Publication: Monitor Volume: 1 Issue: 155

Foreign investments in Russia’s telecommunications sector are expected to grow by at least 24 percent to some $520 million next year compared with 1995, according to a statement from the Communications Ministry yesterday. The foreign investments will account for half of total investments in the sector next year, while state subsidies, including privileged loans, will continue to fall as a percent of the total. According to the ministry, next year the sector will lay another 1,815 kilometers of cable, and install 9,500 kilometers of wireless lines, some 5,000 long-distance exchanges and up to 1.5 million phone numbers in urban and rural areas. By the end of this year, it said, Russia will have installed some 26 million phone lines. (13)

The modest investment sums available thus far and planned by the ministry in future mean that the country’s telecommunications capability can improve only slowly. Most feasibility studies by commercial telecoms giants have concluded that many billions dollars need to be spent improving Russia’s existing networks and upgrading its switches for at least a decade, if much of the existing infrastructure is even salvageable. Attracting those billions will not be easy, since a veritable flood of other telecoms privatizations around the world has already created exceptionally tough competition for capital.

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