Two companies leave Russia
The heads of Nokia and Ericsson in an interview with Reuters confirmed their intention
In an April press release, Nokia noted that "according tohumanitarian reasons” and to ensure a continuous flow of information and access to the Internet for Russians, the company will continue to maintain networks. A similar statement was published by Ericsson.
In a statement released by the Swedish companyin December, it is noted that Ericson will completely leave the Russian market, about 600 employees were laid off in the process of reorganization. Some of the remaining employees and the customer support business will be transferred to a Russian company organized by former heads of the local Ericson office.
Nokia CEO Pekka Lundmark told Reuters that the company is also leaving Russia entirely. “Our output will be complete. We are not going to supply anything to Russia,” Lundmark said.
In November, TASS, citing unnamed sourcesreported that after leaving Russia, Nokia plans to supply spare parts for equipment installed by Russian telecom operators. According to experts, they should have been enough to support the operation of the equipment for three years. A new statement from Nokia's CEO runs counter to those plans.
How will the quality of communication services change?
Russian companies were preparing for the departure of companiesand therefore accumulated inventories of equipment necessary to maintain the operation of networks in the short term, Reuters notes, citing unnamed industry representatives. A key problem with companies leaving, according to experts, is the failure to update software.
The software integrates equipment into a singletelecommunications network, monitors and optimizes network traffic and protects infrastructure from cyber attacks, experts explain. Installing critical updates that fix identified hardware problems and vulnerabilities is necessary to maintain network integrity, they add.
Of course, software patches are of paramount importance for maintaining the health, security, and reliability of networks.
Paolo Pescatore, Analyst at PP Foresight
According to Reuters sources, in recent yearsRussian manufacturers have increased their market share. At the end of 2022, it is about 25%. This volume is still incomparable with the share of the Finnish and Swedish giants, which aggregate about half of the entire market.
Industry experts interviewed by the informationThe agency believes that the break in ties with foreign firms, if it lasts for a long time, could set Russian communications back a whole generation, and the coverage area could be reduced to the levels of the 90s.
Russian operators under sanctions
Representatives of the Russian Ministry of Digital Transformation in a statement forTASS refuted the Reuters forecast and reported that the withdrawal of foreign companies would not affect the quality of communications. According to the department, there is no shortage of equipment in the country, in addition, Russian companies have already signed contracts aimed at switching to domestic devices and software. The supply of Russian equipment should begin in 2025.
“The amount that operators will direct for the purchaseRussian equipment - more than 100 billion rubles. This will allow organizing modern production of telecom equipment in Russia," TASS quoted representatives of the ministry as saying.
In their statement, representatives of the ministryreported how the refusal of foreign companies to update software will affect the security of communication networks and how the work of Russian operators will be built in 2023 and 2024 before the announced delivery of Russian devices.
"Izvestia" with reference to materialsThe State Commission on Radio Frequencies was informed in early December that import substitution of equipment was not going as fast as planned. According to the publication, due to sanctions and difficulties with the development and production of the necessary equipment in sufficient volumes, operators faced difficulties with the transition to Russian equipment, including domestic base stations for 4G communication networks.
Izvestia notes that in the documents of the State Commissionit was proposed to transfer the networks of the Big Four operators to exclusively domestic equipment only in 2025–2028. Earlier, Kommersant wrote that the leaders of these companies sent an appeal to the Ministry of Digital Transformation with information that the first laboratory tests of domestic base stations “did not show the minimum required functionality.”
Sanctions against Russia: are there alternatives?
Nokia and Ericsson are big, but not the only onestelecommunications equipment providers. They can theoretically compete with, for example, the Chinese Huawei or ZTE. Representatives of these companies do not publicly comment on whether they will adhere to the sanctions regime or continue to work in Russia and in what format.
However, according to Kommersant, Huaweidue to the risk of secondary sanctions, it closes the Russian division of sales of data storage systems and telecommunications equipment from January 1. Two thousand employees are offered to either quit or leave to work in the company's offices in other CIS countries. Market participants believe that the company will continue to supply equipment to Russia through "parallel imports", but Huawei representatives refrain from commenting.
Mobile, broadband and mobileIn recent years, the Internet has become an integral part of everyday life and the work of almost all industries. Whether the sanctions and the withdrawal of foreign companies will affect the operation of the “circulatory system” of the 21st century economy in Russia may become clear as early as next year.
Read more:
A shock wave from the Sun has opened a crack in the Earth's magnetic field
17-year-old engineer came up with a magnetless motor: it can be used in electric vehicles
First-of-its-kind material withstands 'projectiles' that travel at the speed of sound