Megafon signed a forward contract with the Yadro group of companies for the supply of domestic base stations (BS) GSM (2G) and LTE (4G), a source close to one of the Russian operators told Vedomosti. Representatives of MegaFon and Yadro (KNS Group) confirmed to Vedomosti that the forward contract had been concluded. The details of the agreement were not disclosed by the parties.
Earlier, the signing of a forward contract between Rostelecom and Yadro was announced by the operator’s president, Mikhail Oseevsky. The parties did not give exact figures on the number of stations and amounts, but Oseevsky mentioned that we are talking about “tens of billions of rubles.” Deliveries of “carrier-class radio access equipment” will begin in 2025 with intermediate stages of testing a line of products being created, a Yadro representative told Vedomosti.
As a representative of Rostelecom specified, the agreement is valid until the end of 2030 and assumes that the developer (Yadro) will create and implement on the networks of the BS operator, taking into account its technical requirements. “The base station equipment is planned to be used in the implementation of federal tasks with state funding, for example, in the project to bridge the digital divide (UTC), as well as for use on commercial networks,” Rostelecom said in a statement.
According to the UCN project, 24,000 2G / 4G BSs should be installed by 2030 (in 2,000 settlements for 100-500 people), the operator’s representative added. But he did not comment on how many Yadro production stations under the UCN project will be installed.
The issue of the transition of operators to Russian LTE BS is included in the agenda of the December meeting of the State Commission on Radio Frequencies (SCRF), Vedomosti wrote. Operators are proposed to be divided into two groups: those that should use only domestic equipment in the construction of LTE networks from 2028, and those that will have to do the same from 2023, the agenda indicated. The first group will include those who, by the end of 2022, will conclude forward contracts for the production of domestic base stations, an interlocutor close to the State Committee for Radio Frequencies explained.
A Vimpelcom representative said that the company is negotiating with several forward partners, but it is premature to talk about the timing of signing “solid contracts”. Earlier, a source close to the operator said that the operator is also in the final stages of agreements with Yadro. MTS declined to comment.
“The Ministry of Digital Development supports the conclusion of forward contracts between operators and Russian BS manufacturers. Such contracts allow manufacturers to use all production capacities, and also create a guaranteed demand for products,” a representative of the department told Vedomosti. The Ministry of Digital Development expects that by the end of the year all Big Four operators will conclude such contracts.
If we are talking about the amount of 30-50 billion rubles. in each of the contracts, then, most likely, initially Megafon and Rostelecom will receive 10,000 GSM / LTE BS, controllers and software from Yadro, suggests Denis Kuskov, CEO of Telecom Daily. Two more Vedomosti sources close to the operators speak of the same volume. “It is important to understand that we are talking not only about BS, but also about controllers (devices that coordinate the work of stations with each other. – Vedomosti) and network management software,” says one of them. According to the interlocutor, one controller costs the same as a BS, and can serve up to 100 BS outside the city and about 10–20 BS in dense urban areas, while network management software costs up to 30% of the price of one BS.
How many base stations do you need
In 2021, cellular operators launched 82,000 BSs. MTS was the leader in terms of the total number of stations – more than 223,000 BS, the second was Tele2, which has almost 206,000 stations registered. They are followed by Megafon (204,000) and Beeline (177,000).
Operators need several tens of thousands of BS annually, says MForum agency analyst Alexei Boyko. According to the Megabitus service, companies are already experiencing a slight decrease in network speed (1-2 Mbps). Therefore, the current stocks of equipment without modernization, taking into account the growth of traffic by 30% in a year and a half, may not be enough, says Kuskov.
But the main question is how domestic equipment will “get along” with foreign, the expert continues. The term “carrier-class radio access equipment” implies that it must meet the entire scope of the operator’s requirements for it, including including a clause on compatibility with already installed foreign equipment, says Kuskov.
“Most likely, the situation will develop as follows: in some small settlements, the SWAP procedure will be carried out (from the English swap – replacement, modernization of equipment with the transition from one supplier to another. – Vedomosti), i.e. working foreign BS of one vendor will be removed and moved to those regions where the equipment of the same vendor is already located, and new domestic ones will be installed in other regions. The issue of pairing domestic BS with stations from other manufacturers remains open, since it is different for everyone, ”explains Kuskov.
The process of combining all the equipment into one system is likely to be labor-intensive and unpredictable in terms of how it will affect the quality of communication, the expert points out. But Yadro has recently gained expertise and acquired technical specialists from companies that left Russia, they have every opportunity to create high-quality equipment, the analyst points out.
So far, there is no need to talk about competition between Yadro solutions and products from leading foreign vendors, Boyko notes. “At the same time, those companies that enter the market later always have some advantage, since they have already seen successful examples and can build their solution based on someone else’s experience,” he points out. There is no doubt about the possibility of creating a workable domestic solution, but questions remain about competitiveness in the world market, the expert concluded.