Russian Digital Ministry Proposes Turnover Fines for Telecom Operators Without SORM

The Russian Ministry of Digital Development (MinTsifry) has proposed introducing turnover-based fines for telecom operators that fail to implement SORM (System for Operative Investigative Activities). The ministry has prepared three amendment packages to the Tax Code, the Administrative Offenses Code, and the Law “On Communications,” as reported on the ministry’s official Telegram channel.

Key Proposed Changes

• Increased License Fees: Amendments to the Tax Code propose raising the state fee for nine types of telecom service licenses from 7,500 rubles to 1 million rubles.
• Turnover-Based Fines: The second document introduces a turnover-based fine for operators lacking SORM systems. The proposed fine ranges from 0.01% to 0.05% of annual telecom service revenue, but not more than 0.02% of total annual revenue from all goods and services, and not less than 1 million rubles. The ministry is also considering issuing a warning for the first offense.
• FSB Network Approval: The third amendment requires telecom operators to get their network design approved by the FSB before obtaining a license. Previously, operators received a license first and then had 45 days to set up their networks and install SORM equipment.

Rationale and Impact

According to the ministry, the high license cost will act as a deterrent for violators and protect citizens from questionable services. The current low state fee allows unscrupulous operators to avoid penalties by simply relinquishing their licenses and easily obtaining new ones. The new rules will only apply to new operators; existing license holders will renew under the old terms for 750 rubles. Licenses are valid for up to five years.

SORM is a system that telecom operators are required to install on their networks per FSB regulations. This equipment allows Russian law enforcement to access phone calls, SMS, and internet traffic of subscribers. The ministry stated, “The equipment must be installed on every operator’s network, but small operators often cut costs and avoid implementing SORM. While we consider market interests, there can be no compromise on security.”

The ministry believes that requiring FSB approval of network designs will allow SORM implementation to begin at the licensing stage, rather than after the fact. “All new telecom operators will enter the market with SORM already installed. When renewing licenses, operators will also be required to have these systems,” the ministry explained.

Industry Reactions

Philipp Kulin, creator of “Escher II,” commented, “Now, telecom licenses will be unaffordable for small businesses.” He also questioned the definition of one of the nine licenses—telematic communication services—saying, “I’ve been in telecom for 20 years and still don’t know what exactly that is, yet now they want a million for it.”

Nikita Danilov, a lecturer at Moscow Digital School, believes the changes won’t significantly affect large federal operators, as they already comply with requirements. However, the increased license cost and turnover fines could drive local operators out of the market.

Dmitry Petrov, CEO of telecom operator Komfortel, said the changes will primarily impact providers who cannot afford to spend millions on SORM installation: “It’s easier for them to keep reapplying for licenses.” He estimates there are 3,000–5,000 such companies in Russia, and the new rules will force them to sell or close their businesses.

Tele2 considers the idea of turnover-based fines for SORM violations excessive, especially since it’s not the industry’s main problem.

Dmitry Galushko, CEO of OrderCom, said the cost of SORM installation is unaffordable for small operators, and the new requirements will “effectively kill telecom startups.” He also noted that the need for FSB network approval will further hinder business development.

Alexander Zhuravlev, managing partner at EBR law firm, agrees that turnover-based fines for SORM violations are controversial: “This decision will spark debate about the costs operators face in implementing SORM.”