Russia’s invasion of Ukraine on February 24 has spurred a raft of sanctions from Western governments.
These measures are aimed at limiting Russia’s international economic activity and foreign trade.
Among the companies targeted under the U.S. Treasury Department’s restrictions is state-backed telco Rostelecom.
Rostelecom is Russia’s largest fixed broadband provider and the owner of number-three mobile operator Tele2. The Russian federation has a direct 38.2% interest in the telco, as well as an indirect holding via VTB Bank.
NASDAQ and the New York Stock Exchange (NYSE) have halted trading in U.S.-listed Russian stocks.
Meanwhile, NASDAQ and the New York Stock Exchange (NYSE) have halted trading in U.S.-listed Russian stocks—including the federation’s largest mobile operator MTS, search engine/cloud company Yandex, and e-commerce platform Ozon.
U.S. government moves to halt the export of semiconductors to Russia could also have a long-term impact on the deployment of 5G networks in the country.
Vodafone Ends Agreement
On top of these measures, a growing number of Western firms are cutting ties with Russia—including some in the telecom and tech sectors.
On March 2, it was revealed that UK-based Vodafone Group had ended a 14-year partnership with MTS in the wake of the Ukraine invasion. Vodafone Group issued a simple statement saying: “Vodafone confirms that it has suspended its partner market agreement with MTS.”
The decision came just over a year after Vodafone and MTS had agreed to extend their relationship, provisionally to 2023. The agreement—first signed in 2008—gave MTS access to Vodafone’s expertise across networks, IT, marketing, supply chain, and equipment procurement.
The deal initially included MTS’s operation in Ukraine—which was rebranded Vodafone Ukraine—though this was sold off in 2019.
Other Exits
Equipment vendors Ericsson and Nokia have both confirmed to have ceased product deliveries to Russian operators while they assess the impact of Western government sanctions newly imposed on Russia. This move will affect MTS and other major Russian mobile operators, MegaFon, Beeline, and Tele2.
Another high-profile exit saw Apple pause all product sales in Russia and limit access to Apple Pay services.
Another high-profile exit saw Apple pause all product sales in Russia and limit access to Apple Pay services. A company statement released on March 1 read: “We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence.”
Elsewhere, Mikhail Fridman has resigned as a director of VEON—the Amsterdam-based global telecom company whose biggest operation is Beeline Russia—after the EU imposed sanctions on him and other Russian business figures. He will retain his ownership interest in the telco group.
Ukrainian-born Fridman—one of Russia’s wealthiest men thanks to his stakes in VEON and Alfa Bank—has spoken out against the conflict, yet stopped short of direct criticism against President Putin.
Pete Bell
Pete Bell is a Research Analyst for TeleGeography’s GlobalComms Database and also contributes to the daily CommsUpdate newsletter. He has a particular interest in wireless broadband and was responsible for TeleGeography’s 4G Research Service until it was integrated into GlobalComms.