Yota

Yota Begins WiMAX Network Deployment in Nicaragua

09-11-2009

Yota Company — the provider of fast wireless Internet access services based upon the Mobile WiMAX (4G) technology has begun deploying its network in Nicaragua.

The broadband Internet access penetration in Nicaragua is less than 1% which is one of the worst figures throughout the Latin American region. The extreme monopolization and weak competition in the market lead to poor service quality and high tariffs and eventually hinder the development of the communications market in the country. Considering the obvious interdependence between the penetration of communications services and the economic development of the country, the government of Nicaragua has ruled to bring the new player to the market: the player with solid experience in the development of the new generation communication networks.

In July 2009, the public tender for 2.5-2.7 GHz spectrum was announced in order to provide the whole territory of Nicaragua with communications services based upon the IEEE 802.16e (Mobile WiMAX) standard. The bidders had to meet the following criteria: experience in development of networks of the aforesaid standard; demonstrated subscriber base; availability of end-user devices; and also the willingness to invest a certain amount of funds into the country. Yota, one of the world leaders in Mobile WiMAX networks development, became the winner of the tender.

The new entity, Yota de Nicaragua, co-owned by WiMAX Holding (75%) and a local Nicaraguan company (25%), will build the network and manage the wireless services. During the start-up period, the management team from the Russian Yota has filled key posts in Yota de Nicaragua.

In September, the deployment of the network has begun in Managua, the capital of Nicaragua and the home city for 1.3 million of the 6-million population of the country. We plan to run the network in test mode in three months since the beginning of its deployment and to provide 500 volunteers with equipment to test the coverage and services. The beginning of commercial exploitation of the network is set to mid-2010. In the judgment of the government of Nicaragua, the entrance of a new strong independent player to the local communications market will foster competition and — alongside with it — the quality of communications services.

“The economic situation in Nicaragua is far different from that of Russia and in a broad sense from that of the company adjusted to deal with,” said Yota business development director Yegor Ivanov. “However, we see a large potential of this project. According to recent studies, Nicaragua lacks at least 200,000 new Internet connections. The demand of communications services in this country is enormous. That is why the implementation of this project, which is basically the fast transition from dial-up and scarce fixed-line communications to 4G technology, will allow to achieve a tangible social effect. Besides that, this is an opportunity for us to try out our international expansion strategy on a small country.

Nicaragua is the second foreign market for Yota after Belarus. The proven business model and technological infrastructure, over 70 models of end-user devices with built-in Mobile WiMAX support, a set of unique mobile services as well as our experience to date, all of these allow Yota to make steady progress toward international markets.