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Russia postpones mobile data decision: paper

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(Reuters) - Russia has postponed indefinitely a decision on whether to allow mobile operators to recycle their old frequencies to offer faster Internet on-the-go, saying more tests were needed to show this wouldn't hurt service quality, a newspaper reported.

A delay would be a blow to Sweden's Tele2 AB - Russia's only foreign mobile operator and its fourth-largest in terms of subscribers - which had been seeking to retune its old spectrum to the new usage, known in the Russian debate as technology neutrality.

Tele2 shares were down 3 percent.

Tele2 recently lost a Russian tender for a fourth generation mobile licence, designed for data and seen as crucial for future growth as revenue from voice calls flattens out.

Russia's state Radio Frequency Commission was due to discuss technology neutrality next Tuesday, but participants at a meeting of the commission had rejected the proposal for now due to a lack of tests, business daily Vedomosti wrote.

Tele2 said it would be disappointed with a postponement of the decision, but believed technology neutrality would be implemented in due course.

The company said last month that if Russia did not agree to technology neutrality, the firm could buy space on another operator's network or extend current cooperation with its 2G roaming partners to include data services.

Russia expectedly awarded four LTE licences in July to state-controlled Russian operator Rostelecom and the big three dominant mobile phone groups - MTS, MegaFon and Vimpelcom.

Those companies are expected to begin building 4G services into their networks soon.

"Tele2, as the only major foreign-controlled mobile operator in Russia, is unlikely to be handed a first-mover advantage to develop mass-market 4G," wrote analyst Ulrich Rathe at brokerage Jeffries in a note.

"However, we see little reason to give up hope altogether that Tele2 will eventually get technology neutrality, as some key authorities have come out in favour already and a potential delay could be down to giving competitors time to sort out their own roadmap to 4G first."

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