Russia searches for LTE partners

Last week, Russia addressed fears that auction delays and disputes would make it a 4G laggard, when its four main operators agreed to offer services running on Yota's wholesale WiMAX/LTE network. Now the country is looking to accelerate its efforts further by creating a joint venture with its key equipment suppliers.
 
The move could be a major coup for Huawei and Samsung, the main suppliers to Yota. Russia has complex rules insisting on levels of procurement of equipment from local manufacturers, but has a very small telecoms equipment industry of its own. Creating a formal venture could simplify LTE procurement and ensure Russian carriers have access to advanced platforms - not just for Yota but for future LTE build-outs, which the cellcos are expected to make once 2.6GHz auctions are held.
 
According to Dow Jones, Russian state-owned conglomerate Rostekhnologii plans to approach Yota's two suppliers first, but also to talk to other interested parties about local production of LTE kit in tandem with one of its subsidiaries, manufacturer Ruselectronics, which has 80 factories.
 
"We will talk to Samsung, Huawei and other companies on a potential joint venture that would produce the equipment for 4G networks in Russia," said the firm's chief Sergei Chemezov in an interview. He indicated that the Russian giant would put up half the financing.
 
Yota (the brand used by Scartel) is itself 25% owned by Rostekhnologii. It originally built a WiMAX network in the main cities, offering retail and wholesale services, and has recently been adding LTE in both TDD and FDD modes, despite issues created by its complex spectrum holdings and the rules attached to them. It now plans to invest $2 billion (€1.4 billion) in expanding its system, which will be used on a wholesale basis by the three national cellcos - MTS, VimpelCom and MegaFon - plus wireline giant Rostelecom.
 
A deal could benefit Russia's domestic industry as well as Yota. The expertise and funding from the deal could be used to modernize Ruselectronics' plants and eventually enable the JV to export equipment outside Russia.
 

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