4G battle heats up

With consumers just coming to terms with 3G, telecoms are looking at the next generation technology, with military concerns and profitability questions still unanswered.

The military says the operators are going a bit too fast, and haven’t used all the resources available for 3G technology. So there’s no need, they say, to be asking for access to 4G frequencies

Nikolay Tamodin, General Director at Voentelecom believes, however, that some companies themselves have little interest if 3G is yet to show a return on investment.

“From today’s point of view, it’s nonsense, but it’s the truth. The current operators are not interested in the development of this technology because the previous one, 3G, which has just been built, hasn’t paid for itself yet.”

However analysts like Alex Kazbegi from telecoms research at Renaissance Capital, believe companies need it for survival.

“If you’re not in the game you’ll be marginalized by the players who have this technology. Inevitably your service level will show you have wrong technology. It’ll either be speed, capacity or the ability to provide the services. The game now is you need to have it."

Figures provided by VimpelCom, one of Russia’s top three mobile operators, suggest how little the previous, third generation technology is used.

“According to our information, about 13 per cent of our subscribers use phones which support 3G technology in Russia I mean. The relevant figure in Moscow is over 17 per cent,” says Vimpelcom press-secretary Anna Aybasheva.

However, another mobile operator from the so-called big three, Megafon, claims that what you sow today, you will reap tomorrow.

“Data communications is growing rapidly. Investments in the mobile Internet sector have the fastest rate of return. This is a global trend. This will lead to growing profits from data communication in the next few years. And the portion of profits from mobile Internet will begin to dominate in the earnings of mobile operators,” Megafon COO, Valery Ermakov says.

One thing is for sure – and it’s a global trend – competition is only causing the cost of data communications to get cheaper.