Russian mobile calls, internet seen deteriorating after Nokia, Ericsson leave

  • Russian telecom users expected to see slower data, more dropped calls, and longer outages — the sources
  • This content was produced in Russia where coverage of Russian military operations in Ukraine is restricted by law

STOCKHOLM/MOSCOW, DECEMBER 21 (Reuters) – When Nokia (NOKIA.HE) and Ericsson (ERICb.ST) leave Russia at the end of the year, their departure could steadily cripple the country’s mobile networks in the long run. , which led to a deterioration in communication between ordinary Russians.

Russian cellphone users will likely experience slower downloads and uploads, more dropped calls, calls that don’t connect, and longer service outages as operators lose the ability to upgrade or patch software, five senior telecom executives and other industry sources said. , and the battle for a dwindling spare parts inventory.

Ericsson and Nokia, which together have a significant share of the communications equipment market and nearly 50% in terms of base stations in Russia, make everything from communications antennas to devices that connect optical fibers that carry digital signals.

They also provide important software that enables different parts of the network to work together.

“We’re working towards the end of the year, and then all the (sanctions) exemptions will end,” Ericsson chief financial officer Karl Melander told Reuters. Ericsson received sanctions waivers from the Swedish authorities.

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Nokia CEO Pekka Lundmark echoed that sentiment in an interview: “Our exit will be complete. We won’t give anything to Russia.”

Russia’s economy has so far weathered sanctions and export controls imposed by governments after Moscow sent tens of thousands of troops into Ukraine, but the imminent withdrawal of Nokia and Ericsson could have an even more profound impact on Russian daily life, finally making something as difficult as a simple phone call. .

Russia’s Digital Ministry did not respond to requests for comment, but Communications and Information Minister Mexut Chaadaev said this week that four telecom operators are signing contracts to spend more than 100 billion rubles ($1.45 billion) on Russian-made equipment.

“This will allow us to organize the modern production of communications equipment in Russia,” he said, without naming operators or producers.

Leading Russian telecom company MTS (MTSS.MM) declined to comment for this story. Megafon, Veon (VON.AS) Beeline and Tele 2, the other constituents of Russia’s Big Four telecom operators, did not respond to requests for comment.

Government programs to promote Russian equipment have helped telecom operators become less dependent on Nokia and Ericsson over the past several years and the Russian producers have increased their market share this year to 25.2% from 11.6% in 2021.

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But cutting ties with foreign companies is expected to disrupt Russian communications for a generation while the rest of the world pushes ahead with 5G deployment.

“If this situation continues, most likely, for years, then Russian cellular networks in terms of coverage may return to the state of the late 1990s, when their coverage was limited to large cities and wealthier suburbs,” said Leonid Konik, who heads the IT department. ComNews publication in Moscow.

Telecoms experts said rural areas will start to crumble first as operators remove equipment to bolster urban networks, while a lack of software updates could lead to network outages, or expose them to cyberattacks.

Chinese telecoms equipment maker Huawei, Russia’s largest seller last year with more than a third of the market, will continue to provide software updates and carry on maintenance work, but has stopped selling new equipment in Russia, according to people familiar with the matter.

End of program upgrades

The sources said the biggest hurdle for mobile operators to keep their networks running is the lack of software upgrades — Nokia and Ericsson have said they will stop software updates by next year — and patches.

The program unites a set of equipment that forms a communication network, converting analog and digital signals; monitors and optimizes network traffic; It protects the infrastructure from cyber attacks.

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While mobile operators can store hardware fragments for future use, they rely on a regular schedule of licensed software updates and patches to maintain network integrity.

“There is no doubt that software patches are of paramount importance in ensuring that networks remain operational, secure and reliable,” said Paolo Pescatore, analyst at BB Foresight.

Russian telecoms stockpiled foreign-made parts in February and March before the sanctions, two industry sources said, but stocks would drop after Nokia and Ericsson pulled the plug on Dec. 31.

Industry sources added that consolidation among Russian operators at the request of the government may also allow them to share equipment and resources to make networks last longer.

Huawei [RIC:RIC:HWT.UL]which stopped selling new equipment in Russia when the United States began imposing sanctions on Russia, also stopped selling its smartphones in the country, according to three informed sources. Huawei has not publicly disclosed its status in Russia and declined to comment.

(Reporting by Sovantha Mukherjee in Stockholm and Alexander Maru in Moscow; Editing by Kenneth Lee and Chris Sanders

Our Standards: The Thomson Reuters Trust Principles.

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