Minister of Telecom and Mass Communications Made a Speech on the “Government Hour” in the State Council
Министерство цифрового развития, связи и массовых коммуникаций Российской Федерации

Minister of Telecom and Mass Communications Made a Speech on the “Government Hour” in the State Council

Moscow, November 19, 2014. — Nikolay Nikiforov, Minister of Telecom and Mass Communications, made a speech on development of information technologies and telecommunications services on the “government hour” in the State Council.

“Dear members of the State Council, colleagues!

The modern world is a world of information technologies and means of communication. Their functioning is closely connected with the operating of communication bands and, first of all, with the Internet. Modern technologies unite society and contribute to solution of complicated economic problems. Development of telecommunication equipment of new standards allows decreasing costs and increasing quality of provided services. Increase of penetration of high-speed Internet access by 10% creates potential for GDP growth by 1.5%.

Ministry of Telecom and Mass Communications contributes to development and availability of telecommunication services, information technologies and electronic services, including public ones to citizens.

Our key goal implies creating of conditions for wide spreading and effective using of modern information and telecommunication technologies and development of telecom infrastructure throughout Russia. We’ve implemented a number of measures for achieving these goals. They include reforming the Fund of Universal Service Fund, adoption of technological neutrality and changes in the order of allocation of radio frequencies.

The Ministry also aims at increasing the quality of telecom services. In order to stimulate the competition on the telecom market mobile users were provided with an opportunity to change their mobile operator. Voting with the ruble customers motivate mobile operators to increase quality of communication services. Currently 1.15 million citizens applied for receiving this service.

Just three years ago there was no LTE service in Russia. As of November of 2014 LTE networks are operating in 79 regions of Russia.

More than 40% of Russian population is in its coverage. A number of active LTE users is more than three million people. Just half a year ago LTE network was available only in 66 Russian regions, a year ago only in 39 of them. These numbers show dynamics of industry renovation in our country.

There was no full statistics in this sphere. We didn’t know what was the largest village without mobile services and what was the largest city without a high-speed Internet connection.

Cooperatively with governors and municipality heads we’ve conducted full inventorying and explored 14 small cities with the population from 250 to 10 thousand citizens.

Until 2013 Russian mobile operators received licenses without any obligations to build telecom networks in small cities. In 2013 the State Commission for Radio Frequencies decided to provide and prolong licenses according to the principle of equal access of all Russian citizens to telecom services. Mobile operators were obliged to cover small cities with telecom services.

I will remind you the main point of universal communication service reform one more time. Market mechanisms don’t work in inhabited localities, where the population is less than 10 thousand people. We’ve introduced a principle of private-public partnership there. We’ve conducted a contract within the Universal Service Fund (USF), obliging Rostelecom (the largest federal telecom operator) to cover inhabited localities with the population of at least 250 people with fiber-optic communication bands. The contract implies providing telecom services in all inhabited localities with the population from 250 to 500 people, Rostelecom will also cover larger cities located in the route from its own funds. The contract was signed on May 13 of 2014. Moreover, we’ve signed an additional agreement, establishing the terms, according to which all constructing works will be finalized in 2018 instead of 2019.

This project is of great importance; in 2015 it is planned to achieve this goal in Astrakhan Oblast, Jewish Autonomous Region, the Republic of Adygea, Ingushetia, Kalmykia, North Ossetia, Tyva, Nenets and Yamalo-Nenets Autonomous Districts.

I specially name specific regions, because every senator and governor is personally interested in this work.

Information technologies are getting more and more important on the current stage of development of telecommunication industry. Actually communication services have become information technologies — the youngest and the most successful of our industries.

Information technologies provide new quality of life of our citizens and influence a number of other important industries.

Why IT was named as one of our most successful industries? One employee creates production and services equivalent to nearly two million rubles each year and the whole industry annually increases export of Russian IT products abroad.

Thus, IT is attractive point of growth for Russian economy.

High-qualified IT specialists are key assets of IT companies. Expenses on salary funds in such companies count nearly 70-80% of all costs. Lack of highly-qualified specialists is one of the most serious problems in the sphere. Ministry of Telecom and Mass Communications cooperatively with Ministry of Education and Science work on improving the situation.

“The strategy on development of information technologies in the Russian Federation for 2014-2020 and for the perspective till 2025” was developed and approved. A number of budget places for IT specialties will be increased by 35% since September 1 of 2015. It will allow preparing nearly 350 thousand additional specialists in IT sphere by 2020. But it’s not enough to satisfy the demand for highly-qualified specialists in this sphere.

It’s important not only to prepare specialists, but also to create attractive workplaces. People should feel that their work is highly evaluated and they are provided with appropriate conditions for work.

We are planning to finalize constructing of at least three technoparks, ideally — six of them till the end of 2014. New technoparks will start to operate in Samara, Saransk and Penza; objects of second stage are Moscow (technopark near Moscow Institute of Physics and Technology), Yekaterinburg and Nizhny Novgorod. We’ve never launched so many technoparks simultaneously. They provide an opportunity for creating new workplaces, small and medium business, and the niches, where we can generate value.

Under the circumstances of current geopolitical situation and for development of internal IT industry the President of Russia and the Chairman of the Government set a goal to develop a complex of measures for support of Russian software.

Currently the whole world uses software products of one country and just a few foreign companies. Monopoly always leads to negative consequences. We all remember the situation, when our citizens couldn’t use their bank cards due to sanctions. We also know the cases of illegal collecting of data of the Internet users by security services of some countries. Of course such cases have significantly harmed credibility of foreign software products.

Many state consumers and commercial enterprises are worried about this situation and started to look for alternatives to foreign software. Many of them are ready to buy Russian software products. Our IT companies can produce competitive IT products of global level and we also occupy serious positions in the number of niches on the global market. Today there are more producers of aircrafts than software developers, because of the technological complexity of the industry and strong monopoly of one country and few companies in this sphere.

Minsvyaz cooperatively with Temporary Commission of the State Council on Development of Information Society and with the active involvement of Russian software developers prepared suggestions on providing preferences to Russian software products in purchases of public authorities and state companies.

We are not going to introduce embargo on purchases of foreign software. What we suggest is: when the purchase includes software products or related services and the register of national software products includes a required product, customer must state impossibility or inexpediency of Russian software products to solve the issue in report, published on the portal on procurements. We will constantly monitor the reports on purchases of foreign software. These measures are being discussed now and we hope that they will be accepted soon.

Position of our IT industry isn’t clearly defined in this sphere. The definition of “Russian software” is being discussed now. It is not clear yet, if the share of Russian citizens and Russian enterprises in the registered capital must be more than 50% or more than 25%. We suppose that these discussions will help us to achieve consensus and make final decision. These criteria must be carefully discussed and make these preferences generate benefits for Russian economy and don’t stimulate Russian entrepreneurs to transfer their business to other countries. Thus, the measures must be constructive, not prohibiting.

We suppose that such soft supportive measures, concerning technoparks, personnel, and benefits for insurance premiums on wages and even preferences for state purchases will be not enough, because Russian software market is just 2% of global market. Even if public authorities and state companies will purchase only national software this will be less than 1% of global market. The amount of this demand will be not enough to raise our IT industry up to global level. We think that the industry requires financial support of the Government and we should closely consider development of certain software products in Russia.

What these software products include? First of all, these are data base management systems that are used in all our banks, public authorities and insurance companies, where all information is being handled via databases. These also are so-called operating systems, which are contained in our mobile phones, tablets and other devices. It also includes operating systems in data centers, which handle all information of popular Internet resources and companies. There are also some specific types of software, for example, engineering software, used in designing of buildings, aircrafts and equipment.

For each type of these software products we currently create special working groups under the Expert Council of Ministry of Telecom and Mass Communications on Development of IT industry. These are capital intensive and complex engineering products.

Nearly 40 billion rubles will be required annually during 5-7 years for ensuring breakthrough in IT sphere.

We suppose that Russian software industry must be export-oriented. Under the circumstances of current geopolitical situation BRICS-countries are the potential region for export of Russian software.

Russia is a presiding country of BRICS in 2015-2016. In July of 2015 leaders of BRICS will meet in Ufa. This meeting along with the other preliminary activities should be used for constant reporting of our position to our colleagues. At the end of October I personally met with the Ministers of BRICS-countries during Plenipotentiary Conference of the International Telecommunication Union in Busan, they all worry about the current situation and are ready to unite efforts to eliminate the monopoly in the sphere of information technologies, including software market and telecommunication equipment.

Management of Internet infrastructure is becoming increasingly important today. Only specialists are aware about the high level of dependence not only on software products, but also on a number of technological services, composing crucial infrastructure of the Internet. We are constructing fiber-optic communication bands in all inhabited localities with the population of at least 250 people keeping in mind absolute reliability of network. We will not tolerate external distracting impact of other countries on the operating of this network. The network must operate and people must have a right to get information and electronic services.

For several years we’ve being discussing empowerment of all countries in coordination of the global network.

We create different models and variants of our future activities in case of destructive intervention in order to avoid disconnecting of Russian users from the Internet.

For implementation of the Presidential order were carried out mutual trainings with the Federal Security Service and Ministry of Defense aimed at increasing stability of Russian segment of the Internet as a result of targeted actions. We are planning to organize such trainings annually.

I’m talking not about the possible disconnection of national segment of the Internet from the global network, but about operating of the Russian segment of the Internet in case of targeted external impact.

In case of emergency Russian specialists will use all the necessary organizational and technical measures to support functioning of the national segment of the Internet.

Corresponding measures are being carried out by our colleagues in BRICS-countries and some other regions. We are constantly keeping in touch with our colleagues in telecommunication administrations to organize mutual activities and make our actions simultaneous.

The results of trainings were reported to the President of Russia and provided the basis for the current meeting on information security of the Security Council of Russia.

Dear colleagues! We’ve faced a period of global changes that requires appropriate solutions from us. Ministry of Telecom and Mass Communications and the Government of Russia will develop legislative framework aimed at support of software and telecommunication equipment industry. These legal acts can be connected with sources of financing and conditions of state procurements. We look forward to your support.

Thank you for attention!”

"Government hour" in the State Council, Nov. 19, 2014


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