Russia: Telecommunication Regulation & Liberalization

Overview

Until 1993, the Russian telecommunication network was fully controlled by the Russian Ministry of Communications.  That year, local network operators were privatized so that each of the 85 regions had one provider.  Rostelecom became the single national network operator. (32)

 In 1995 the Russian government consolidated its stakes in the regional companies into a national holding company, Svyazinvest.   The government tried to start the privatization process in 1997 through the sale of 25% interest in Svyazinvest to a Cyprus-based consortium, Mustcom.  They had planned to sell a second interest of 25% but it was delayed because of the 1998 economic crisis. (32)

 In 2002, the industry was reorganized and seven new interregional companies were formed, but their market capitalization is small by international standards.  The proclaimed goal of the reorganization is to centralize cash flows and increase operations efficiency in the industry. (33)

 Until 2010, the Russian government insists on retaining the monopoly of Rostelecom for long distance services.  WTO specialists have criticized this plan, stating that “delays in the liberalization of service provision may slow the development of the commercial data transmission infrastructure, casuing problems for the development of the Russian economy as a whole.”(33)

 Table of Russian Infrastructure Status