moscow has the distinction of being both.   The result of the work has been 1500 miles of fiber along 3.5 million apartments and businesses (Internet World, Sept.15, 2000).  Although the project still has a long way to go, it shows there are some who are willing to put forth the effort for long-term growth in Russia.

SATELLITE

This year the Russian government has also committed about 250-300m US dollars to upgrade their satellite communications in Russia and the CIS.  Four new satellites will be launched in 2000 with Alcatel relay stations in the Russian Federation carrying the signals over the span of the huge country.
 

WIRELESS

The bright spot has been in the advancement of wireless capabilities since 1992 when modern cellular systems were introduced.  Although no real production of wireless products are evident in Russia today, they are rapidly advancing the implementation of the most up to date networks.  The cellular phone density is believed to be only at .3 per hundred as opposed to the 24 per hundred in the USA (Breiter, US Dept. of State, 1999).  Aggregate figures from Bruswick Warburg estimated the total number of mobile phone users to reach 3 million by the end of this year.  It has also been estimated by The Strategis Group of Washington, DC that total cellular revenue in 1999 was 1 billion and may even reach 9.2 billion by 2007.

Paging services have been approximated at one-half million current subscribers.  Despite these lackluster numbers, a few of the most transparent and well managed companies in Russia today deal in wireless paging and cellular technology.  Vympelcom, half owned by Telenor of Norway, and its main competitor MTS, a partner with Deutche Telecom, have been battling over ownership of the emerging GSM, CDMA, 3G and paging networks in Russia.  Telenor estimated the potential for wireless to be 7.2 billion by 2003 up from 3.6 billion in 1999 with 3G communications networks accounting for an ever increasing share in the upcoming years.   Like many other emerging markets the advantages of backwardness in the fixed line infrastructure have helped spawn the rapid investment in wireless communications networks.  According to the Russian State Telecommunications Committee, in 2000 the estimated aggregate investment for mobile communications may reach 134 million. A large sum compared to most of the economic sectors of today's Russia.  However, problems with unclear and sporadic enforcement and regulation by the Russian state hinder further foreign involvement.  Usually, those who have the highest connections have the contracts and government support.
 
 
 

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