Pricing and consumer protection

Retail pricing

What rules govern retail pricing for telecoms services?

Under Article 28 of Federal Law 126-FZ (the Communications Law), telecoms operators are free to set their own retail tariffs for the provision of services. However, the rates of publicly available telecoms and postal services by natural monopolies are controlled by the state. Publicly available services include:

  • local and intercity fixed-line calls;
  • the terrestrial transmission of publicly available (mandatory) television channels; and
  • publicly available telecoms communications to receive cable and terrestrial broadcasting signals.

State regulation of such tariffs is carried out by the Federal Anti-monopoly Service in accordance with the rules set by Government Decree 637, dated October 24 2005.

Consumer contracts

What rules govern consumer service contracts?

Regulatory provisions designed for the protection of consumers are set out in Law 2300-1 on the Protection of Consumer Rights, dated February 7 1992.

Specific requirements for telecoms contracts are set out in the relevant rules adopted for different types of telecoms service (eg, the Rules for Provisions of Data Transfer Services adopted by Government Decree 32 on January 23 2006). These rules require:

  • the provision of certain information to subscribers at the execution of a contract and during the provision of services;
  • compliance with certain technical requirements;
  • an assurance of confidentiality and security; and
  • the proper identification of subscribers.

Article 44 of the Communications Law also provides for certain requirements applicable to consumer contracts entered into regarding wireless telecoms services. For example, operators of wireless services cannot enter into consumer contracts in movable retail facilities.

Pursuant to Article 44 of the Communications Law, wireless services operators must maintain separate consumer accounts for their main services and additional content services to avoid debiting payments for additional services from the principal account opened for wireless services.

Article 44 also contains provisions on portable numbers and limits the fee for keeping the number to Rb100 (approximately $1.70).

Disclosure requirements

Are telecoms service providers bound by any consumer disclosure requirements?

The requirements for the disclosure of certain information to consumers are specified in the relevant rules for the provision of different types of telecoms service adopted by government decrees. Under the Rules for the Provision of Data Transfer Services adopted by Government Decree 32 on January 23 2006, when executing a telecom services contract with a subscriber, operators must provide:

  • their full name;
  • details of licences, a services card, the payment terms, support contracts and locations where subscribers can familiarise themselves with all of the terms of the provided services;
  • a list of the terms of the provided services; and
  • any additional information in connection with the provision of services, as requested by the subscriber, in Russian and other languages (if necessary).

Operators must also post information online regarding the terms for the correction of defects that preclude subscribers from using their services and notify them of any changes in rates no less than 10 days before they come into effect.

Competition

Issues and concerns

Are there any particular competition issues or concerns in the domestic telecoms market?

The key to accessing the telecoms market and being competitive is utilising the range of relevant licences (which cover a broad array of services). Given the limited resources for the provision of certain services – especially those with the highest commercial potential, such as next-generation wireless services – new licences are often distributed via tenders that are dominated by existing major operators, which makes market entry difficult for new players.

Sector-specific regulation

Do any sector-specific competition regulatory/legal provisions apply (eg, special conditions for dominant telecoms market players)?

The Law on the Protection of Competition contains no telecoms industry-specific requirements or provisions.

The Federal Anti-monopoly Service, the regulatory authority responsible for compliance with competition legislation, issued Information Letter IA/10167 on Setting Different Tariffs for the Same Goods in the Telecoms Market on April 9 2010. The letter requires that operators which hold a dominant position must avoid setting different tariffs for the same services provided in various regions. An operator is considered to hold a dominant position if:

  • it has more than a 50% share of the market in the relevant territory; or
  • the Federal Anti-monopoly Service considers its position (between 35% and 50%) as dominant in comparison with other service providers in the same market. 

In certain territories, the telecoms market is assessed with regard to where demand is best served in the absence of competition (ie, a natural monopoly). Natural monopolies are regulated by Federal Law 147-FZ on Natural Monopolies of August 17 1995 (as amended) and subordinate regulatory acts.  Among other things, tariff regulations may apply to natural monopolies in specific cases. Further, information disclosure standards are higher for natural monopolies and transactions that involve natural monopolies are subject to a separate competition analysis.

Separation

Are there any requirements for structural, functional or accounting separation of operators’ activities?

Under Ministry for Connection and Mass Communications Order 54, dated May 2 2006, operators that hold substantial positions in publicly available networks and operators of universal services and natural telecoms monopolies must keep separate accounts for:

  • different types of activity;
  • provided services; and
  • different sections of the telecoms network used for the provision of such services.

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