Dennis Sverdlov is the CEO of Yota

Dennis Sverdlov is the CEO of Yota and is speaking on Day Two of the LTE World Summit 2012 taking place on the 23-24 May at the CCIB, Barcelona, Spain. Ahead of the show we speak to him about the challenges the Russian network operator has faced during its transition from WiMAX to LTE, on getting FDD and TD-LTE networks to interoperate and his view on unlimited data tariffs.

What are the main milestones you have reached with relation to your LTE deployment?

Yota was the first operator in Russia to showcase a fully built LTE network in Kazan, Russia with whole-city coverage in 2010. This year we started a first commercial LTE network in Novosibirsk, Russia. Currently we’re in the process of WiMAX to LTE transition in our five existing markets, including Moscow and Saint-Petersburg.  Yota is also rolling out Greenfield networks in three more cities in Russia. To date, we’ve built about 2000 LTE base stations across the country, including more than 1200 in Moscow.

We were also the first in Russia to successfully implement the LTE wholesale model, with partners such as MegaFon and Rostelecom due to start their commercial services using our radio infrastructure in April 2012. This deal required changes to both the mindset and processes of the big “traditional” operators.

What are the main challenges you have faced, or expect to face, as you roll out LTE?

The biggest challenge has been to go through regulatory approval of the new standard in Russia. The technology itself, given its “all-IP” nature, poses quite a challenge for the regulator, and approving this new standard required heavy changes to existing laws. Thankfully, we have seen very positive feedback and necessary changes has been made lightning-fast.

Another serious issue of a more technological nature was the preparation of WiMAX swap. We made a very deep TDD/FDD coexistence analysis and its results required us to develop a very sophisticated technical and commercial swap solution in order to minimise the threat to customer experience.

To what extent can LTE provide an insurance against declining revenue streams from voice and SMS?

Declining revenue streams from traditional services are not caused by customers’ evil intent, but are signals of underlying technological change. The reality is that communications are migrating to IP. In this sense, LTE, given its potential for high-quality real-time multimedia services, could secure revenue streams. However, we believe that traditional operator business models will have to change accordingly.

Is there a place moving forward for unlimited data tariffs? Are they sustainable?

We have always believed in maximum openness and honesty when it comes to customer experience. Our point of view is that complicated tariffs with unclear data caps hurt customers and harm their experience – after all, nobody wants to count megabytes while watching a movie. It’s exactly for that reason that Yota always offered unlimited volume tariffs, with a huge range of different maximum speeds.

The key to the sustainability of this business model is the approach. We think that the cost structure of any operator’s packet data is not in any way bound by the amount of megabytes sent, but rather is determined by the maximum speed capacity of the network. Therefore, changing the operator business models to revolve around “elementary speed units”, such as “megabit per second” helps to make the whole business sustainable. Of course, this requires very intelligent traffic and congestion management technologies, with clever and sophisticated policy control designs, but we are absolutely sure that such an approach benefits both the operator and the customer.

With so much attention paid to the radio access network is there enough focus on backhaul?

We see the transition from relatively slow backhaul technologies such as microwave into faster technologies such as fibre. However, we feel that this transition should happen at a much faster pace.

What’s your view on FDD vs TD-LTE spectrum?

Both technologies will co-exist, however TD-LTE will be used mainly across Asia and India.

Where do you stand on the issue of OTT players contributing to the costs of deploying networks?

Recently we started our own VoD service under the brand “Yota Play”. We strongly believe that OTT services will prosper in the era of fast mobile broadband, and it is our feeling that operators should create strategic partnerships with this kind of service provider.

Do you think that VoLTE will have an impact and if so in what time frame?

Yes, we believe that VoLTE with SRVCC is the future of voice services. However, further evolution of standards and equipment is certainly required for commercial deployment. We expect mass deployments to happen no earlier than 2014.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

The recent development of 3GPP standards is certainly one of the many examples of mobile industry innovation. We also think that there are a lot of changes in the policy control area, leading to new innovative technological and commercial solutions.

What changes would you hope to see in the industry in the next five years?

In order to be faster adopters we think that the industry needs to streamline and simplify internal processes to be able to deliver new technologies to customers faster. They deserve that.

Why are you attending the LTE World Summit and what are you looking forward to most?

We feel that we have some important experience to share with respect to our (quite unique) deployment, and would like to get insights into recent industry developments – to understand the general outlook of operators, and the plans of vendors.

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your http://ws.lteconference.com/interest.

Telenor faces a legal battle over its purchase of VimpelCom shares

The legal drama involving Nordic operator Telenor continued in Russia this week with authorities disputing the VimpelCom shares it purchased earlier this year.

In February, Telenor purchased 234 million VimpelCom preferred shares from Weather Investments for $374.4m, thereby increasing Telenor’s voting share in VimpelCom to 36.36 per cent. Now, Russian antitrust authority the Federal Antimonopoly Service of the Russian Federation (FAS) has filed a claim alleging that the share purchase and option transactions that it entered into with Weather Investments were illegal and violated Russian Strategic Investment Law.

The claim requests that the Moscow Arbitrazh Court, the principal commercial court in Moscow, invalidates the transactions, and Telenor return those VimpelCom shares to Weather Investments. The FAS names VimpelCom and holding company Altimo as “interested third parties” in the claim.

Telenor said that it has not yet been formally notified of the claim by the FAS or the court, but understands that the antitrust authority wants Telenor to strike a similar shareholders’ agreement to the one terminated by its venture partner Alfa Group last year, and until then, aims to prohibit Telenor from changing VimpelCom’s governing bodies.

Telenor spokesman Dag Melgaard said that that the operator believes it has fully complied with the Strategic Investment Law as it has been interpreted and applied to date.

“In addition, we have provided the FAS with all of the information it has requested.  There has not been any change of control in VimpelCom, nor is there any agreement between Telenor and Weather Investments concerning control of VimpelCom,” he said.

“We are open to a dialogue with the FAS, but we will defend Telenor’s position using all available remedies under applicable law and treaties.”

He added that, furthermore, Telenor is within the ownership range it has been before, and the transaction with Weather Investments reestablished the balance of shareholder interest which existed before Telenor’s ownership was diluted as a result of the Wind Telecom transaction.

The claim is the latest chapter in a long-running saga dispute with Altimo, which it had believed to have put to rest with the share purchase in February.

At the time of that purchase, the operator said in a statement that, because of the transaction, it had withdrawn all its existing legal claims against Altimo Holdings and VimpelCom and would work to expand the VimpelCom Board to eleven members.

Alexander Izosimov

The chief executive of second-placed Russian carrier VimpelCom, Alexander Izosimov, is to step down at the end of June. Izosimov will be leaving on a high, having engineered the somewhat controversial merger with Orascom Telecom parent Weather, which created the world’s fifth largest mobile carrier.

A statement points out that Izosimov’s tenure as CEO started in 2003 but neglects to mention the 13 months or so when ex-Telekom Austria chief Boris Nemsic took the helm between April 2009 and June 2010. Nemsic evacuated his post rather abruptly, amid suggestions he hadn’t been planning his resignation, as the firm reorganised itself into four new business units; Russia, Ukraine, CIS and International and Izosimov took up captaincy once again.

In this instance, current chairman, Jo Lunder, has been elected as the new CEO of VimpelCom, taking over from Izosimov at the end of June.

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Mobile operators are moving to IP backhaul to deal with explosive growth in data traffic

Russia’s mobile operators are moving to IP backhaul to deal with explosive growth in data traffic. Leading Russian carrier MTS (Mobile TeleSystems) said this week that it is expecting 86 per cent growth in Russian data traffic by 2015, forcing a strategic focus on network transport.

According to MTS, an upgrade to Ethernet and IP as a backhaul carrier is the best way the operator can maintain service quality going forward. MTS has partnered with Tellabs and local telecom solutions provider Intracom Svyaz to undertake this upgrade.

In a double win for Tellabs, smaller Russian player MegaFon is also planning to build a countrywide IP mobile backhaul network with the aim of reducing costs, increasing network capacity and ensuring a smooth migration from legacy technology to an all-IP transport platform. In this case Nokia Siemens Networks will be performing the systems integration.

“We aim to build a unified mobile backhaul to facilitate faster rollout of 3G services such as HSPA and prepare a converged IP transport network for fixed and mobile services for millions of people in Russia,” said Valery Ermakov, chief operations officer at MegaFon. “This will help us keep pace with the exponential increase in the data traffic while significantly reducing our capital costs.”

Feature: Many operators are pushing core capabilities out to the network edge

Telecoms.com recently looked at how operators have moved on from addressing shortcomings in their radio access networks, which are being relentlessly battered by the demands of smartphones and tablets, with network congestion is moving ever closer to the core, where it becomes increasingly expensive to manage. The consensus is that the best strategy is to deal with the tidal wave of data moving towards the core before it even gets there, by keeping it as close to the network edge as possible. According to the industry pundits spoken to for this feature, operators worldwide are rethinking their network topology, especially with regard to the design and implementation of the last mile.

MTS, VimpelCom (Beeline), Megafon and Rostelekom will use Yota's network

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.”

The deployment of the 40 Gb IP/MPLS backbone network will allow MegaFon to optimize the existing core network and extend the service range of its subscribers with 3G data services.