Shared and wholesale networks will be a hallmark of 4G business models, as seen in the US with Clearwire and LightSquared.
Eventually, many countries will have only one or two networks serving multiple traditional and non-traditional wireless service providers. Russia has taken a big step in that direction with plans for 4G start-up operator Yota to support all four main cellcos with its LTE system.
Yota - the brand name for Scartel - started life as a flagship Wimax carrier but last year started to add LTE to its mix. It has a complex set of spectrum holdings, with byzantine rules attached to them, but is likely to end up with a mixture of TDD and FDD networks, with a significant amount of capacity in many markets and almost national coverage.
The main wireless carriers, which are still fighting over terms of the upcoming 2.6GHz auction, aim to tap into this goldmine.
Established cellcos MegaFon, MTS and VimpelCom, plus the growing mobile arm of wireline incumbent Rostelecom, will use Yota's network to provide new services to 180 cities (with a total population of more than 70 million citizens) by 2014.
This transforms the economics and timescales for bringing LTE to Russia - it had been feared that auction delays and rows over rules could put that back until late in the decade, while Yota as a standalone business lacked the scale to create a truly national service.
Now, as its statement suggests: “The deal will see Yota become the 4G network provider for the Russian telecoms market. Businesses will avoid costly duplication of infrastructure investment and millions of Russian consumers will benefit from faster access to 4G services and lower prices.”
The four mobile operators have the option to buy equal stakes (reported to be 20%) in Yota after 2014.
Yota's director of business development, Yegor Ivanov, painted the future recently in an interview with Mobile Business Briefing. “To expand really fast we can't continue in this way,” he said.
“We don't want to have a telco legacy - ideally we want to partner with companies... a franchising model is what we want.”
Yota CEO Dennis Sverdlov said in a statement: “This deal is an endorsement of our vision for the future of the telecoms industry. We firmly believe in the separation of network ownership and service provision and believe that this ground breaking agreement will drive innovation and benefit Russian consumers.
“Even more importantly, we believe that Yota can help all operators across the world to take advantage of the massive opportunity that 4G brings.”
Original Article URL:
Yota to power 4G for all four Russian cellcos