Customs Union Hits Russian Telecom Providers

Russian mobile telecom providers are unable to bring their newly purchased equipment to Russia because of the licensing issues that emerged with the recent creation of the customs union between Russia, Belarus, and Kazakhstan. According to the agreement, import of complex telecommunications equipment from a third country requires authorization by a state institution – a concept the agreement has failed to define. According to the Russian Vedomosti, this problem can delay introduction of 3G mobile technologies in Russia.

So far the customs union has mainly had either zero, or a negative effect. Belarusian automobile import duties are rising to the Russian levels to support Russia’s inefficient automobile industry. Сlear conditions for Russial oil imports to Belarus have not yet been defined despite the two countries’ claiming to be in a union. Now the Russian telecom operators are in trouble because of the poorly prepared customs union documents. It would have been funny, had it not been so sad.

Starting January 1, following Russia’s entry into a customs union with Belarus and Kazakhstan, Russia’s telecom operators can not bring new equipment into the country. In particular, the Russian customs stopped the order of 2-5% of equipment that Megafon was going to bring to Russia in 2010, 25-28% of the company’s total deliveried to the, the company’s press service told Vedomosti. According to Megafon, this applies to both network equipment for 3G, and for 2.5G base stations as well as equipment for the construction of linear fiber optic communications.

Read the original story in Vedomosti

MTS, VimpelCom and MegaFon can not import equipment for the construction of cellular networks of the third generation (3G) into Russia. Rules of the Customs Union with Belarus and Kazakhstan from January 1, require that importers of base stations should be licensed, whereas the procedure of licensing has not yet been determined. For having received frequencies for 3G, operators are required to launch operation of most of the networks by June 2010. If they fail to do it, they may lose frequencies.

Read the original story at Kommersant

Alexander Čajčyc is a PhD candidate at the Financial University under the Government of the Russian Federation in Moscow.

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