The country’s top cellular phone service carriers were finally given the necessary airwave frequencies to run 3G commercial operations in Moscow and the Moscow oblast. Currently, 3G reception is limited to indoor users.

Service operators can nevertheless conduct actual 3G tests before expanding the reception availability to outdoor areas as well. Moscow’s consumer base offers good prospects for providers to extend 3G coverage in the city. Still, installing the network can prove to be difficult in the next few years as a result of frequency problems.  

The leading Russian carriers, MTS, MegaFon, and VimpelCom acquired permits to run 3G services in Russia more than two years ago. In a number of Russian regions the broadcast and reception facilities essential to the operation of 3G networks have already been set up. The issue with Moscow is that the frequencies in the 2.1 GHz range are being actively used by the Russian military, as well as other security services.

In May of 2009, providers were granted frequencies for offering 3G services in the capital city, with operations limited to indoor areas only. In the Moscow oblast, outside the 100-km zone around the city, 3G networks can have outdoor coverage.

The new frequency distributions will make it possible for MTS, VimpelCom, and MegaFon to comply with Russia’s regulations mandating that the carriers begin coverage in all Russian region by November 2009. Moscow was the only city in Russia presenting problems with regard to frequency allocations. The installation of even a limited 3G network in Moscow will present great advantages to mobile operators. 

According to Maxim Savvatin of iKS-Consulting, with indoor operations the mobile service carriers will have an opportunity to test out the 3G network in Moscow before a possible expansion to other parts of the city. Still, predicting the level of demand for 3G in the Moscow subway and indoors is not easy because indoor users can establish an Internet connection through an ordinary computer network or a Wi-Fi adapter.

Sergei Polovnikov of Advanced Communications and Media believes that 3G will not be able to compete with indoor Internet service providers in the Russian capital. Users generally need internet access from a mobile device when they are outdoors.

On the other hand, 3G would be able to sustain competition with WiMAX in Russia. Close to a fifth of mobile devices used in the country support 3G technology, while WiMAX devices are still relatively rare.

Advanced Communications and Media reported that the number of 3G subscribers in Moscow was 3.209 million customers in March 2009. In view of the estimated number of 3G handsets, the number of potential future users of the new network in Moscow could be 6.4 million.

Spokesmen of VimpelCom and MTS have announced in May that the companies concluded the tests of 3G facilities broadcasting signals to outdoor areas in Moscow. All that remains before the full-scale launch of the network is a regulatory decision. MegaFon has made an announcement that it will begin providing 3G coverage in October or November of this year.

At the same time, industry experts think that full implementation of 3G in the Russian capital may be delayed by several years, at least until the problems with frequencies are resolved. To provide 3G access for the entire city, operators would require using more than 1 500 stations. Currently, MTS has authorization to provide 3G services through only 35 indoor stations and 18 stations in the Moscow subway system.

Since the availability of frequencies in the 2.1-GHz spectrum is limited, service providers are actively exploring possible alternatives. So far, MTS and VimpelCom have conducted tests of the 900-MHz and 1800-MHz spectrums, which are being utilized for GSM services. These frequencies, technical analysts argue, are even better for running a 3G network than the 2.1-GHz spectrum. Since GSM signals interfere with a 3G network, however, the use of the alternative spectrums will not be viable in the city of Moscow.

In these circumstances, the best avenue for mobile service providers to take would be to engage in negotiations with military officials and to obtain permission for using the frequencies needed for 3G.