ACRA: Operators’ capex on 5G to exceed 1 tln rbl in 2021–2027

MOSCOW, Jan 20 (PRIME) -- Capital expenditures of Russian mobile operators on development of 5G networks may exceed 1 trillion rubles in 2021–2027, which may translate into a negative free cash flow (FCF) and smaller dividends, the Analytical Credit Rating Agency (ACRA) said on Wednesday.

“The main driver of operators’ capital expenditures in the next few years will be the roll-out of 5G networks. According to ACRA’s calculations, based on the currently available information, total investment in development of 5G in Russia may amount to 1 to 1.1 trillion rubles from 2021 to 2027,” the agency said in a research.

“A significant rise of capital expenditures, in its turn, may result in negative FCF and a decrease in dividend payments.”

The agency said that prospects of 5G development in the country are still uncertain because of the absence of a decision on allocation of frequencies, understanding on what frequencies 5G will evolve and the suggestions on the use of exclusively Russian equipment. These factors are crucial in sizing up the needed money and terms of implementation of the new technology.

If 5G is rolled out on the 4.80–4.99 GHz frequencies, capital expenditures will be higher because of higher density and power consumption as well as rising prices of equipment, because most of the suppliers manufacture devices for the use on other frequencies, more widely spread on the global scale.

ACRA expects the country to start introducing 5G from 2024 actively, but the terms may be delayed over insufficient demand.

(73.7243 rubles – U.S. $1)

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