Leonid Reiman Issue: Europe I 2002
Article no.: 4
Topic: Building Russia’s Info-Communications Sector
Author: Leonid Reiman
Title: Minister of Communications and Informatization
Organisation: The Russian Federation
PDF size: 20KB

About author

Not available

 

Article abstract

The Russian Telecommunications sector, after impressive growth, needs growth, needs re-organization. Its postal and communications organizations will be merged into a single entity and many small, ineffective, enterprises, created by privatization, will be integrated into 7 companies controlled by Rostelecom, Russia’s long-distance opeartor. A program to upgrade existing satellite systems has begun and new satellites will be launched to improve broadcast quality.The “Electronic Russia 2002-2010” program, cooridanted by the Ministry of Communications, defines the development plans for Russian telecommunications.

 

Full Article

Russian telecommunications now provide a striking example of how balanced spending on technical and economic transformation can yield appreciable results. For the last two years, the policies of Russia’s President, and its Government, regarding the nation’s economic modernization have had a significant impact upon the development of telecommunication services, postal communications and information technologies. The statistics for these developments are impressive. Last year 37,400 km of microwave and cable networks were built, 2 million telephone numbers were put into operation and more than 1.4 million new fixed phones were installed. Development of local telephone networks based on modern digital automatic telephone exchanges has increased quality and expanded the telecommunication services spectrum. As a result, the Internet, ISDN and value-added network services have been made available to a broad audience of users. In 2001, the tenth anniversary of Russian cellular communication, the user base more than doubled and the number of subscribers increased to 7.8 million. Russian telecommunications are primarily concentrated in a few urban centres. Moscow has a larger telecommunications infrastructure than St. Petersburg, which in turn has more telecommunications available than the remaining regions of Russia. This imbalance resulted from the concentration of investments by cellular communication network operators for projects in the most promising markets. Cellular penetration in Moscow now exceeds 30 per cent, in St Petersburg. The largest mobile communications operators have significantly penetrated the markets of their basic service (fixed) competitors, increasing competition, consumer satisfaction, demand for service and development. As a result of the competitive struggle, the cost to subscribers of large cellular communication operators has dropped by 17-37 %. In the last few years, in addition to rendering traditional services, more than 80 new and additional postal services have been developed. These include bill paying services, accelerated remittances and mail order sales. The Russian Ministry of Communications has begun a large – scale project to provide public access to the Internet at federal post offices. To improve the quality and reliability of postal services and develop efficient controls, an interdepartmental working group has been formed. It is comprised of representatives of the Russian Ministry of Communications, the Ministry of Property and the Ministry of Economic Development. This group will re-organize the federal postal and communications agencies and centralize the management of the state mails within the framework of a single legal entity. This will increase the controllability and efficiency of the postal service. The centralization will also position it to compete effectively, attract clients, increase postal services, enhance income and create conditions to implement large-scale investment programmes to improve operational performance.This concept was approved by the Russian Federation in March 2002. The last two years were marked by the steady development of the information technology market. Last year, this market grew despite declining growth in the USA and Western Europe hi-tech sectors. The number of PCs in use increased by 10 per cent to 11 million in 2001; domestic PCs have increased as well. By the end of 2001 there were 7.5 home PCs per 100 inhabitants compared to 6.4 in 2000. Russian Internet usage revenues grew to $220 million in 2001 – an increase of 50 per cent compared to 2000. More than 12 million people now use the Internet. Privatisation of telecommunications in Russia has led to the creation of numerous, quite small, ineffective and non-competitive enterprises. To increase the functional efficiency of the traditional operating companies,7 integrated inter-regional companies were created by Rostelecom, Russia’s international and long-distance operating company. The economic consequences of the reforms have been analysed in detail and submitted to all of the system’s shareholders, both majority and minority, including the many foreign ones, for discussion. By their vote, the shareholders approved of the results of the reforms. Between 93 and 98 per cent of those at regional communication operators’ shareholders meetings, depending on the region, have approved the reforms that were carried out. Russia’s satellite communications have also been the subject of an emergency programme. Measures to support, preserve and complete existing systems have been taken and new measures for future development begun. New plans for satellite based communication and broadcasting provide for the update of Russia’s orbital groupings to accommodate the launch and commissioning of five new space vehicles. These will help resolve acute problems maintaining broadcast stability throughout all of the Russian Federation’s regions. The primary result of these efforts by the Russian Ministry of Communications and its collaborators in other federal ministries and departments was the development and approval of the ‘Electronic Russia 2002-2010’ programme. This programme defines the country’s goals for communications development. The Ministry of Communications, named by the Russian Government to coordinate the programme, will be responsible for its results. The Electronic Russia 2002-2010 programme has ambitious goals: For society as a whole: To promote equal rights for all citizens to the use and benefits of information; overcome the ‘digital divide’ and the delays in information and communications technologies (ICT) development in every region; provide for ample access to information throughout the country and expand the application of modern ICT in all spheres of public life. For the State: To increase the efficiency of self managed local government; create an electronic trading system for government purchases: and reduce management costs by strategies including staff reduction. For the Russian economy: To modernize the economic structure; create new opportunities for manufacturing growth and export of domestic hi-tech production; promote trade development; and increase the competitiveness of the domestic economy. For ICT sector businesses: To accelerate the rates of ICT sector development, activity and income growth; align Russian ICT technological standards to conform with international standards; and expand Russian participation in international ICT markets. For citizens: To improve standards of living and quality of life; increase the services and information available through the Internet; give citizens access to government information no matter where they live or travel; and provide means for citizens to consult expert, highly skilled medical, legal and other services. The Electronic Russia 2002-2002 program’tasks include: · Facilitating Russia’s entry into the global information community on a cooperative and transparent basis; · Bringing ICT in Russia up to the level of use and development found in other advanced countries · Opening the global information community to Russia’s citizens and treating the freedom to search, receive, transfer, produce and distribute information as a basic human right; · By 2005, multiplying information service and the software market volumes 2 to 3 times and, 5 to 6 times by 2010; · Increasing domestic production of ICT based goods and services, each year through 2005, at the rate of 15-20 per cent; · Increasing the volume of Russia’s ICT exports to 2 billion dollars by 2005. The combined efforts and resources of all sectors of the Russian Federation – the Federal and local governments, institutions, public associations, business, industry and citizens will be needed to make the Electronic Russia 2002-2010 a success. Development of Russia’s communication sector will also require: * Greater capitalization of, and investment in, the Russian communications market; * More effective use of the internal resources and reserves by the sector’s companies; * Implementation of an integrated network and technology investment policy; * Reducing conflicts between operators and the co-ordination of industry-wide improvement programmes; * Improved quality of service. These are just the most basic needs; the list is far from complete. There is an extensive list of consequences for each of these items that will need to be dealt with appropriately. Conclusion For Citizens to improve standards of living and quality of life; increase the services and information available through the internet; give citizens access to goverment information no matter where they live or ravel and provide means for citizens to consult experts, highly skilled medical, legal and other services” We are convinced, nevertheless, that the rate of Russia’s growth and development will continue to increase. The telecommunications service market in Russia is enormous. In the near future, once the needs of the Russian Federation’s network modernization are fully dimensioned, there will be a huge demand for new equipment and advanced applications. Fortunately, the Russian communications sector can count, domestically, upon the existence of significant, advanced, scientific and technological ability in many key areas. This is already being put to use creating favourable conditions for business, finding effective ways to solve specific problems and driving the steady development of the sector within the market economy.