Russian mobile calls, internet seen deteriorating after Nokia, Ericsson leave
STOCKHOLM/MOSCOW, Dec 21 (Reuters) – When telecom equipment makers Nokia ( NOKIA.HE ) and Ericsson ( ERICb.ST ) leave Russia at the end of the year, their departure could gradually cripple the country’s mobile networks over the long term. , causing a breakdown in communication for everyday Russians.
Five senior telecommunications executives and other industry sources said Russian cellphone users are likely to experience slower downloads and uploads, more dropped calls, calls that won’t connect and longer outages as operators lose the ability to upgrade or fix software. and the fight against dwindling savings is. parts stock.
Ericsson and Nokia, which together account for a large share of the telecommunications equipment market and nearly 50% in terms of base stations in Russia, make everything from the telecommunications antennas to the hardware that connects optical fibers that carry digital signals.
They also provide important software that enables different parts of the network to function together.
“We are working towards the end of the year and that is when all exemptions (from sanctions) expire,” Ericsson’s chief financial officer, Carl Mellander, told Reuters. Ericsson received exemptions from sanctions from Swedish authorities.
Nokia CEO Pekka Lundmark echoed that sentiment in an interview: “Our exit will be complete. We’re not going to deliver anything to Russia.”
Russia’s economy has so far weathered sanctions and export controls imposed by governments after Moscow sent tens of thousands of troops to Ukraine, but the impending withdrawal of Nokia and Ericsson could have a greater impact on Russian daily life, and eventually something like simple as making a phone call, difficult.
Russia’s digital ministry did not respond to requests for comment, but this week Communications and Mass Media Minister Maksut Shadaev said four telecom operators were signing contracts to spend more than 100 billion rubles ($1.45 billion) on Russian-made equipment.
“This will enable us to organize modern production of telecommunications equipment in Russia,” he said without naming the operators or manufacturers.
Russia’s top telecom operator MTS ( MTSS.MM ) declined to comment for this story. Megafon, Veon’s ( VON.AS ) Beeline and Tele 2, the other companies that make up Russia’s Big Four telecommunications firms, did not respond to requests for comment.
Government programs to promote Russian equipment have helped telecoms operators become less dependent on Nokia and Ericsson over the past few years and Russian manufacturers have increased their market share to 25.2% this year from 11.6% in 2021. But the break of ties with foreign firms is expected by industry sources to set Russian communications back a generation as the rest of the world moves forward with the implementation of 5G technology.
“If this situation presumably continues for years, Russian cellular networks in terms of coverage may return to the state of the late 1990s, when their coverage was limited to large cities and the richest suburbs,” says Leonid Konik, who manages the IT. publication ComNews in Moscow.
Rural areas will only begin to degrade as operators remove equipment to strengthen urban networks, the telecommunications experts said, while a lack of software updates could lead to network outages or expose them to cyber attacks.
Chinese telecommunications equipment maker Huawei, the biggest supplier in Russia last year with more than a third of the market, will continue to provide software updates and continue maintenance work but has stopped selling new equipment in Russia, according to sources familiar with the matter.
SOFTWARE UPGRADE ENDED
The biggest hurdle for mobile operators to keep their networks running will be a lack of software upgrades – Nokia and Ericsson have said they will cut software updates by next year – and fixes, the sources said.
Software unifies a series of equipment that make up a telecommunications network, converting analog and digital signals; monitor and optimize network traffic; and protect infrastructure from cyber attacks.
While mobile operators can stockpile hardware parts for future use, they rely on a regular schedule of licensed software updates and patches to maintain the integrity of a network.
“Undoubtedly, software patches are extremely important to ensure that networks remain operational, secure and reliable,” said Paolo Pescatore, an analyst at PP Foresight.
Russian telecom operators stockpiled foreign-made parts in February and March before sanctions, two of the industry sources said, but stocks will drop after Nokia and Ericsson pulled the plug on Dec. 31.
Government-ordered consolidation among Russian operators could also allow them to share equipment and resources to make the networks last longer, industry sources added.
Huawei [RIC:RIC:HWT.UL], which stopped selling new equipment in Russia when the United States began sanctioning Russia, also stopped selling its smartphones in the country, according to three sources familiar with the matter. Huawei has not publicly disclosed its status in Russia and declined to comment.
Reporting by Supantha Mukherjee in Stockholm and Alexander Marrow in Moscow; Editing by Kenneth Li and Chris Sanders
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