Report: Data retention law may push small operators out of market

MOSCOW, Jun 2 (PRIME) -- Application of the data retention law in Russia could push small fixed-line operators out of the market since they would find required expenses unbearable, Sergei Soldatenkov, general director of big mobile operator MegaFon, said late on Thursday in an interview with the Kommersant FM radio station.

“As to the mobile market, I don’t think much will change here, because there are four top players, and they are sustainable,” Soldatenkov said referring to MTS, MegaFon, VimpelCom, and T2 RTK Holding.

“When it comes to fixed-line operators, perhaps several small ones will be forced to leave the market, because they’d find it impossible to financially exist. It can happen. It’s a huge load for operators. Major corporations will survive somehow, but minor ones would quit.”

The data retention law, signed by President Vladimir Putin in July 2016, obliges connection operators and Internet companies to store information on content of users’ talks and correspondence for up to six months from July 1, 2018. The government will decide in June on the parameters of time and types of data to be stored.

Soldatenkov said that mobile operators will not be able to finance their further development if they have to keep data fully.

“Very fierce competition proves that our market does not rise in money any more. MegaFon had zero growth as well as our colleagues rivals did. That’s why we understand that if we completely follow the law, we won’t have money for development,” the executive said.

“Our suggestion as an operator: if the government sets such a task for us, we’re ready to share 1% of revenue, which will go to a special fund to create a similar storage system. But if there is not enough money, the government should help to settle the issue.”

In other countries where such initiatives were implemented, an additional tax was added to tariffs for subscribers. “It could be an increase in costs by 2–3%. We believe, it won’t impact the whole market, but it will enable to fulfil the law,” Soldatenkov said.

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