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Coronavirus may delay Russia’s 5G networks

Development of 5G in Russia may be delayed by several years if the state funding for 2020 is reduced by 50%, Russian state corporation Rostec said in correspondence with the Ministry of Communications.

A representative of the ministry confirmed its content, noting that the budget is still being adjusted. Saved funds would be used to support people and businesses in the current pandemic conditions and economic situation, a person familiar with the government’s plans told the newspaper.

Funding cuts will affect the budget allocated for the development of 5G communications the most: it would decrease by 1.9 bln rubles ($26.95 mln).

According to Rostec’s estimates, if subsidies are postponed to a later date, then by 2024 the state corporation will be able to set up only 5,000 base stations as opposed to the planned 20,000.

It is not unreasonable to assume that Rostec will not be able to achieve its goals in the planned timeframe should funding be halved, Managing Partner at AC&M Consulting Mikhail Alekseev told Vedomosti. In addition, Rostec will have to compete with global manufacturers, such as Huawei or Ericsson, which produce base stations more efficiently and cheaper due to the scale of their business, he added.

Reducing funding could certainly affect the launch of 5G networks and related services needed by a wide range of industries, a representative of Rostelecom told the newspaper. However, according to the source, frequency permits remain the main issue yet to be resolved.

Source: Vedomosti RUSSIA