Russia’s Ministry of Communications and Mass Media has proposed a plan in which the 4G frequencies granted to mobile operators should be returned and used to create a state-owned LTE network, according to reports.
The licences were awarded to MTS, VimpelCom (Beeline), MegaFon and Rostelecom a year ago after a tender conducted by Roskomnadzor, the Federal Service for Supervision in Telecommunications, Information Technology and Mass Communications.
The winning operators were required to start offering the services by 1 June 2013, with the networks fully operational by 2019. Operators holding the 4G licences were also required to invest RUB15 billion ($480 million) per year to develop their networks.
However, Kommersant reports, ministry officials deemed that the efforts made by operators to introduce LTE have been insufficient as they have focused on large cities rather than closing the digital gap across regions.
The ministry has therefore sent a proposal to the presidential administration to withdraw the privileges granted to the operators and to instead favour a single LTE operator, which operators would have access to.
The new infrastructure will take two years to build and require at least 30,000 base stations at a cost of RUB60 billion.
The proposal requires a state-run operator to have access to frequency bands of 720-750MHz and 761-862MHz along with the 390-470MHz and 694-876MHz bands that are available now or at a later date. The operators would be allowed to keep frequency bands in the 2,500-2,700MHz range.
The operators have opposed the proposal, and industry experts suggest withdrawing operators’ rights to the LTE spectrum will require a court decision.
In documents seen by Vedomosti, the ministry acknowledged that operators would receive compensation if the plan goes ahead.
The proposed LTE company would be funded by a combination of operator spectrum charges and allocations from the universal communications reserve fund which collects 1.2 per cent of annual operator revenue as tax.