Russia's MTS Knocks 5G as 'Vendor Game'

Russia's biggest mobile operator says rules and business practices will need firming up before 5G can fly.

Iain Morris, International Editor

February 23, 2016

3 Min Read
Russia's MTS Knocks 5G as 'Vendor Game'

BARCELONA -- Mobile World Congress 2016 -- Amid all the hoopla surrounding 5G at this year's Mobile World Congress, a senior executive from MTS, Russia's biggest operator, has expressed skepticism about the emerging technology, indicating that Russian service providers will need to address some major business and regulatory challenges before they can start investing in earnest.

Mobile TeleSystems OJSC (MTS) (NYSE: MBT) threw its hat into the 5G ring in December when it unveiled plans to carry out trials of 5G technology in partnership with Sweden's Ericsson AB (Nasdaq: ERIC) during the 2018 Football World Cup, which Russia is due to host. (See Russia's MTS to Trial 5G in 2018.)

The announcement puts MTS among a small number of service providers globally that are looking to use 5G technologies before standards take shape from 2020 onwards.

Nevertheless, while operators such as US-based AT&T Inc. (NYSE: T) and Verizon Wireless have made some bold statements about their short-term expectations surrounding 5G technologies, MTS sounds much warier. (See Verizon CEO: US Commercial 5G Starts in 2017 and AT&T Lights Fire Under 5G, Plans 2016 Trials.)

"We feel an obligation to be in pole position in the market but as of today we have skepticism about 5G over the next couple of years," said Vasyl Latsanych, the chief marketing officer of MTS, during a conversation with Light Reading on the sidelines of the MWC event. "It is a vendor game rather than a customer or carrier game."

MTS already provides commercial 4G services to its Russian customers and Latsanych reckons the older technology will be "good enough" for the next couple of years.

Over that period, equipment vendors including Ericsson, Huawei Technologies Co. Ltd. and Nokia Corp. (NYSE: NOK) will continue to work on ironing out the technical specifications regarding 5G.

Yet there is also a need for progress in other areas, according to Latsanych. "5G needs a different level of requirements from applications and people that does not exist at the moment," he said.

Among the steps that need to be taken in Russia is the liberalization and potential "re-farming" of spectrum operators will need to support 5G services, according to the MTS executive.

"Network sharing rules and practices [also] need to be secured before we can go into a totally new setup like 5G," said Latsanych.

MTS has already indicated that it will collaborate with Ericsson in a number of 5G areas, including discussions with regulators about spectrum.

Want to know more about 5G? Check out our 5G content channel here on Light Reading.

Despite its doubts, the operator is under some pressure from local rival MegaFon in the 5G race. Another of Russia's "big three" mobile operators, MegaFon has also announced plans to build trial 5G networks in time for the 2018 World Cup and is working with Huawei on this initiative.

VimpelCom Ltd. (NYSE: VIP), Russia's second-biggest mobile operator, has yet to reveal more specific details of its own 5G plans.

MTS is not the only European service provider concerned about the business and regulatory framework for 5G.

Earlier this week, Vodafone CEO Vittorio Colao urged European authorities to ensure that 5G rules and regulations were consistent across the region. (See Vodafone CEO: Europe Needs Uniform 5G Rules.)

"You had better make sure the standards and the rules are the same or there is a risk China or the US -- which are big markets -- will leapfrog," Colao said in response to questions from Light Reading.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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