Minsk and Managua to get 4G before Manchester

By Maija Palmer, technology correspondent

While mobile phone operators in Western Europe deliberate over when and how they are going to roll out the next generation of super-fast, 4G mobile broadband services, Russian start-up Yota is quietly rolling out these advanced networks across a number of emerging markets.

Ironically, it could mean that within a few years, users will get a better and faster iPhone connection in Minsk or Managua than they will in Manchester.

Western mobile phone operators are still burdened by their existing network investments, especially the expensive 3G mobile licences they bought ten years ago, and are hesitant about cannibalising their existing services by moving too soon into new technologies. Companies like Yota have none of this baggage.

Yota, which is is backed by a Russian state technology company and Telconet Capital, a venture capital fund, has invested $400m to date on launching a 4G broadband network in five Russian cities, including Moscow and St Petersburg.

For $30 a month or $3 a day, subscribers can get a very fast wireless broadband connection for their laptop or mobile phone. It boasts of speeds of up to 10 megabits per second, while the UK is still struggling to roll out broadband services of 2 megabits per second to certain parts of the country.

Yota has close to 600,000 subscribers a month in Russia, and had revenues of $59m in the first six months of the financial year. It is already profitable before interest, tax, depreciation and amortisation.

Emboldened by this domestic success, its now planning to expand internationally - mainly into Eastern Europe and Latin America. It has just begun operations in Nicaragua, and is building networks in Belarus and Peru.

Dennis Sverdlov, chief executive, said another two or three countries could be added each year. These are all likely to be in emerging markets, where fixed line internet connections are still scanty and mobile phone services are basic. There is little competition in these places, and rather than charging sky-high prices for radio spectrum licences for these new services, governments are generally welcoming anyone who will come in to build internet infrastructure.

Developed western markets, with their dominant incumbent telecoms operators and fierce infighting over market share hold little appeal for Yota. But western countries will have to watch out that this doesn't mean the next telecoms revolution simply passes them by.


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