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17 Jul, 2013 13:45

Skype allowed to operate in Russia without a license

Skype allowed to operate in Russia without a license

Russian government's telecom watchdog agency has given Skype the green light to continue operating in Russia without a license, after rejecting an appeal from mobile operator MTS.

Mobile operators in Russia have complained about Skype’s presence in the Russian market, as it cuts traditional carrier revenue and eats up bandwidth.

Roskomnadzor, Russia’s federal communication agency has deemed it ‘impossible’ to supervise Skype’s activities under Russian law since the company is registered in Luxembourg, and cannot mandate it comply with Russian licensing laws, Vedomosti reported.

The Deputy Head of Roskomnadzor Olge Ivanov explained the decision in a letter written to Russian’s telecom giant MTS (Mobile TeleSystems) that there isn’t a ‘legal basis’ for Skype within Russian territory, as the law can only cover service providers in the Russian Federation.

Setting up an affiliate or representative office in Russia wouldn’t help Skype circumvent the law, because according to Ivanov, it still wouldn’t be able to siphon legislation from  the federal agency, because it is absent from the commission’s 2005 approved list of communication services. 

Skype is a ‘parasite’

Russian internet providers complain Skype is a ‘parasite’ to the telecom industry because it ‘eats up bandwidth’ without paying service providers.

Valery Ermakov, first deputy general director of MegaFon delivered these poignant words in 2009 at a meeting with the federal telecoms regulator, which stoked fear Skype may be crowded out of Russia by state telecoms companies.

Russia is home to Europe’s largest telecoms market in Europe and is still heavily dominated by the voice services market. However, broadband service expansion has been a large contributing factor to mobile operator investment, and banning Skype would deter further investment.

MTS, the country’s largest mobile-phone company, saw data traffic triple in the past year and as the market rapidly expands. Not all the traffic is MTS users, only 31 percent.

An MTS (Mobile TeleSystems) mobile operator office (RIA Novosti/Iliya Pitalev)

Advanced Communications & Media Consulting conducted a survey in 2013 which showed that about 18 percent of Russian mobile subscribers use Skype.

MegaFon reported a total of 130,000 LTE subscriptions at the end of 2012, following its merger with Yota, and by the end of 2013 hopes to hit 1 million subscribers.

On this disparity, MTS Vice President Ruslan Ibragimov sent a letter to Roskomnadzor to bring attention to the matter, and discuss how to improve signal strength delivery.

Russian telecom companies argue Skype has invested next to nothing in the telecoms infrastructure, but runs and profits off the foundation their companies built.

Traditional operators are losing revenue to competition from Skype’s free audio and video services, especially in competition with long-distance and international calls.

Middle ground could be reached by Skype and internet service providers if Skype would agree to subsidize construction and operation projects in Russia, MTS believes.

Personal Data

Western internet companies and the Russian government also diverge on the principles of personal data protection. The Kremlin will soon be checking up on all western companies to see if they are operating in line with Russian law, the head of the Federation Commission Ruslan Gattarov, told reporters on Wednesday.

The committee will check the user agreements of Western internet companies. “We will begin with Twitter, then Facebook, and Yahoo,” said Gattarov.

Gattorov has long been a proponent of a single system controlling all web resources in Russia, because it helps the government catch hackers, cyber terrorists, and dissidents.

Leading internet search engine Google has refused to agree to Roskomandzor’s requirements to hand over personal information on Russian citizens.

Since November, the Russian telecoms watchdog has had the power to block websites or providers with unsuitable content- whether illegal, vulgar, or not appropriate for children. 180 sites have been blocked within the territory.