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Oligopoly: Industrial Revolution [key Serial Number]


The chaotic privatization process that tore apart the industry on the regional basis and in many instances within the regions provided the ground for the future competitive landscape. A number of privatized networks of former Soviet industrial enterprises became independent players in this new market. They had their own infrastructure and did not have to rely on the access networks of the former Soviet telecom monopoly. Newborn companies created through the use of positions of senior executives of the RSIs were even able to separate control over core parts of the local telephone networks, and that made such alternative operators independent not only on the issues of infrastructure, but even on the issues of interconnection. The core parts of the local networks in many instances by the end of the 1990s were shared by different companies, and a telecom enterprise seeking interconnection could interconnect its network to PSTN through the alternative operators of the backbone without the necessity to connect the network directly with the former monopoly.




Oligopoly: Industrial Revolution [key serial number]



Some available data highlight the scope of pluralization of the industry after the initial stage, which occurred in the 1990s. If we look at the register of telephone numbers distribution of the middle of the 2000s, which to a large extent reflects the historical picture formed in the 1990s, we will find that in some cities such as Saint-Petersburg, Kazan, Samara, and Ekaterinburg there were dozens of telephone companies, and their number in Moscow exceeded one hundred. According to available data, at the end of the 1990s, there were 92 incumbents in the local markets of telephone services and about 2700 independent telephone operators.Footnote 19 One of the directives of the national antitrust authority, for example, placed in the register of natural monopolies, in January 2001, 55 alternative telephone operators just of one Samara region (34 from Samara, the city with population less than 1.2 million inhabitants).Footnote 20 Among these companies, there are many industrial enterprises from various spheres and independent business endeavors that were previously telecommunications departments of these enterprises, several comparatively big operators affiliated with former officials of the Soviet telephone monopoly, public transport enterprises and its former departments, agricultural enterprises, companies affiliated with the energy industry, an enterprise belonged to the Ministry of Defense, several research institutions and even a university. Many of these companies provided services in small areas of the city and had only hundreds of subscribers.


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