Russian mobile calls, internet seen deteriorating after Nokia, Ericsson leave

  • Russian telecom users are expected to see slow data, severely reduced calls, long outages – sources
  • This content was produced in Russia where the law restricts the installation of Russian military activities in Ukraine

STOCKHOLM/MOSCOW, Dec 21 (Reuters) – When telecoms gear makers Nokia ( NOKIA.HE ) and Ericsson ( ERICb.ST ) leave Russia at the end of the year, their departure could gradually cripple the country’s cellphone networks in the long term, causing a breakdown in communications. they are in Russia every day.

The top five telecommunications executives and other industry sources said Russian cellphone users will likely experience slow downloads and uploads, severely dropped calls, calls that won’t connect and long outages as operators lose the ability to upgrade or patch software, and struggle with reduced support. parts inventories.

Ericsson and Nokia, which together account for the majority of the telecommunications equipment market and close to 50% according to Russian channels, make everything from telecom antennas to hardware that connects optical fibers that carry digital signals.

They also provide essential software that makes the different parts of the network work together.

“We’re working towards the end of the year and that’s when all exemptions (from sanctions) expire,” Ericsson chief financial officer Carl Mellander told Reuters. Ericsson was granted immunity from punishment by the Swedish authorities.

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Nokia CEO Pekka Lundmark echoed that view in an interview, “Our exit will be complete. We will not bring anything to Russia.”

The Russian economy has so far suffered from sanctions and export controls imposed by the government after Moscow sent tens of thousands of troops to Ukraine, but the upcoming withdrawal of Nokia and Ericsson could have a far greater impact on daily life in Russia, finally making it easier. like a phone, it’s hard.

Russia’s digital ministry did not respond to requests for comment, but this week, Maksut Shadaev, the communications and mass media minister, said four telecommunications companies are signing contracts to spend more than 100 billion rubles ($1.45 billion) on Russian-made equipment.

“This will allow us to organize the modern production of telecommunications equipment in Russia,” he said, without naming operators or manufacturers.

Russia’s leading telecommunications company MTS ( MTSS.MM ) declined to comment on the story. Megafon, Veon’s ( VON.AS ) Beeline and Tele 2, the other companies that make up Russia’s Big Four telecommunications firms, did not respond to requests for comment.

Government programs to improve Russian equipment have helped mobile operators to become less dependent on Nokia and Ericsson over the past few years and Russian manufacturers have increased their market share this year to 25.2% from 11.6% in 2021. But the severing of ties with foreign firms is expected by industry sources to set Russia’s communications back a generation as the rest of the world moves forward to deploy 5G technology.

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“If, perhaps, this situation lasts for years, Russian mobile networks in terms of availability may return to the situation of the late 1990s, when their availability was limited to large cities and very rich areas,” said Leonid Konik, head of IT. ComNews book in Moscow.

Rural areas will begin to deteriorate first as operators remove equipment to strengthen urban networks, telecommunications experts say, while a lack of software updates could lead to network outages, or be vulnerable to cyber attacks.

Chinese telecommunications equipment maker Huawei, the biggest seller in Russia last year with more than a third of the market, will continue to provide software updates and continue repair work, but has stopped selling new equipment in Russia, according to sources familiar with the matter.

SOFTWARE DEVELOPMENT ONLY

The biggest obstacle for mobile phone operators to keep their networks running will be a lack of software upgrades – Nokia and Ericsson say they will cut software updates next year – and patches, the sources said.

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Software includes a range of applications that make up a telecom network, converting analog and digital signals; monitors and optimizes network traffic; and protects the infrastructure from cyber attacks.

While mobile operators can stockpile hardware components for future use, they rely on a regular program of licensed software updates and patches to maintain network integrity.

“Undoubtedly, software patches are essential to ensure that networks remain functional, safe and reliable,” said Paolo Pescatore, PP Foresight analyst.

Russian phone workers stocked up on foreign-made parts in February and March before the sanctions, two industry sources said, but the inventory will drop after Nokia and Ericsson pull the plug on Dec. 31.

Consolidation among Russian operators at the behest of the government may also allow them to share equipment and resources to make the networks more durable, industry sources added.

Huawei [RIC:RIC:HWT.UL], which stopped selling new equipment to Russia when the United States began punishing Russia, has also stopped selling its smartphones in the country, according to three sources familiar with the matter. Huawei has not publicly disclosed its position in Russia and declined to comment.

Reporting by Supantha Mukherjee in Stockholm and Alexander Marrow in Moscow; Edited by Kenneth Li and Chris Sanders

Our Standards: The Thomson Reuters Trust Principles.

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