Russias Rosseti Plans $80 Billion Fiber Optic Network Overhaul Amid Controversy

The Federal Grid Company «Rosseti» plans to establish a unified communication line. The project is estimated to cost 80 billion rubles and is projected to take ten years to complete. «Rosseti» proposes to build the backbone fiber-optic communication line (FOCL) using the existing infrastructure, with the intention of owning the line outright. This was reported by the publication «Kommersant.»

The company plans to lease the maximum capacity of fibers to «Rostelecom» on a long-term basis, charging 3,500 rubles per year for each fiber, which is below the market rate of 5,000 rubles per year. The lease will be calculated based on the length of the segment. The subscriber capacity is expected to increase by at least one million households.

«Rosseti» aims to fund half of the investments from current revenues generated by placing FOCL on overhead power lines. The remaining half will come from the universal communication services reserve, which is formed from 2% of the revenues of all operators, generating around 15 billion rubles annually. «Rostelecom» is unaware of this project.

As this material was being prepared, discussions were ongoing between «Rosseti» and telecommunications operators. Operators are advocating for a one-time payment for all cables on a single pole, but «Rosseti» opposes this, believing it may disrupt the operation of the power lines.

According to «Rosseti’s» plan, obsolete FOCLs will be removed, while others will remain in place until their service life ends or until the overhead lines are reconstructed. The transition period could vary from one year to more than twenty years. The company has long sought to increase its revenue beyond electricity transmission, with potential earnings from FOCL on power lines estimated at 14 billion rubles per year.

The precise route of the new line has not been specified, and it remains unclear whether it will compete with the TEA NEXT project, which is being developed by «Rostelecom» in collaboration with Alfa-Bank. This project will stretch 11,700 kilometers at a cost of 28.1 billion rubles, aimed at connecting the borders of Russia with Mongolia, China, and the port of Nakhodka.

«Rosseti» did not respond to inquiries regarding the construction of the unified communication line. Officials from the Ministry of Digital Development and Deputy Prime Minister Grigorenko declined to comment on the initiative. Some experts believe that this project could strengthen the monopolistic positions of «Rosseti» and «Rostelecom.» One expert recalled past conflicts between «Rosseti» and regional providers.

Serguei Sasim from the Higher School of Economics believes that «Rosseti» possesses the technical capabilities to execute the project. However, he points out that the placement of these facilities on overhead lines incurs costs that are not reflected in current tariffs. Sasim argues that a new model of interaction must be developed, evaluating technical solutions based on reliability, risks, and the load on the overhead lines.