Russian airlines begin to provide in-flight wireless services to passengers.

Cell phone calls from Russian airliners and mobile Internet service aboard those planes will soon be commonly available in Russia. At the same time, the services are not likely to be of great popularity with the passengers at least initially – due to the high cost and the need to have special equipment.

In Europe, in-flight mobile services have been available for quite some time. Russia’s state-owned air carrier Aeroflot Russian Airlines announced plans to provide wireless communication services on its flights in September of 2009. According to industry analysts, there is no substantial incentive for companies to provide additional services to passengers, as the ability to have wireless Internet access and make cell phone calls is unlikely to create an increase in passenger traffic. At the same time, companies that decide to offer extra services will be able to enhance their business image.

Understandably, mobile services will be mostly used by first-class and business-class passengers, as only those people would be able to afford the extra cost. Moreover, some analysts are concerned that the costs of installing wireless capabilities on aircrafts may affect the overall cost of tickets even for those passengers not actually using the service. In today’s Russian market of air travel, price is key to successful competition. The cost and the popularity of mobile services will depend on the type of recoupment strategy that the companies would espouse.

Average prices mobile carriers would charge for in-flight voice and data services are likely to be higher than the cost of the same services on the ground. The Russian mobile market is likely to handle these services in the same way that operators in Europe and the Middle East have done. In the E.U., for example, a mobile call costs close to RUR 25 per minute, and a text message charge is RUR 6.

Even though these prices are higher than the typical roaming fees that Russian mobile operators charge, they are less expensive than international roaming rates.       

The cost of in-flight services are traditionally higher because of the expenses associated with installing mobile base stations that would connect telephones used on the plane with the ground through a satellite. The devices may cost as much as several hundred thousand dollars and would require periodic adjustment and maintenance. The unavailability of free radio frequencies used for mobile communications in all parts of Russia could also hinder the development of the service.

Regulatory changes would also be required in order to make the service possible. As is from time to time the case, the government is slow to respond to the developments of new markets and technologies. In any course of events, it will be necessary to allocate the licenses for mobile operators that would provide in-flight services. One more legal issue would concern the determination of roaming areas. The lack of clarity in establishing whether a call was made from a roaming zone during flight could be remedied with the creation of unique mobile service providers that would specialize exclusively in in-flight services. The European approach of addressing this issue could serve as a model in Russia.