The Ministry of Digital Development has calculated the fee for using frequencies in a new way
Posted: Mon Jan 20, 2025 6:09 am
MegaFon's operating expenses in the first half of 2024 increased by RUB 8.815 billion to RUB 161.21 billion. As the company reported in its interim consolidated financial statements for the six months ended June 30, 2024, the increase in operating expenses is due to the cancellation of benefits for the use of the LTE frequency spectrum from January 1 of this year.
For many years, the Ministry of Digital Development, Communications and Mass Media considered the LTE standard to be promising, providing mobile operators with a norway whatsapp resource reduction factor that allowed them to pay 10 times less for LTE frequencies than for the spectrum used for other mobile technologies. The Ministry of Digital Development, Communications and Mass Media retained this reduction factor (0.1) in 2023, when it approved a new Methodology for calculating the one-time fee and annual fee for the use of the radio frequency spectrum in the Russian Federation - the corresponding ministerial order No. 400 was issued on April 24, 2024. The Ministry of Justice registered this order on June 27, 2023.
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The Russian Ministry of Justice has registered an order from the Ministry of Digital Development, which has approved a new method for calculating fees for the use of the radio frequency spectrum. Now the fee for the use of frequencies, which the government takes from all telecom operators using radio technologies, takes into account the region of operation, as well as the prospects and social significance of the technology.
But less than five months had passed since the registration of Order No. 400, when the Ministry of Digital Development issued an additional order - "On the non-application of the prospects coefficient for LTE radio technology in the Methodology for calculating the amount of a one-time fee and an annual fee for the use of the radio frequency spectrum in the Russian Federation..." (No. 1007 of November 21, 2023). With this document, the industry ministry cancelled the preferential coefficient of prospects for the LTE standard from January 1, 2024 to December 31, 2024: thus, for the whole of 2024, this coefficient became equal to 1 - in other words, the fee for LTE frequencies for operators increased 10 times.
At a meeting with journalists in February 2024, Alexander Torbakhov, CEO of PJSC VimpelCom (Beeline brand), estimated the additional costs of all Russian cellular operators with the increase in fees for using LTE frequencies at more than 20 billion per year.
Read also
Communication tariffs will increase due to increased prices for using frequencies
According to estimates by the CEO of PJSC VimpelCom Alexander Torbakhov, due to the increase in prices for the use of LTE frequencies, the Big Four operators will pay an additional 20 billion rubles to the budget in 2024. This time, the FAS, subject to confirmation by the operators of an increase in costs, may consider the increase in communication tariffs justified.
But it looks like the head of VimpelCom was wrong on the downside. Even if we assume that the rise in LTE frequencies increased MegaFon's operating expenses for the first six months of 2024 by only 8 billion rubles, in annual terms this will lead to additional costs for paying for the LTE spectrum of this operator alone in the amount of 16 billion rubles.
For many years, the Ministry of Digital Development, Communications and Mass Media considered the LTE standard to be promising, providing mobile operators with a norway whatsapp resource reduction factor that allowed them to pay 10 times less for LTE frequencies than for the spectrum used for other mobile technologies. The Ministry of Digital Development, Communications and Mass Media retained this reduction factor (0.1) in 2023, when it approved a new Methodology for calculating the one-time fee and annual fee for the use of the radio frequency spectrum in the Russian Federation - the corresponding ministerial order No. 400 was issued on April 24, 2024. The Ministry of Justice registered this order on June 27, 2023.
Read also
The Russian Ministry of Justice has registered an order from the Ministry of Digital Development, which has approved a new method for calculating fees for the use of the radio frequency spectrum. Now the fee for the use of frequencies, which the government takes from all telecom operators using radio technologies, takes into account the region of operation, as well as the prospects and social significance of the technology.
But less than five months had passed since the registration of Order No. 400, when the Ministry of Digital Development issued an additional order - "On the non-application of the prospects coefficient for LTE radio technology in the Methodology for calculating the amount of a one-time fee and an annual fee for the use of the radio frequency spectrum in the Russian Federation..." (No. 1007 of November 21, 2023). With this document, the industry ministry cancelled the preferential coefficient of prospects for the LTE standard from January 1, 2024 to December 31, 2024: thus, for the whole of 2024, this coefficient became equal to 1 - in other words, the fee for LTE frequencies for operators increased 10 times.
At a meeting with journalists in February 2024, Alexander Torbakhov, CEO of PJSC VimpelCom (Beeline brand), estimated the additional costs of all Russian cellular operators with the increase in fees for using LTE frequencies at more than 20 billion per year.
Read also
Communication tariffs will increase due to increased prices for using frequencies
According to estimates by the CEO of PJSC VimpelCom Alexander Torbakhov, due to the increase in prices for the use of LTE frequencies, the Big Four operators will pay an additional 20 billion rubles to the budget in 2024. This time, the FAS, subject to confirmation by the operators of an increase in costs, may consider the increase in communication tariffs justified.
But it looks like the head of VimpelCom was wrong on the downside. Even if we assume that the rise in LTE frequencies increased MegaFon's operating expenses for the first six months of 2024 by only 8 billion rubles, in annual terms this will lead to additional costs for paying for the LTE spectrum of this operator alone in the amount of 16 billion rubles.