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Articles & publications
18.06.2010
Mobile paradigm shiftVedomosti, Igor Tsukanov
Svyazinvest has resolved to bring order to the cellular companies under its control. To this end, the holding will be choosing uniform suppliers of telecommunications equipment and billing.
Svyazinvest is expected to hold tenders for the supply of network equipment and billing for cellular subsidiaries and associates, a source close to the state holding told Vedomosti, and this news was confirmed by first general director of the holding Alexander Provotorov. The equipment tenders will be held separately for three regions: the Far East with Siberia, the Urals and European Russia. Each of these areas can have two vendors at most – for GSM and CDMA networks.
Swap agreements are to be stipulated with the winners, with vendors expected to buy back old and used equipment in exchange for new facilities, a top manager close to the tender arrangers points out. This way, Svyazinvest’s cellular companies would only have to pay suppliers the difference in value. This information was confirmed by a participant in all three of the tenders, Chinese ZTE. A representative of Ericsson confirmed the participation of its company in Svyazinvest’s tenders, but declined to elaborate. People at Huawei andAlcatel Lucent also declined to comment and a representative of NokiaSiemens did not answer Vedomosti’s calls.
All large producers will be taking part in the equipment tenders, an employee at one of the suppliers pointed out. By contrast, the tenders for the supply of billing equipment (for the tariff charge system and customer billing) will see the participation only of Russian companies CBoss and Peter-Service, according to sources of Vedomosti and Svyazinvest. These sources noted that the systems of only two of these manufactures are operational on the networks of the holding’s cellular companies. The switch to a uniform billing platform will make it possible to phase in uniform tariff plans in all areas of the country, as well as an identical service range and customer care terms. This work is being done in the run-up to the merger of Svyazinvest’s cellular assets, which should take place after the holding’s regional telecommunications operators have been folded into Rostelecom.
A manager close to Svyazinvest views the proposal of Peter-Service as the most promising, although the final choice will be made only at a later time. The manager also declined to say what amount of funds the holding intends to allocate for replacing its billing system.
The commercial director of Peter-Service Ekaterina Manakhova confirmed for Vedomosti that the company participates in the tenders announced by Svyazinvest. While she declined to disclose the commercial details of the proposal, she did specify that Peter-Service offered a OSS/BSS solution which will make it possible to service GSM, CDMA, WiMax and LTE networks, and also to provide wireless Internet access throughout the entire coverage area of the mobile divisions of Svyazinvest’s subsidiaries.
“The proposal provides for the possibility of subsequently consolidating the mobile and fixed-line subscriber base, thanks to which operators will receive a uniform converged solution”, Ms. Manakhova pointed out. Converged billing for all types of telecommunications services is already in place at one of Svyazinvest’s regional telecommunications operators (RTOs) – Uralsvyazinform, she said. The solution offered by Peter-Service is used to service the customers of fixed-line telephony, IP telephony and broadband Internet access at North-West Telecom. Furthermore, all RTOs and backbone operator Rostelecom use a mutual billing system with operators that are partners of Peter-Service.
A representative of CBoss declined to answer Vedomosti’s inquiry.
Two of Russia’s Big-3 operators – MegaFon and MTS – use a uniform billing system. MTS uses a product made by Russian Sitronics, while MegaFon runs a system produced by American-Israeli Amdocs. VimpelCom, on the other hand, runs a combination of Amdocs and American Comverse billing systems, but uses them separately: the former to bill the subscribers of credit tariff plans, and the latter only for prepaid clients. Having a single billing system for all services will make it possible, for example, to issue uniform invoices to customers, a representative of MegaFon Karen Asoyan explained.
However, representatives of the Big-3 are not sure that it is advisable to enter into a single contract for the supply of telecom equipment. The upside to such a decision would be cheaper procurement thanks to a larger volume, Asoyan and press secretary of VimpelCom Anna Aybasheva concur. But on the downside, the operator runs the risk of depending on a vendor in the future, and over time the latter could attempt to dictate its conditions, including price terms, Asoyan said. What’s more, at the time when the old equipment is replaced with new facilities, there could be a system overload, he went on to say. He emphasized that MegaFon has no exclusive agreements with any of its suppliers and the operator is entitled to replace any of them at any time at its own discretion.
According to Aybasheva, VimpelCom has also tried to strike “a reasonable balance between operating and financial risks, since, as a rule, all types of equipment are supplied to the operator from two or three different suppliers, which makes it possible to choose. If there is only one supplier, and it encounters difficulties, this would definitely give rise to problems for the operator, Aybasheva goes on to say. VimpelCom has optimized its procurements in other ways, by combining the orders for all its business divisions (which are in charge of mobile telephony, fixed-line telephony and Internet access). As a result, the volume of equipment procurement from vendors has increased, and they have offered sizeable discounts.
9% market share
29 regions in four federal districts – this is the coverage area of Svyazinvest’s cellular business now. By the beginning of August 2010, the holding is expected to complete a transaction aimed at taking over CDMA operator Sky Link, which has a subscriber case numbering 1.1 mln users in 32 regions and which holds GSM licenses in 45 constituent entities of the Russian Federation.
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