Telecommunications reform in Russia could leave 27 regions without local providers
The reform of telecommunications operator licensing proposed by the Russian Ministry of Digital Development could lead to the disappearance of local internet service providers in 27 regions of Russia. This was stated by Alexei Leontyev, director of the Association of Telecommunications Operators, during a roundtable discussion on changes to the legislation.
The Ministry of Digital Development plans to reduce the number of licenses for telecommunications services from the current 17 to three—basic, universal, and general. Depending on the type of license, the cost will range from 1 to 50 million rubles. The ministry also intends to impose new requirements on operators regarding minimum authorized capital and the extent of regional coverage provided by their own infrastructure.
Currently, there are about 4,700 operators in Russia, not including large federal companies and their subsidiaries. According to Leontiev’s assessment, the new requirements will primarily affect small businesses: 21% of operators have annual revenue of less than 100 million rubles, and 36% have less than 200 million.
At the same time, regional companies account for about 45% of the broadband Internet access market in Russia. Oleg Grishchenko, chairman of the Rostelecom Association, noted that the “new regions” of the Russian Federation—the temporarily occupied territories of Ukraine—are particularly at risk, as a significant portion of services there is provided by local providers.
Problems may also arise in small towns, where the development of telecommunications infrastructure is primarily handled by local entrepreneurs. Once the requirements are tightened, they may fail to meet the new criteria and exit the market.
Experts also warn of significant costs associated with reconnecting subscribers in the event of a mass exodus of small operators. According to Leontyev’s estimate, such costs could reach hundreds of billions of rubles. He believes that these costs will have to be covered by the state budget, since large Russian operators already carry a significant debt burden.
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