Sometimes it helps to be in the right place at the right time. A year ago, few would have thought that Russian WiMAX operator Yota had a bright future. The firm may have been hailed as one of the few genuinely successful WiMAX case studies (at least in terms of subscriber numbers) but it was surely only a matter of time before the big Russian mobile operators migrated to LTE and Yota lost its competitive advantage.

But Yota has since proven to be a nimble player. Aware the industry was turning away from WiMAX, the firm – seemingly overnight – swapped out WiMAX for LTE and by last August had switched on one of the world’s first LTE networks in Russia’s third-largest city, Kazan. The network – comprising 147 base stations and covering a population of one million – cost only US$20 million and was completed in just two months. Too fast for the Russian regulator, in fact, which tried (and seemingly failed) to prevent Yota deploying LTE using spectrum given to it for WiMAX use. Undeterred, Yota announced ambitious plans to invest a further US$100 million rolling out LTE networks to other parts of the country (in addition to new network launches in far-flung markets such as Nicaragua).

By contrast, Yota’s much larger Russian rivals inched forward with their LTE plans with a few trials (ironically, market-leader MegaFon chose Kazan as its test city) but with no sign of any commercial launches.

Which brings us to this week’s announcement that the big three Russian operators (MegaFon, MTS and VimpelCom) and state-owned Rostelecom are to use Yota’s network as the basis for a joint nationwide LTE network covering 180 cities and 70 million citizens. The deal establishes Russia as one of the world’s first major mobile markets to fully embrace network-sharing as a means to quickly and cost-effectively bring LTE to market – but it’s not a bad deal for Yota either, which grandiosely described itself in a statement as the “4G network provider for the Russian telecoms market.” Moreover, under the terms of the agreement, the four Russian operators have the option to each buy a 20 percent stake in Yota after 2014, which will no doubt mean a lucrative payday for Yota’s investors.

The deal is likely to have been in the works for some time. Yota told Mobile Business Briefing back in November that it was looking to build a “franchise” business model for its network; recent developments – such as opening new offices in London and hiring an international PR agency – also hinted at the scale of its ambitions.

Yota has been fortunate with how events have unfolded. However, this is a rare case of an operator acting like a start-up: reacting quickly to changing events and making bold decisions. Fortune favours the brave.

 

Matt Ablott 

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members