Operators pull billions out of the sewers

In 2020, MGTS’s revenues (revenue minus expenses for pre-sale preparation) from the sale of recyclable materials amounted to just over 2 billion rubles, follows from the published report of the company. And in 2019, similar revenues were even higher – 2.7 billion rubles. This is equipment from 37 outdated analogue telephone exchanges turned off last year.

“Among the recyclable materials sold, there is paper, and much more, but the main cost falls on old copper cables, as well as lead braid,” notes a person familiar with the managers of the mobile operator MTS, which controls MGTS.

Based on the data that in their reports for 2015–2020. cites MGTS, the company managed to earn a little more than 10 billion rubles from recycling, says Denis Kuskov, CEO of Telecom Daily.

“The copper infrastructure has been preserved mainly only as an intra-house network for subscribers who are still connecting via old lines. Due to the constant decrease in the number of such customers, MGTS has been gradually freeing the infrastructure from outdated communication lines since 2015, ”notes Alexey Merkutov, an official representative of MTS.

Copper lines are still used in some government agencies, where, according to security standards, copper lines should be used, an employee of one of the telephone companies notes. The fact is that optical communication equipment does not work during a power outage – and analog copper lines work, since they have an autonomous power supply.

MGTS’s revenue at the end of 2020 is just over 40 billion rubles, follows from its report. That is, the sale of old cables accounts for about 5% of revenues. At the same time, as follows from the materials of MGTS, last year the company earned a little less than 1.3 billion rubles on Pay TV services, and 296.6 million rubles on video surveillance.

MGTS revenues from the provision of broadband Internet access, television, mobile communications, new digital services at the end of 2020 amounted to about 26 billion rubles. – It is incorrect to compare them with revenues from the sale of recyclable materials, assures Merkutov.

A large-scale network digitalization program launched by MGTS in the early 2010s allowed freeing up a huge amount of copper infrastructure, Kuskov notes. The budget of the campaign for the transfer of Moscow telephone and Internet subscribers to GPON technology (Gigabit Passive Optical Network, involves laying fiber to each apartment) was about 50 billion rubles, MGTS managers said earlier.

MGTS, according to the company itself, serves about 3.3 million private clients. The operator does not disclose the number of GPON users. 70-75% of the company’s subscribers are connected using this technology, says a person familiar with the managers of several Moscow operators.

“Last year, 200,000 customers switched from copper to an optical network and chose a package of modern services, including home Internet at speeds of 200 Mbps,” says Merkutov. “The increase in the number of subscribers connected via optics and the demand for services allow for the second year in a row to completely cover the drop in revenue from the provision of fixed voice services due to broadband Internet access, television, etc.”.

The largest telephone company in Russia serving fixed lines is Rostelecom with 14 million fixed-line subscribers at the end of 2020. Last year, the number of users connected via copper wires decreased by almost 10%, the company reported earlier.

“Today the ratio of customers connected via optical channels and copper wires is about 80% to 20% in favor of optics. And this gap is widening, “- said a representative of Rostelecom. True, as follows from the statements of Rostelecom, we are talking about Internet connections, and not about telephone communications.

The operator also makes money by scrapping old cables. In 2018, Rostelecom launched a program for cleaning cable ducts from old copper wires – contractors could buy the extracted raw materials at a discount. The operator hoped to bail out up to 2 billion rubles through this scheme. In 2019, due to the construction of optical lines, Rostelecom decommissioned 13,400 km of copper cables – the sale of this recyclable material, along with the sale of obsolete PBX equipment, brought the company 1.7 billion rubles, follows from its materials. Rostelecom does not disclose data for 2020 – as well as the number of GPON users.

The fact that Rostelecom, which operates throughout Russia, earns less from selling copper cable waste than MGTS, which operates in Moscow and the Moscow region, is not surprising, Kuskov said. It is still faster and cheaper to digitize the network in a single, even if a large city, than to implement such a project throughout Russia, he notes: “In the regions where Rostelecom operates, copper cable is often used for telephone communications, in particular , it is used in telephone networks of small towns and villages ”. Often, the transfer of such networks to optics is obviously ineffective. It is sometimes unreasonable to lay optics for telephoning certain objects, the expert adds: “Therefore, Rostelecom sells less unused copper cables.”

According to Kuskov, “deposits” of non-ferrous metals will be enough for the largest Russian telephone operators until the mid-2020s: “As new technologies develop, copper cable that can be dismantled and sold will simply disappear from the cable duct.”



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