The Russian Federation May Revoke Internet Service Providers’ Licenses on a Large Scale
Russia is preparing a large-scale reform of the telecommunications market that could lead to the mass revocation of providers’ licenses. If the licenses are revoked, their networks and other assets may be transferred to federal telecommunications operators.
Under the proposed reform, if a license is revoked, providers will be required to enter into agreements with federal telecom operators.
Such agreements will grant large companies priority rights to purchase the networks.
For operators with more than 3,000 subscribers, the plan also calls for imposing liability if they cease providing services and refuse to enter into the relevant agreements.
At the same time, operators will be eligible for compensation for economically justified expenses.
Currently, the five largest providers account for approximately 70% of broadband internet subscribers in the B2C segment. At the same time, a significant portion of regional networks is controlled by small independent operators.
The Ministry of Digital Transformation’s reform calls for a transition from the current nearly 20 types of licenses to three levels:
- basic;
- universal;
- general.
The universal license will apply to broadband Internet access providers. To obtain it, companies will need to have at least 30 million rubles in equity capital.
A general license will allow an operator to provide telecommunications services throughout Russia. To obtain it, an operator must have telecommunications nodes in two-thirds of the regions and in every municipality, as well as at least 100 million rubles in equity capital.
According to the Rostelecom Network Association, approximately 33.2% of Russian providers do not meet the requirements regarding the amount of equity capital.
A separate requirement will be the mandatory connection of operators to the system for operational-investigative measures (SORM).
It is expected that, starting in early 2028, operators will be able to operate in the Russian telecommunications market only under the new rules. If an operator fails to meet the established requirements, its license will be revoked.
The Russian Ministry of Digital Development states that the reform is intended to ensure that only “reliable companies” capable of investing in network modernization and maintaining adequate service quality remain in the market.
Representatives of independent providers oppose the provision granting federal operators the right of first refusal to purchase networks.
The Association of Small Regional Telecommunications Operators (AMOR) believes that the proposed mechanism could turn the licensing reform into a tool for redistributing other companies’ assets and customer bases.
According to industry representatives, a reduction in the number of independent providers could increase market concentration and lead to higher service prices.
Dmitry Petrov, CEO of the operator “Comfortel,” stated that if the changes are adopted in their current form, the cost of telecommunications services could rise two to three times faster than the inflation rate.
Thus, the proposed reform could significantly alter the Russian internet and telecommunications market: small independent providers risk losing their licenses, and their networks and subscriber bases could come under the control of large federal operators.
This was announced by the Russian Ministry of Digital Development.
On August 6, a large-scale internet outage was reported across Russia. Users are reporting problems accessing services provided by Rostelecom, Yandex, banking platforms, and other online services. The causes of the outage have not yet been disclosed.
Russian state-run propaganda media outlets have begun receiving special tools from the government to bypass internet restrictions and access the so-called “external internet.” This was reported by a Russian publication whose journalists analyzed correspondence from Bella Cherkesova, Deputy Minister of Digital Development of the Russian Federation, which became available following a leak published by the hacker group Black8Mirror.
