Small Providers Warn of Internet Collapse in Rural Areas

Installation of SORM and TSPU will inflate costs for small telecom operators by 5-10 times

The Ural Association of Communication Operators (UralAOS) sent an open letter to Vladimir Putin, Mikhail Mishustin, and the Prosecutor General demanding a suspension of the reform of the "On Communications" law. As the Telegram channel "Vecherniye Vedomosti" found out, small market players fear that a sharp increase in charter capital requirements will push several thousand companies out of the market and destroy the internet in small settlements.

The Ministry of Digital Development proposes to reduce 20 types of licenses to three levels and simultaneously raises the entry threshold: for new licenses, the range from 5 million to 1 billion rubles is being discussed. The association calculated that operators' expenses for complying with regulations, including the mandatory installation of SORM and TSPU, will increase by 5–10 times.

Currently, a communication license turns out to be dozens of times more expensive than an alcohol license, although a telecom company must first build a network and purchase expensive equipment, the letter states.

The main blow will fall on rural areas and remote settlements, where small operators are often the only providers. Federal players do not go there due to low profitability, and mobile internet is technically and regulatorily limited. If regional companies leave, their subscribers will be forced to switch to large operators, who are already refusing connections due to a lack of technical capacity.

In addition to rising tariffs and reduced competition, the market expects a decrease in demand for domestic equipment and software. If thousands of operators close, Russian developers will lose key customers, which will play into the hands of foreign suppliers.

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