MOSCOW (WiMAX Day). It was a surprise for many in November last year when a virtually unknown company from St Petersburg named Summa Telecom was awarded licenses by the State Commission of Radio Frequencies (GKRCh) for 2.5 GHz spectrum in all of Russia.

Many simply surmised that a well-placed individual gained the licenses simply for the purpose of selling them, as the company had no other licenses necessary to operate a network and transmit data.

Summa Telecom, however, again surprised the market this week when it announced that it received licences for data transmission and IP-telephony. These licenses place significant obligations on Summa Telecom, as it is obliged to construct and use its network for the licensed purposes within two years.

According to a report in RBC Daily, a Summa spokesman, Igor Ryabov, commented that the company intends to build a WiMAX network “on which services of telephony will be rendered, including access to Internet and TV.” Ryabov also noted that Summa is presently preparing a business plan with assistance from Deutsche Telekom Consulting.

Summa Telecom is owned by Russian businessman Ziyavudinu Magomedov, whose principal businesses include oil transport logistics and metals. According to financial newspaper Vedomosti, Summa Telecom was acquired by Magomedov in February 2006. At the time, the only engagement of the company was building fibre-optic networks.

Dagestan WiMAX
The company also began a “test project” at the end of 2006 to construct a DSL network in neighbouring Dagestan. The network is focussed on granting Internet access to schools. Summa has thus far invested $1.5 million in the project, and in the first quarter of 2007, the company intends to begin work constructing a WiMAX network.

There is presently no WiMAX network operator in Dagestan. A spokeswoman for incumbent fixed-line operator Dagsvyazinform (a subsidiary of Russian Svyazinvest) confirmed that “deliveries of the equipment have begun in December, and… in the long term we shall cooperate in the field of wireless broadband access.”

Strategic partners
Summa Telecom has yet to announce any strategic partners, however many financial analysts believe that Summa will require a partner with deep pockets if it will construct a WiMAX network across Russia. “Such a network would be as big as what Sprint builds in United States,” said Olga Laschko, and analyst with Bank of America in Moscow. “They [Summa] will need at least $1 billion to build this big network.”

Summa Telecom also announced last week a partnership with NextNet Wireless, a unit of Motorola that was acquired from Clearwire. However, details of the partnership were not disclosed, and NextNet was unavailable for comment on the announcement.

While Summa prepares its business plan, many established telecom operators in Russia are still waiting to be granted licenses for 2.5 GHz spectrum. Each of the main GSM networks have made applications to the GKRCh, and thus far, Vimpelcom and Megafon have been awarded only 3.5 GHz frequencies. According to published reports, only Comstar-UTS and Synterra have been awarded licenses for 2.5 GHz frequencies.