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Authorities should cease using these operators as sources for donations.

Operators' representatives express concerns over funding shortages for network maintenance. They urge authorities to cease exploiting the industry for funding diverse projects and highlight the decline in service quality.

,   and  Administrator
3 min read
Authorities are being petitioned by operators to cease utilizing them as donors.
Authorities are being petitioned by operators to cease utilizing them as donors.

Authorities should cease using these operators as sources for donations.

Revamped Rant:

Cryin' Over Spilt Tea, Telecom Operators Slam High Taxes at St. Pete Forum

Now here's a whopper! Last weekend at the St. Petersburg International Economic Forum's IT breakfast, a bunch of telecom operators flipped a fit when they faced the Minister of Digital Development, Maxim Shadayev.

"Listen here, buddy!" says Andrei Kuzayev, the big cheese of "ER-Telecom Holding". "We got a whole mess of infrastructure built over the years, but it ain't for sake of progress, no sir! This infrastructure's just here to prop up elections! We cycle through them election to election, and what do you know? In our biz, the tax and debt burden has tripled, profits cut in half, and nobody's gonna put a dime in our biz!"

He pointed his finger at the increased contributions to the universal service reserve fund—a thick wallet to which all operators have to drop 2% of their telecom revenue, up from 1.2%. Kuzayev reckons it's almost doubled, leaving telecom companies with a heavy financial burden.

According to him, a decade ago, the evaluator looked at them 10 times more than their good ol' EBITDA, but now it's only three times. He's worried if we don't make some changes, IT services and IT companies won't be able to connect the whole nation.

Kuzayev pleaded with Shadayev to ensure the telecom industry doesn't go to pot, claiming that international rankings show a drop in connection quality in Russia. "But no one gives a damn! They claim it's enemy propaganda, deliberately putting us in a bad light," he snapped.

Alexander Panikov, the boss of "VimpelCom" (a.k.a. "BeeLine"), spoke of similar concerns regarding funding. "There's a strategy plan for the development of the communications industry until 2035, and issues related to the fight against fraud," Panikov explained. "Unfortunately, together with general problems related to increased tax burden and increased contributions to the universal service fund, there are trends where lawmakers view operators as cash cows for their projects."

He cited instances such as a banking bill that suggests operators should compensate citizens for phone scams and fees for access to e-government infrastructure. The list goes on with talks about businesses shouldting operators for mandatory call marking coming from September 1.

Panikov urged the Minister and the crew gathered at the breakfast—including the head of the Presidential Administration's Department for the Development of Information and Communication Technologies and Infrastructure, Tatiana Matveeva, and the head of the State Duma Committee on Information Policy, Information Technology and Communications, Sergei Boяrский—to hear the operators' woes and not add to the financial strain.

"Every ruble we spend on new red tape is a ruble missing from our investment programs for network construction and maintenance," Panikov concluded.

Vladimir Mesropyan, the Director of Government Relations at Megafon, said telecom companies' investments in fixed capital have remained stagnant for the past eight years while rising 180% on average in the economy.

"Now we're discussing how to keep CAPEX at last year's level. We could talk every year about growing coverage or the industry's share in the economy, which has been falling for 15 years," says Mesropyan. He also highlighted that operators should provide connectivity everywhere, all the time, but telecom services are not treated as a basic social service like water and electricity. "No country would dream of taking a single ruble from water and electricity for other interests when considering legislative decisions," says Mesropyan.

In response, Shadayev maintained that connection quality isn't deteriorating; it ain't getting worse. "We may not be keepin' up with the pace we'd like, but that ain't it," said the Minister. He acknowledged that telecom is indeed a basic industry, like energy and utilities. "The industry is fiercely competitive and crawlin' with competitors, so tariffs can't be adjusted, and profits ain't growin'," said Shadayev. He also agreed that businesses should compensate operators for call marking and free access to the interdepartmental electronic interaction system in cases where it's necessary to comply with laws.

So, there you have it—the telecom industry's complainin' about increased taxes led by new government policies and stricter enforcement, cutting into their profits. Industry bigwigs worry it'll hinder the advancement of connectivity infrastructure and services in the country. Ain't that a kick in the teeth for us consumers?

  1. The telecom operators, including Andrei Kuzayev from ER-Telecom Holding, Alexander Panikov from VimpelCom, and Vladimir Mesropyan from Megafon, expressed concerns that increasing contributions to the universal service reserve fund and higher taxes are causing a significant financial burden on the telecom industry, potentially hindering the advancement of connectivity infrastructure and services.
  2. The telecom industry leaders, such as Kuzayev, Panikov, and Mesropyan, highlighted that the financial strain due to increased taxes and contributions is affecting their investment plans for network construction and maintenance, which could impact the overall quality and coverage of telecom services in the country.

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