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Ministry of Communications prints virtual numbers


Ministry of Communications of Russia has agreed with the Ministry of Justice an order granting to virtual mobile operators individual numbers. Some operators have been waiting for that order for a long time to start a new business, others are skeptical: numbers won’t make virtual networks services more popular.

Ministry of Justice and Ministry of Communications agreed an order allowing allocation to virtual mobile operators (mobile virtual network operators, MVNO) telephone numbers in non-geographic federal codes (DEF-codes) - similar to those used by mobile operators. This was announced to "Vedomosti" by representative of the Ministry of Communications. Telephone numbers are distributed by Federal Communications Agency (Rossvyaz). Until now the agency, according to its representative Ekaterina Firsova, returned all requests for allocation of numbers, but as soon as the order goes into effect, Rossvyaz will resume taking them.

M inistry of Communications published on its website an order, according to which 10 million numbers in the code 941 will be allocated to the mobile network, providing a system "ERA-GLONASS," another three codes (958, 959, 990) will be given to other operators using business model MVNO (a total of 30 million numbers).

MVNO exists since the late 1990s. These companies are called virtual because they have neither the frequency nor the technical infrastructure of its own (except for billing systems), and use the resources of partners - the base operators. To base operators MVNO is a kind of corporate client which buys traffic in bulk and resells it by its own tariffs to end-users developing for them a variety of niche offers. As of now, there are 645-MVNO projects in the world, according to The MVNO Directory (produced by Blycroft Publishing).

In Russia, the legal possibility to obtain licenses for mobile communications without frequencies appeared in December 2008. Since then started projects of MTS (with X5 Retail Group and Auchan), “Sky Link" (with MTT), and others. MVNO-network was tested in Nizhny Novgorod on "Rostelecom" subsidiary’s infrastructure by "Transtelecom" (TTC).

But all of these projects lacked an important part - they did not have their own numbering. For example, "MTT. Mobile " is in fact "Sky Link’s" project as de jure customers are served by the company. The law forbids providing telecommunications services without numbers, explains CEO of MTT Eugene Vasiliev. Back in 2009 his predecessor in this position Eldar Razroyev wrote to the Ministry of Communications, complaining that the application of MTT for the numbers receives no reaction for months. But the Ministry couldn’t develop a draft order for the allocation of MVNO-numbers and when it finally did (the project appeared on Ministry’s website in July 2010), it could not immediately approve it. Now MTT will finally get numbers, hopes Vasiliev.

TTC also hopes that the Federal Communication Agency will satisfy its application for 10 million numbers (capacity of a DEF-code), then the project can get started in commercial operation at once, said head of external relations and communications of TTC Tatiana Semenova. For two years TTC expects to connect approximately 1.5 million employees of Russian Railways and spend $7-15 million depending on the model of the project, she said. With no federal numbers TTC cannot provide service throughout the country, and the project is conceived as a nationwide one, says Semyonova. This will take another agreement with some of the federal cellular operators that have frequencies around the country, such negotiations are going on, said TTC representative before.

Rostelecom is also having negotiations with cellular 'big three' operators meaning the creation of MVNO in some regions where it does not have its own mobile assets, said recently "Rostelecom’s" president Alexander Provotorov. Yesterday company’s representative declined to comment.

MVNO in Russia is still not developed, but not because of lack of numbers, insists director of corporate relations of X5 Retail Group Mikhail Susov who runs a joint project with MTS "Allo" (in effect since summer 2010). Virtual operator is primarily a marketing project, nothing stops it from selling to subscriber services with numbers of base operators, he says, but marketing ideas for which people would want to connect to MVNO are not present in the market. Spokeswomen of VimpelCom Anna Aybasheva agrees with that: the operator has not yet seen commercially interesting proposals in MVNO segment.

Project of X5 Retail with MTS also cannot be called successful, says Susov: according to him at the moment X5 Retail thinks about its future, but the request for numbers’ allocation will not be applied in any case. It will be possible to talk about commercial success only if during its first year of operation it will be able to connect at least 200,000 subscribers, said Susov in May 2010. How many subscribers has tariff 'Allo' at the moment was not disclosed by MTS spokeswoman Valeria Kuzmenko, but according to her MTS is satisfied with this sales’ channel (tariff is being sold in stores "Perekrestok" and "Carousel").

Numbers are needed at least to enable a virtual operator to build its marketing strategy independently from the base operator, objects Vasiliev of MTT. "MTT. Mobile "is developing quite successfully, he adds, without disclosing the number of subscribers. For a small company virtual network serving tens of thousands of subscribers may be a good business, agrees Susov, but for such giants as X5 Retail this project is too small, even if it’s commercially successful. |

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