Communications may soon become more expensive. The government wants to increase fees from operators to the universal service reserve, where they currently contribute 1.2% of revenue from communication services.
Last year, the reserve amounted to almost 14 billion rubles - a similar amount is budgeted annually for 2017–2019. Following a meeting with Deputy Prime Minister Dmitry Kozak, the relevant ministries were instructed to work on the issue of increasing operator contributions.
Denis Kuskov, General Director of the information and analytical agency TelecomDaily: “As for the government’s idea to increase fees for a universal communication service from operators, it seems to me that the government’s ideology is clear - in principle, there is no place else to get it from, because in many of us In each direction, taxes are collected more than once. Cellular operators work quite well, everyone has a cell phone, so taxes can be collected well, unlike, perhaps, some other taxes on property and transport, which are not always paid on time. But you need to understand that the cellular market, thanks to its competition and such, let’s say, non-interference of the state, has recently been actively coping with all the crises that have occurred in our country, and this increase, it seems to me, is completely wrong. Especially against the backdrop of the Yarovaya Law, adopted last year and still not in force, which also imposes a certain burden on operators. All this can once again lead to an increase in the price of cellular communication services, which, unlike other areas of business, such as, say, buckwheat or other food products, have never increased several times, but increased by 2-3% from year to year. "
How much can communications become more expensive after an increase in fees from operators? Opinion of leading analyst of Mobile Research Group Eldar Murtazin:
Operators have only one way to find money - take it from subscribers. In essence, this means an increase in tariffs. Rising tariffs slow down the development of networks and slow down the development of the economy. This is the last thing you need to do in Russia.
How much can they increase fees, and, accordingly, how much can our communications become more expensive?
Today we are talking about the fact that in 2017, communications prices will rise by about 25% on average. In 2018, the price increase will be up to 20%. If this fee is increased, today we can say that it will even be up to a 5% increase in tariffs. This is from what I voiced.
Gasoline prices will also rise. The Cabinet of Ministers approved an increase in excise taxes on fuel by 50 kopecks from January 1 and July 1, 2018. Additional budget revenues from this measure will amount to 55–60 billion rubles, experts say. Due to the increase in excise taxes, a liter of gasoline at retail may rise in price by 1.5%, or 60 kopecks.
The Moscow Department of Information Technologies (DIT) analyzed the pricing policy of operators in Moscow and found that over the six months (from August to January) tariffs only increased.
Five package tariffs increased by 6–22%, not a single one decreased, DIT said in a statement. The sets of services included in the package also changed. For example, Internet traffic changed for six tariffs: in three it decreased by 33–50%, in three others it increased by the same amount. The number of included minutes in three tariffs decreased by 9–16%, and in five it increased from 10 to 50%, DIT reported.
The department studied all the bulk tariffs of the Big Four operators that are available for connection. The study did not take into account specialized offers - for pensioners and migrants, tariffs for devices. DIT did not disclose which tariffs for which operators increased.
T2 RTK Holding (Tele2 brand) has not increased the prices of package tariffs over the past six months, assures its representative Konstantin Prokshin. This happened in the spring of 2016, but was accompanied by a proportional increase in the Internet and voice call minutes included in the package. With regard to VimpelCom, the conclusions are irrelevant, insists its representative Anna Aibasheva: the last time the current tariffs changed was in November, when the option of unlimited LTE appeared, but the price and included services did not change. Representatives of MTS and Megafon declined to comment. The DIT research methodology is not known, explains a Megafon representative.
DIT is observing a decrease in mobile traffic in package offers for the first time in two years of tariff monitoring: previously included traffic was growing steadily, says DIT analyst Evgeniy Alminov. He explains this phenomenon by operators preparing for increased traffic costs due to the adoption of the Yarovaya Law (anti-terrorism amendments requiring operators to store certain traffic).
Another reason – Tele2’s entry into the Moscow market – has already been won back and no longer affects the tariff policy of operators, Alminov continues. Finally, the rapid growth of mobile traffic has resulted in extreme load on networks.
The price increase is understandable: operators want to increase ARPU, says Raiffeisenbank analyst Sergei Libin. This figure has been falling over the past year due to tariffs with unlimited Internet, which operators became interested in after the release of Tele2, says Libin. Now you can only make money on the Internet, agrees Mobile Research Group analyst Sergei Potresov. Voice traffic is of no interest to anyone and operators want to earn more on smaller packages so that subscribers buy additional traffic, he argues. They have no other ways to increase revenue: unlimited tariffs are a dead end, Potresov is sure. Inflation also pushed for tariff increases, he adds.
If the price increase continues, it will most likely be hidden for subscribers: for example, a deterioration in the terms of the plan while maintaining the overall cost, Alminov argues. At the same time, the number of SMS and voice minutes may grow, while their demand is falling, he believes.
The government plans to increase contributions from mobile operators. This decision will lead to an increase in tariffs
Communications may soon become more expensive. The government wants to increase fees from operators to the universal service reserve, where they currently contribute 1.2% of revenue from communication services. As RBC writes, this is one of the options for fulfilling the order to support Crimea and the Kaliningrad region, for which it is necessary to find 165 billion rubles.
Last year, the reserve amounted to almost 14 billion rubles - a similar amount is budgeted annually for 2017-2019. Following a meeting with Deputy Prime Minister Dmitry Kozak, the relevant ministries were instructed to work on the issue of increasing operator contributions.
General Director of the information and analytical agency TelecomDaily“As for the government’s idea to increase fees for universal communication services from operators, it seems to me that the government’s ideology is clear - in principle, there is nowhere else to take from, because in many areas taxes are collected more than once. Cellular operators work quite well, everyone has a cell phone, so taxes can be collected well, unlike, perhaps, some other taxes on property and transport, which are not always paid on time. But you need to understand that the cellular market, thanks to its competition and such, let’s say, non-interference of the state, has recently been actively coping with all the crises that have occurred in our country, and this increase, it seems to me, is completely wrong. Especially against the backdrop of the Yarovaya Law, adopted last year and still not in force, which also imposes a certain burden on operators. All this can once again lead to an increase in the price of cellular communication services, which, unlike other areas of business, such as, say, buckwheat or other food products, have never increased several times, but increased by 2-3% from year to year. "
How much can communications become more expensive after an increase in fees from operators? Opinion in traveling Mobile Research Group analyst Eldar Murtazin:
— Operators have only one way to find money - take it from subscribers. In essence, this means an increase in tariffs. Rising tariffs slow down the development of networks and slow down the development of the economy. This is the last thing you need to do in Russia.
— How much can they increase fees, and, accordingly, how much can our communications become more expensive?
— Today we are talking about the fact that in 2017, communications prices will rise by about 25% on average. In 2018, the price increase will be up to 20%. If this fee is increased, today we can say that it will even be up to a 5% increase in tariffs. This is from what I voiced.
Gasoline prices will also rise. The Cabinet of Ministers approved an increase in excise taxes on fuel by 50 kopecks from January 1 and July 1, 2018. Additional budget revenues from this measure will amount to 55-60 billion rubles, experts say. Due to the increase in excise taxes, a liter of gasoline at retail may rise in price by 1.5%, or 60 kopecks.
According to the RSPP, the “Yarovaya package” will lead to this.
On July 1, 2018, the first requirements for cellular companies to preserve the information of their customers will come into force. On January 1, 2019, the so-called “Yarovaya Pact” will be fully operational.
The Russian Union of Industrialists and Entrepreneurs (RSPP) has calculated that, despite the latest clarifications from the Ministry of Telecom and Mass Communications, additional costs for market participants will increase to 10 trillion rubles per year. Telecom operators will have, as many experts believe, to raise tariffs for users by 2-3 times.
Last summer, President Vladimir Putin signed a law implementing a package of anti-terrorism amendments to a number of laws introduced by the head of the State Duma Security Committee Irina Yarovaya and member of the Federation Council Viktor Ozerov.
Since July 1, 2018, Internet companies are required to store information about the reception and transmission of data for at least one year, and telecom operators - for three years. In this case, text, voice, and video information will have to be stored for up to six months.
Recently, the Ministry of Telecom and Mass Communications sent to the Ministry of Economic Development a draft government resolution clarifying the application of new legislative norms. The latter agency will issue its conclusion at the end of April.
But it is already clear, according to estimates by the Ministry of Telecom and Mass Communications, that market participants will shell out up to 5 trillion rubles in additional expenses per year to implement the “Yarovaya package”. The state will force us to store huge amounts of information that are not needed by ordinary users.
The RSPP believes that 5 trillion is still seeds. Most likely, you will have to fork out the entire 10 trillion rubles.
Therefore, mobile operators warn that if the government does not help them through the federal budget, then tariffs for mobile communication services will have to be increased by 2-3 times. It is unlikely that most users will be able to handle this. As a result, especially in depressed regions, entire areas will find themselves without communications.
Moreover, as calculated by the Russian Union of Industrialists and Entrepreneurs, an increase in cellular communications costs will entail the entire chain of inflation, which will only increase by an additional 1-2%. That is, all the recent efforts of the Central Bank to limit price growth to 4% per annum will turn out to be meaningless.
“However, for security purposes, such a law is needed, especially given the growing terrorist threat,” says Anna Kokoreva, deputy director of the analytical department at Alpari. “This is also necessary for the citizens themselves, since if they receive threats by phone or other similar information, law enforcement officers will be able to retrieve this information and use it for investigation.
But there are also disadvantages. Increasing the volume and duration of information storage will entail considerable costs for operators. Ultimately, this will lead to an increase in communication tariffs and this burden will fall on the consumer.
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For ten whole years, prices for mobile Internet and communications in Russia, throughout the country, have been gradually falling. This was the case until approximately 2015, when, due to circumstances unknown to many, the cost of voice services and Internet traffic began to rise. At first it was difficult to notice, since the price tags jumped by only 5-10%, but it is already clear that minutes, megabytes and SMS messages have risen significantly in price.
There is a simple explanation for all this - the dollar exchange rate. Although the mobile operators MTS, MegaFon, Beeline and Tele2 operate in Russia, the cost of their services directly depends on the exchange rate. If the ruble is cheap on the world market, then prices will rise. For example, if the dollar suddenly rises in price to 120 rubles, then prices from Russian operators at first will be at the same level, but then they will start shaking out additional money from subscribers.
The whole secret is that Russian cellular operators need an infrastructure that allows them to provide subscribers with access to the Internet, voice services and SMS messages. Since all the equipment for these purposes is not produced in Russia, it is purchased, in most cases, for dollars. Accordingly, if the dollar exchange rate rises, then the purchase cost of equipment for data centers, base stations, highways and other elements of the global network increases.
Russian operators are striving to introduce the latest developments, for example, MegaFon and MTS for the 2018 FIFA World Cup. The most advanced equipment today, which is produced by Qualcomm, Nokia, Intel and other companies, costs a lot of money, and it is purchased for dollars, not Russian rubles.
Hence it turns out that mobile Internet and communications are becoming more expensive in Russia, since their prices almost directly depend on the dollar exchange rate. It is obvious that the operators MTS, MegaFon, Beeline and Tele2 cannot stop developing their coverage area and introducing new standards, since the latest technologies in smartphones, tablets and other devices require the most modern equipment.
So, for example, this summer in one of the cities of Russia, which subscribers of the MegaFon operator can already use. Ultimately, subscribers have to pay for all these things, and if tomorrow the dollar suddenly rises in price to 100 rubles, then prices for all services of cellular operators will soon begin to rise. This is the bitter truth about why mobile Internet and communications are becoming more expensive in Russia.
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