Agreement paves the way 4G
Rostelecom, MTS, VimpelCom, Megafon and the state corporation Russian Technologies have signed an agreement to set up a joint venture to develop 4G networks with Yota. The terms of the deal give the four operators scope to use the 4G LTE (long-term evolution) wireless communications network the Yota group is building. Yota director general Denis Sverdlov said the agreement has two provisions.
“The first provides for the largest mobile network operators using the 4G network as early as now, while the second gives them the opportunity to purchase stakes in Yota at market prices. The investments in the building of 4G networks are estimated at $2billion. The Company will be granted a $2 billion loan before 2014.”
Currently, Yota is 25% owned by Russian Technologies, and the other 75% of shares are held by private investors. If the stock option is exercised, the four operators and Russian Technologies will each get 20% of the Yota stock.
Prime Minister Vladimir Putin, who attended the signing ceremony, hailed the move saying that it will make service more affordable for users
"A positive decision has been made, which will facilitate development, because the more affordable the service is, the more opportunities the end consumers will have. I hope that the idea will materialize" .
Currently, Yota is the only company with a licence to develop the 4G mobile network in Russia and give the others commercial access to it. Igor Schegolev, Minister of Communications and Mass Media, noted that the major focus is to reduce costs through high technology integration.
“All five venture participants will have equal share-each will have 20%. Each will decrease its expenditure on building networks by several times, and thus will be able to invest more for their expansion, and, ultimately, they will carry lower operation costs. This is the basic idea. They will be competing rather in better and rationalized in price service than in infrastructural expansion” .
Rostekhonologii chief Sergei Chemezov said the state corporation plans to produce 4G network equipment in the future.
"The appearance of this network in small towns will help provide services to its residents on short notice, and any technologies can be used at school and libraries," quality and affordable Internet connections will be available in various places.”