Russia is Expected to Increase Tariffs for Mobile Communications by 10-15%

Russia is Expected to Increase Tariffs for Mobile Communications by 10-15%

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According to the Telecom Daily agency, the average rates for communications, including the largest cellular operators, may increase by 10-15% in Russia next year. Experts of Finam Investment Holding and TNT Consulting analytical agency also agree with this data.

According to Vedomosti, this increase in the cost of tariffs is due to the fact that it is necessary to buy equipment that is under sanctions.

According to Denis Kuskov, CEO of the Telecom Daily analytical agency, as reported by Moskovsky Komsomolets, a preliminary survey of experts has shown that there may be an increase in the cost of cellular communications of up to 15%. The increase in the price of imported equipment is expected due to the fact that due to the sanctions imposed on Russia by Western countries after the start of the special military operation in Ukraine, the direct supply of these goods has been suspended.

Leonid Delitsyn, analyst of the Finam investment holding, also shares this opinion. He connects the increase of cell operators' tariffs with the fact that they need extra money for purchasing of necessary imported equipment. However, experts agree that mobile operators are likely to take this step. In addition, the increase of tariffs is also connected with the high credit load on the domestic companies. They have to use credits quite often to purchase the necessary materials and equipment.

Meanwhile, the tariff increase, which took place at the beginning of the year, is a standard practice, which is used by Russian cellular operators. For example, Vedomosti reminds that in 2020, the operators of the Big Four raised their tariffs, citing the growth of costs caused by the ‘Yarovaya Law,’ which implies costs for storing information on text messages and calls made by subscribers. Over the year, the increase was about 10%.

At the same time, it should be taken into account that the operators will incur big expenses due to the 5G network, the implementation of which will have to be spent by 40-50% more due to the requirements of the Ministry of Communications, which stipulate that from September 1, 2023 only radioelectronic means of communication produced in Russia will be allowed to be registered.

According to RBC, Rostelecom's press service reminds that it is very important not to create additional financial burden on cellular communications companies, so they are able to ensure high quality and continuity of their services.

According to Sergei Polovnikov, CEO of the Content Review agency, cited by Vedomosti, operators first of all increase tariffs with the lowest prices that they offer to consumers in order to increase their subscriber base. Polovnikov specified that for operators the client, bringing income of 600 rubles ($9.77) per month, belongs to good indicators. The fact that the cost of maintenance and service networks are calculated in the currency should be also taken into account. That is why the cost of the subscription fee increases if the foreign currency rises in value against the ruble.

According to media reports, the FAS is being carrying out an economic check on the validity of changes in tariffs for consumers. If it is recorded that the change in the tariffs of telecom operators does not meet the consumer price index, the agency will take antimonopoly response measures.

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