Russia's proposed telecom licensing reform could strip 27 regions of local internet providers
A planned overhaul of Russia's telecom licensing system could leave 27 regions without local internet providers, industry representatives warn. Reconnecting affected subscribers could cost the state budget hundreds of billions of rubles.
Russian business outlet RBC reports that a Digital Development Ministry plan to tighten requirements for telecom operators could leave 27 regions without local internet providers. The figure was cited by Aleksei Leontyev, director of the Association of Telecommunications Operators (ASTO), at a roundtable discussing the proposed legislative amendments.
In April, the ministry proposed replacing Russia's current 17 telecom licenses with just three categories — basic, universal, and general. Depending on the license type, costs would range from one million to 50 million rubles. The ministry also intends to introduce new requirements for companies' minimum authorized capital and for how broadly their communications infrastructure must cover their regions.
Russia currently has around 4,700 telecom operators, not counting major federal companies and their subsidiaries. According to Frank Media, only operators with revenue above 400 million rubles would be able to meet the proposed requirements.
Leontyev said smaller operators would be hit hardest: by his estimate, 21% of operators earn less than 100 million rubles in revenue, and 36% earn less than 200 million rubles. Regional operators together account for 45% of Russia's broadband internet market.
Oleg Grishchenko, head of the Rosteleset association, said the reform would also hurt Russia's so-called "new regions" — the occupied Ukrainian territories, where mostly local providers operate — as well as small towns, where telecom services are typically built by local entrepreneurs with modest revenues.
Experts note that the reform itself would require significant spending to reconnect affected subscribers, funding that would likely have to come from the state budget since Russia's largest operators are already heavily indebted. Leontyev estimated the total cost could reach "hundreds of billions of rubles."
The Digital Development Ministry says the new measures are meant to improve the quality and availability of communications services by leaving only "reliable" operators in the market. The ministry stressed that no final decisions have been made and that the initiative is still being discussed with businesses.
