Russia considers tightening telecom licensing rules, critics say the move would reduce competition and raise prices

Russia’s Digital Development Ministry is in talks with industry players about tightening the rules governing telecom operators, two sources familiar with officials at the relevant agencies told Izvestia. One of them said the proposals remain at a preliminary stage.

The measures under discussion would introduce three categories of licenses, with fees ranging from one million to 50 million rubles depending on the category. They would also ban the issuance of licenses to sole proprietors; allow operators to be stripped of their licenses without a court ruling for a second serious violation, with the company’s beneficial owners barred from obtaining a new license for 10 years; require companies to have a minimum authorized capital of five million to 100 million rubles depending on the license type; and prohibit companies from beginning to provide telecom services until they have connected to the SORM surveillance system.

The ministry confirmed to Izvestia that it is discussing with businesses and relevant agencies initiatives aimed at combating unscrupulous telecom operators. The proposals had been well received by the industry, the ministry’s press service said, though no concrete decisions had been made.

The ministry believes the measures, if adopted, would improve the quality and availability of telecom services and leave only “reliable” operators in the market.

Alkhas Mirzabekov, head of the Moscow-based operator ESK, said the proposed measures would, among other things, reduce the number of small telecom companies, consolidate the market, weaken competition, and push up prices for home internet and pay television.

Leonid Konik, a partner at ComNews Research, said aggressively thinning out the number of telecom operators through heavy-handed regulation would hurt everyone — consumers most of all, who would face higher prices and reduced geographic availability of telecom services.

In recent days, Russian authorities have proposed several initiatives to tighten control over the internet. The Digital Development Ministry put forward measures targeting people who try to circumvent online restrictions, including charging for mobile traffic when a VPN is in use and blocking access to Russian services for anyone using tools to bypass restrictions.