MOSCOW (WiMAX Day). During the opening of the InfoCom-2006 conference in Moscow yesterday, Comstar-UTS, a subsidiary of AFK Sistema Group announced their intention to build WiMAX networks in 16 regions throughout Russia using 2.5 to 2.7 GHz spectrum.

Comstar has been actively testing WiMAX in Moscow during the last year, and they own licenses for 2.5 to 2.7 GHz spectrum that cover Moscow. The company is soon to be issued more licenses for this spectrum from the State Commission of Radio Frequencies (GKRCh) that cover other regions in Russia.

Selective spectrum allocation
The GKRCh announced last month that it decided to open the frequencies of 2.5 to 2.7 GHz for use with WiMAX. These frequencies have been a matter of debate in Russia as they have been occupied by the Russian Military, and it was only last month that the Ministry of Defence agreed to relinquish control of the spectrum.

According to Andrey Beskorovajnogo, vice president of the GKRCh, some spectrum has been allocated and applications are being considered for further allocation. Spectrum in each region will be allocated in 20 Mhz portions, with a total of 80 Mhz available, which should allow for four operators in each region. However, because operators intend to use the spectrum for “mobile” WiMAX, GKRCh is keeping most applicants at bay for the moment.

GKRCh also expects to update its radio regulations in October 2007, which will include an update on the definition of “mobile”, and by which time 2.5 GHz spectrum may or may not be classified as an IMT spectrum band. However, GKRCh does not exclude WiMAX from current use of the spectrum, and has not ruled out the use of mobile WiMAX for the spectrum.

Competition from GSM networks
The most likely recipients of two of the three remaining regional licenses are the leading GSM networks in Russia, Vimpelcom and MTS. Both companies have confirmed that they intend to receive licenses for the 2.5 GHz spectrum. Vimpelcom operates the BeeLine brand and is owned by Alfa Bank and Telenor. MTS is owned by Sistema group. Both companies have had problems launching 3G networks, and with nearly 120 million subscribers between them, each is anxious to offer low-cost and high-speed WiMAX services for their clients.

MTC already has been testing the integration of WiMAX with their GSM network this summer, with the help of Kvazar-Micro, a systems integration specialist company that is another Sistema subsidiary and part of the Sitronics group. Kvazar-Micro has been very active in WiMAX development and has been working with Intel for the last year on many field trials.

Among all the companies vying for position in the WiMAX market in Russia, Sistema Group is the best equipped and has been the most active. It owns wide swaths of spectrum in all available frequencies, and its various telecom holdings in Russia each have a controlling position in the market. According to sources at Sistema, the group intends to leverage its spectrum holdings to the benefit of its subsidiaries and to maximise the combined value of WiMAX services amongst their fixed-line, GSM, and ISP businesses.