Nokia And YADRO Form A JV To Develop Telecommunication Network In Russia

Nokia develops telecommunications network in Russia, together with YADRO. (photo: doc. pixabay)

JAKARTA – Nokia and Russia's YADRO plan to form a joint venture to build 4G and 5G telecommunications base stations in Russia. The two makers of communications equipment said Wednesday, November 24, was the deadline to build a network using only the Russian equipment approach.

Russia has said it will extend telecom operators' licenses beyond 2023 for LTE networks (a long-term evolution) on the condition that they start building networks using only Russian equipment, part of a broader push by Moscow to promote domestic technology and IT services.

"We are pleased to partner with YADRO, a leading Russian developer and manufacturer of high-performance servers and storage systems to address the new localization regulatory framework," Finland-based Nokia told Reuters.

The two companies signed a worksheet on November 23, Nokia said, stating their intention to enter into good faith negotiations with the aim of creating a JV (joint venture) in Russia.

The two companies did not disclose the terms or planned investments. The daily Kommersant previously reported, citing a source, that YADRO will hold a 51% stake in the JV, with Nokia taking the remaining 49%.

Russia's Minister of Industry and Trade, Denis Manturov, said the agreement between the companies would see the development of telecommunications equipment in Russia, with construction scheduled to begin in December.

Russian manufacturers currently account for 21 percent of the country's 168 billion ruble (Rp32 trillion) procurement contracts for telecommunications equipment, Manturov said.

"The entire market is estimated at more than 400 billion rubles (Rp76 trillion), so we see quite a serious potential for the development of joint Russian and local projects," he added.

According to Kommersant, other foreign vendors, including Huawei, Ericsson, and ZTE, have also shown interest in localizing equipment.