Mobile communications in Russia is an economic success story. Four competing operators have built state-of-the-art networks, relying on foreign technology and capital. However, as the sector prepares for the transition to 5G, it is facing strong headwinds: The security apparatus is unwilling to relinquish the most promising radio spectrum, 3.4-3.8 GHz, for 5G licenses. At the same time, Russia’s telecoms regulator is urging operators to build a single, shared 5G network with state participation, an idea that the privately-owned carriers strictly oppose. Additionally, import substitution lobbyists are working hard to make 5G infrastructure “Made in Russia” mandatory.
Russia’s telecommunications sector is stuck in a regulatory tug of war that is delaying the widespread introduction of 5G for years and could dampen the country’s digitalization hopes. At the same time, the slow-moving, multi-stakeholder bargaining process has so far prevented disruptive political interventions by the Russian state. Russia’s privately-owned network operators have defended their independence and rebuffed strict import substitution regulation, keeping the market open for foreign technology partners such as Ericsson, Nokia, and Huawei. However, a radical policy shift, triggered by domestic developments or by future sanctions cannot be ruled out. It would result in less market competition and innovation and potentially deepen Russia’s technological dependency from China.
The views expressed in this article are those of the authors alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.