IT in the Russian Federation

Russia: Telecommunication Regulation & Liberalization

Overview

Until 1993, the Russian telecommunication network was fully controlled by the Russian Ministry of Communications.  That year, local network operators were privatized so that each of the 85 regions had one provider.  Rostelecom became the single national network operator. (32)

 In 1995 the Russian government consolidated its stakes in the regional companies into a national holding company, Svyazinvest.   The government tried to start the privatization process in 1997 through the sale of 25% interest in Svyazinvest to a Cyprus-based consortium, Mustcom.  They had planned to sell a second interest of 25% but it was delayed because of the 1998 economic crisis. (32)

 In 2002, the industry was reorganized and seven new interregional companies were formed, but their market capitalization is small by international standards.  The proclaimed goal of the reorganization is to centralize cash flows and increase operations efficiency in the industry. (33)

 Until 2010, the Russian government insists on retaining the monopoly of Rostelecom for long distance services.  WTO specialists have criticized this plan, stating that “delays in the liberalization of service provision may slow the development of the commercial data transmission infrastructure, casuing problems for the development of the Russian economy as a whole.”(33)

 Table of Russian Infrastructure Status

Infrastructure

Liberalization Status

Comments

Public Telecommunications Network

Monopoly

Russian Law on Communications

Local Networks for Voice Telephony

Partially Liberalizes Market

Russian Law on Communications

Leased Lines

Partially Liberalized Market

Russian Law on Communications

Alternative Infrastructure (railways, utilities, highways, etc.)

N/A

N/A

Broadcasting and cable TV

Partially Liberalized Market

N/A

 

 

 

Voice Telephony

 

 

Local Communication

Partially Liberalized Market

Russian Law on Communications

Domestic Long-Distance

Monopoly

Russian Law on Communications

International Communications

Partially Liberalized Market

Russian Law on Communications

Provision of voice services to closed user groups

Monopoly

Russian Law on Communications

 

 

 

Mobile Communications

 

 

Analog

N/A

N/A

GSM Digital

Partially Liberalized Market

Federal Providers: MTS, Vympelcom, and Megaphon

Paging

Partially Liberalized Market

More than 450 licenses (28)

Satellite Communications

Partially Liberalized Market

Russian Satellite Communications Company (Gorizont and Express

 

 

 

Data Transmissions

Fully Liberalized Market

TCP/IP

Value Added Services

Fully Liberalized Market

N/A

Internet Service Provision

Fully Liberalized Market

N/A

Equipment Provision

Fully Liberalized Market

Article 16 of the Russian Law on Commercialization

 

 

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