The companies were awarded frequencies in the 791-862 MHz range, with bids submitted by eight companies, including two subsidiaries of Swedish telecoms firm Tele2. State-run telecoms giant Rostelecom won the frequency range of 791-798.5/832-839.5 MHz, MTS won 798.5-806/839.5-847 MHz, MegaFon won 806-813.5/847-854.5 MHz and VimpelCom got 813.5-821/854.50862 MHz.
The auction winners will also receive frequencies in the 2.5-2.69 GHz bandwidth.
Unlike many global operators, the winners of Russia’s LTE tender will not pay to acquire their licenses but must commit to investing at least 15 billion rubles ($457 million) annually until 2019 in network rollout.
For MegaFon, whose billionaire owner, Alisher Usmanov, is combining his stake with state-backed 4G operator Scartel, the additional frequencies were a big win. MegaFon and Scartel (Yota) already jointly control more than 50 percent of the 2.6 GHz band. MegaFon launched LTE in Moscow in May using Scartel’s network (called Yota), and Rostelecom plans to do so in September under an infrastructure-sharing contract with Scartel.
The ‘Big Three’ mobile groups and Rostelecom beat out Nordic telecoms operator Tele2, a telecoms unit of Russian Railways, and Summa Telecom.
The Russian Federation has 225.8 million mobile subscribers in total, or a 156% penetration rate (March 2012). Russia’s three largest mobile operators all lost subscriber connections in Q1 2012, as the country’s mobile penetration rate topped 160 percent. Market-leader MTS was down 570,000, second-placed MegaFon was down 1,000, and third-placed VimpelCom was down 1.6 million. These three operators account for 83 percent of the Russian market.
The Russian government awarded four 2×7.5MHz blocks of frequencies covering the entire Russian territory. Paired blocks will be limited to one operator apiece. The tender awarded extra ‘points’ to bidders which agree to open their networks up to mobile virtual network operators (MVNOs). The operators are obliged to start providing services no later than June 1, 2013.
Related Dailywireless articles include; Russian Billionaire Consolidates LTE Spectrum, Yota Switches to LTE – Overnight , Joint LTE Network in UK Planned by Vodafone and Telefónica, Yota Plans Overnight Swap from WiMAX to LTE, Europe’s Digital Divide Auction, Yota Dumps WiMAX