Yota scores deal as Russia’s LTE network operator

Russian network operator Yota has turned its fortunes around, having initially backed WiMAX, then switching to LTE. This week the company signed a deal with the country’s leading players, to act as the network provider for LTE services in over 180 cities with a total population of more than 70 million citizens.

The company, which has always preferred to describe itself as a mobile broadband provider, changed tack from WiMAX to LTE late last year. Yota claims to provide 4G (LTE and WIMAX) services to more than 700,000 customers across five cities in Russia: Moscow, St Petersburg, Sochi, Krasnodar and Ufa.

Under Thursday’s agreement, the country’s major network operators –MTS, VimpelCom (Beeline), Megafon and Rostelekom, will see Yota become their 4G network provider and guarantee the roll out of its LTE network over 180 cities with a total population of more than 70 million citizens by 2014.

The deal provides each of the operator participants with an option to buy shares in Yota in 2014.

Commenting on the company’s position, Yota CEO Dennis Sverdlov said: “We firmly believe in the separation of network ownership and service provision and believe that this ground-breaking agreement will drive innovation and benefit Russian consumers.”

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Ovum analyst Angel Dobardziev, said of the deal: “This is another step towards ever-broader and deeper network sharing among operators that is increasingly gaining traction. This announcement also suggests that Russian mobile operator choice is limited. Unlike in the US, this deal suggests that MTS and others may not be willing, or are unable to roll out their own LTE networks in the short term. Significantly, the Russian government has an indirect stake in Yota, and there is a state entity on hand in this deal to ‘ensure an efficient and collaborative approach’. Therefore, the long term market structure in Russia is set to shift on a dramatically different path, with Yota and the Russian state taking centre stage.”

Ovum analyst Angel Dobardziev, said of the deal:

“This is another step towards ever-broader and deeper network sharing among operators that is increasingly gaining traction. This announcement also suggests that Russian mobile operator choice is limited. Unlike in the US, this deal suggests that MTS and others may not be willing, or are unable to roll out their own LTE networks in the short term. Significantly, the Russian government has an indirect stake in Yota, and there is a state entity on hand in this deal to ‘ensure an efficient and collaborative approach’. Therefore, the long term market structure in Russia is set to shift on a dramatically different path, with Yota and the Russian state taking centre stage.”