Russian LTE MVNO advantages likely to be short-lived

Fitch estimates that LTE revenues are likely to be comparable to the network fee floor set by Skartel. Assuming an MVNO operator with 200,000 subscribers in 2013 and 300,000 subscribers in 2014 generating an average ARPU of RUB600, which is more than twice as much as the current average mobile broadband ARPU, revenues would amount to approximately USD116m for two years, well below the USD170m MVNO fee floor. The assumed subscriber base does not look underestimated when compared to the current LTE subscriber base and announced plans by key operators. Megafon is planning to sign up 100,000 LTE subscribers by end-2012. Skartel estimates its current LTE subscriber base at 600,000, of which approximately a half is in the city of Moscow. //reuters.com

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