MegaFon is at the end of the process of development LTE TDD network in Moscow. Regulator (Roscomnadzor) already issued its permission. We can expect start of services Sep.1, 2012.
There are "few hundreds of TD LTE base stations installed" in the Megafon network in Moscow, as company representative told me. Company will use band 38 (2.5-2.6 GHz).
New network will be good addition to the existing Scartel's LTE FDD network, which is in the same holding with Megafon. That means, that subscribers to Megafon MVNO service will be able to get better coverage and service. The dongle Huawei E398 (RUR1990), which is the only LTE modem for the Megafon LTE customers at the moment is able to support both FDD and TDD networks and 3G/2G as well. Tablet Samsung Galaxy Tab 8.9 LTE which is second of two Megafon's LTE user devices does not support TD-LTE.
In February 2012, Megafon entered into a mobile virtual network operator (MVNO) agreement with Scartel LLC, a related party of the Company since July 2012, which operates under the Yota brand. for the joint development and provision of 4G/LTE services in Russia.
The MVNO agreement enables the Company to provide 4G/LTE services to its customers using the network of Scartel and enables Scartel to use network infrastructure of MegaFon to provide voice services to its customers.
In March and April 2012, the Company prepaid Scartel an aggregate amount of $50 million (1,641 at the exchange rate as of June 30,2012) for the provision of future interconnection servives under MVNO agreement. The amount of the advance was included in prepaid expenses in the accompanying consolidated balance sheets as at June 30, 2012.
(Yota is the trade mark of Scartel).