Mobile Operators Increase Prices Due to the Yarovaya Law
Russian mobile operators are raising their service prices, citing the implementation of the so-called Yarovaya Law as a key reason. MegaFon will increase the cost of its legacy plans starting January 13, while VimpelCom (Beeline) will follow suit on January 16. According to MegaFon, the price hike is due to increased demand for their services, and they note that only a small portion of subscribers will be affected. VimpelCom, on the other hand, attributes the increase to the costs of complying with Russian legal requirements and the rapid development of their infrastructure.
MTS and Tele2 have not yet commented on the possibility of raising their tariffs.
According to the analytical agency Content Review, price increases for mobile services in the coming year are inevitable. This is largely due to the expenses associated with implementing the Yarovaya Law and the law on a stable Runet. Experts predict that mobile service prices in Russia could rise by 17-18% in 2020.
What Is the Yarovaya Law?
The anti-terrorism legislation package, commonly known as the Yarovaya Law, came into effect on July 1, 2018. Among other requirements, it obliges telecom operators and internet companies to store information about users’ conversations and correspondence. This necessitates significant investment in new equipment. For example, MTS estimated these costs at 60 billion rubles over five years (later reducing the figure to 50 billion), VimpelCom at 45 billion, and MegaFon at 40 billion rubles.
Industry Response and Government Support
In October of last year, MTS, Rostelecom, VimpelCom, MegaFon, and the non-profit organization Digital Economy asked the government to subsidize the costs of purchasing the required equipment. However, the Ministry of Digital Development deemed the request inappropriate.
In December, it was reported that, to comply with the Yarovaya Law, telecom operators purchased data storage equipment worth 10 billion rubles from the state corporation Rostec. This equipment is part of the Kupol data storage system.