Huawei and ZTE might face difficulty in providing network equipment to Russian telecom operators, as they are heavily reliant on TSMC, Intel and Samsung on semiconductors, and wouldn’t want to be falling foul of US sanctions. It might be a costly affair to replace the existing equipment with the new ones for providing 5G services, and telcos might look at focusing on improving their 4G coverage. Also, the Russian government is yet to auction the 5G spectrum. Deliberations are still on to decide the spectrum to be used for 5G services. To overcome problems associated with 5G spectrum allocation, the telcos have formed a joint venture, New Digital Solutions, to test electromagnetic compatibility, conduct research on frequencies suitable for 5G services and implement measures to free up radio frequencies for 5G services.

Consumer distress

With major global service providers suspending their operations in the country, the Russian consumer is facing an increase in costs as telcos are increasing their tariffs to be able to maintain equipment and avoid frequent network disruptions. Another issue that Russian consumers are facing is that they are not being able to purchase 5G smartphones from some of their favorite brands. While Apple, Samsung and some other brands have suspended their supplies to Russia, the sales of Chinese smartphone players are increasing.

Outlook

Russia might have to wait to get 5G services, as the government hasn’t finalized the spectrum band for the auction, although the ministry concerned is moving towards mmWave in the 24.25GHz-27.5GHz band from existing radio relay stations and 4GHz. The plan is expected to be finalized not before 2023. In the absence of Nokia and Ericsson, the telcos have to depend on Chinese vendors Huawei and ZTE for most of their 5G equipment, but the situation here also looks uncertain for the time being. Chinese vendors are already reeling under the pressure of US sanctions and would be careful not to fall foul of the sanctions.