FOCUS: Moscow to move state staff to local OS to shield info from leaks

By Yekaterina Yezhova

MOSCOW, Sep 17 (PRIME) -- Russia’s intention to switch state employees to local operating system Sailfish Mobile OS Rus from foreign ones, no matter how costly it may be, does make sense in the situation when information security is extremely important. Sailfish’s major shareholder Rostelecom and local app developers will enjoy the initiative most, analysts said, adding that the U.S. is pursuing the same protective policy.

“The upside is clear: if the political climate turns sour, then sanctions can be applied to anything, including Android updates. The situation when work of Russian state entities can be suspended upon a move of the U.S. Congress or Senate would bring a colossal blow to the Russian economy. Such risks should be hedged against,” analyst at group of companies Finam Leonid Delitsyn told PRIME.

Investment company Freedom Finance analyst Valery Bezuglov also said that elaboration of own operating system is essential in the conditions of sanction pressure on Moscow because Western analogues have revealed vulnerabilities many times, which meant leakage of information and its further use for various purposes of a manufacturer.

Russian authorities are rumored to spend 160.2 billion rubles on switching 7.9 million employees of state authorities, state entities, and companies with the government among shareholders to Sailfish during the period of 2019–2021.

Of the total expenses, the federal budget will contribute 71.3 billion rubles, state companies will give 78.2 billion rubles, and local budgets will secure 10.7 billion rubles.

The Finance Ministry was also reported to have been asked for an extra 2.3 billion rubles to complete the creation of the operating system.

Sailfish was first designed by Finnish firm Jolla with former Nokia employees on board. It became known in 2015 that Grigory Beryozkin, founder of holding ESN, became a major shareholder of Jolla. He owned 80% of Votron, the holder of Open Mobile Platform, which adapted Sailfish for Russia, while 20% were held by ESN’s former head Mikhail Verozub.

Rostelecom signed contracts in early March to acquire 75% in Open Mobile Platform and 75% in firm Votron, securing a controlling stake in the mobile system developer.

On September 11, Rostelecom President Mikhail Oseyevsky said the operator had applied to the Federal Intellectual Property Service to rebrand the operating system and expects to get an approval by the end of September without mentioning the new name.

“The decision would benefit not only Rostelecom, but also local developers who would be commissioned to create applications for Sailfish,” Delitsyn at Finam said.

Media reported that an annual tariff for an overall service with the use of Sailfish-run smartphones will be 13,100 rubles per person.

“It’s now known that Russian Post purchased 15,000 devices working on Sailfish for 171.1 million rubles. Consequently, this modification of the smartphone costs 11,400 rubles, but the price can significantly differ for other entities depending on target functions. The sale of 8 million devices can reach some 91.3 billion rubles in 2019–2021,” Bezuglov at Freedom Finance said.

“At present, Chinese smartphone Inoi R7 works on the Russian operating system, but we don’t rule out that the range can involve other manufacturers.”

The operating system can be fairly interesting to the corporate sector with a potential audience of at least 10 million devices. In this case, a positive effect on the telecom business will be even deeper, Bezuglov said.

Head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said on September 12 the fund is interested in Sailfish, but looks on other market participants as well.

Washington also tends to protect local technologies to safeguard information. “In August, the Democratic National Committee (DNC) called to participants of November primaries to stop exploiting smartphones of China’s ZTE and Huawei, regardless of their prices. We can be 100% sure that smartphones of other Chinese or Russian manufacturers will not replace these devices,” Delitsyn at Finam said.

“For the party, it’s not a matter of saving money, but of what other political secrets hackers would expose into the Web. The recommendation to reject Chinese devices originated from the information security service, not from economists or financiers,” Delitsyn said.

“In June, the U.S. Senate voted for a seven-year ban for American companies to deliver components and technologies to ZTE. It was done under the pretext of anti-espionage. Moving state and party staff to information and communications technologies of local manufacturers is done today by all who has resources.”

(68.2826 rubles – U.S. $1)

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