Analyst commentary

• Russia's leading operators have expanded their spectrum holdings in Tyumen.
• The pace of LTE deployment in Russia is set to increase, with 1,800-MHz spectrum due to be released.

Soyuz LTE has announced that it has gained 2,600-MHz spectrum in the city of Tyumen. MMDS operator Pallada will transfer spectrum in covering the paired bands of 2,530–2,570 MHz and 2,650–2,690 MHz. Soyuz LTE will cover the costs of releasing the spectrum, but has not disclosed how much this would be.

Our take

The 2012 LTE tender that saw the nation's four largest operators – MegaFon, Mobile TeleSystems, Rostelecom, and VimpelCom – win licences in the 700-MHz band also saw them allocated spectrum in the 2,600-MHz band, but they would be required to sign agreements with the existing users. Soyuz LTE is a joint venture (JV) formed between the country's four largest operators, working to release spectrum in the 2,600-MHz band. Earlier in December 2013, Soyuz LTE signed a deal with Chelyabinsk MMDS operator People TV for spectrum in covering the paired bands of 2,530–2,570 MHz and 2,650–2,690 MHz. Soyuz LTE has previously signed deals with WiMAX operator Enforta and MMDS operator TV-Set.

Russia's mobile operators have increased the pace of LTE network deployment from a handful of locations each at the mid-point of the year. In the last week, Russia's operators have announced a raft of new deployments:

• Rostelecom has constructed LTE networks in the Nenets and Chukotka autonomous districts, republics of Khakasia, and North Ossetia-Alania, in addition to the Sakhalin region. Rostelecom is in the midst of network construction in the Krasnodar region, and the Khanty-Mansi and Jewish autonomous districts.
• VimpelCom has launched its network within the area bounded by the Moscow Ring Road, with a plan to expand to 80% of the city area by the end of 2013, and across the remainder of the Moscow region in 2014.
• MTS launched its LTE network in Kaluga and the Rostov region, with upgrades also set to occur in the Tomsk region.

IHS expects to see the pace of LTE deployments increase further following the next meeting of the State Radio Frequency Commission, due today (11 December 2013). The Commission is expected to discuss allowing the use of LTE over the 900-MHz and 1,800-MHz GSM frequency bands. With the Russian Radio Research and Development Institute confirming that LTE services do not interfere with GSM services, we expect approval to be granted. Allowing LTE services over GSM bands will allow operators to take advantage of existing 1,800-MHz infrastructure and the large LTE 1800 device market. It would also help operators sidestep the issue of buying out existing users of spectrum in the 2,500–2,700-MHz bands, a process that has slowed progress with Soyuz LTE only able to secure four deals since the conclusion of the 2012 LTE tender.

IHS expects that Rostelecom will be the main beneficiary due to the planned merger of its mobile units with Tele2 Russia. Both can exploit their extensive GSM 1800 holdings to offer LTE; currently, Tele2 does not offer 3G or 4G, and Rostelecom has a small share of the Russian mobile internet market.