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Tele2 CEO sees no chance of getting 3G licence in Russia

Swedish telco runs limited data services on an EDGE network; legislation has prevented it from obtaining 3G concession.

Swedish telecommunications firm Tele2 AB sees no chance of getting 3G data traffic licenses in Russia, Chief Executive Mats Granryd told Dow Jones Newswires in an interview.

"There seems to be no chance to get 3G licenses in Russia," Granryd said.

Tele2, which published its fourth-quarter report on Tuesday, has been active in Russia for 15 years. The market has been one of the company's main growth engines.

However, Tele2 only has licenses in Russia for GSM--offering low-speed data traffic--and the growing importance of mobile data on the market is a becoming a problem for the company.

Russian authorities view telecommunications as a strategically significant industry for its defense, and have imposed legislation on foreign firms that has prevented Tele2 from acquiring 3G licenses.

Tele2 currently only offers data traffic based on Edge-technology, which is an enhancement of its existing GSM technology.

"Even though we're not offering 3G data services in Russia, our data traffic grew 8.5% over the year in the fourth quarter. I think this proves that our data offering in Russia is still attractive," Granryd said.

Despite being unable to get 3G licenses, Granryd said Tele2 hopes to be able to provide long-term evolution, or 4G, data services in Russia.

The company could participate in an upcoming 4G license auction for the 800 megahertz spectrum frequency, or re-farm part of the 1,800 MHz spectrum frequency that is currently used for GSM to high-speed 4G data traffic, he said.

According to Granryd, voice traffic will remain important in Russia in the years to come. However, data traffic eventually will take over as the main service provided by operators.

"We are in Russia to stay. We have been on the market for 15 years and we will work extremely hard to obtain a data traffic service," he said.

At 0812 GMT, shares in Tele2 traded 2.8% lower at SEK130.60.