In the next 12 months the Internet access market in Moscow could experience a big shake up. Russia’s largest domestic carrier, Rostelecom, plans to launch an Internet service this summer. Its provisional announcements suggest that the company plans to make life very difficult for all of Moscow’s (and by default Russia’s) Internet service providers. When it launches its service, Rostelecom will be offering more international Internet capacity than all of Moscow’s other service providers combined. Having access to so much capacity and coming late to the Internet market, Rostelecom says it plans to price its services very aggressively. It has even suggested that it may offer US-style tariffs – a flat rate of $20 per month for unlimited Internet access. Were this to actually happen it would seriously undercut all of Moscow’s other Internet service providers. Within a short space of time it could even push them all out of the business. The company reports that it has registered the domains Rostelecom.ru, Rostelecom.com and Rostelecom.net and that it has leased twelve international 2 Mb (E1) channels, six from British Telecommunications Plc and MCI Corp and six from Unisource NV. Rostelecom reports that it is paying BT/MCI $2,500 per port for its new capacity. It is in the process of installing several network access points at a cost of $300,000 each. Network access points are planned for the Russian cities of Moscow, St. Petersburg, Samara, Ekaterinburg, Novosibirsk and Khabarovsk. Later Rostelecom aims to establish an asynchronous transfer mode backbone for its Internet service.
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