Scenarios for the Development of the Telecommunications Industry in Russia under Sanctions Pressure

This paper is devoted to the development of the telecommunications industry under the sanctions pressure. The relevance of the work is due to Russia's significant lagging behind the global pace of implementation of 5G technologies, which makes Russian business less competitive in the global arena. The purpose of the study is to assess the degree of impact of the imposed sanctions and the subsequent withdrawal of foreign equipment suppliers on the telecommunications industry, as well as to identify scenarios for further development. The following hypothesis was put forward: the main scenario of the industry development is the abandonment of the use of foreign telecom equipment in favor of domestic manufacturers due to sanctions restrictions and increased costs of purchasing and maintaining foreign telecom equipment. Within the framework of the thesis the following tasks were set: 1. to systematize the accumulated knowledge on the topic of sanctions, to characterize the types of sanctions and the purpose of their application; 2. to analyze the sanctions imposed on Russia with a focus on equipment and the telecommunications market; 3. to determine sanctions as a factor in the formation of profitability of the telecommunications industry and identify risks for further development, based on Porter's 5 forces theory; 4. to analyze changes in key financial indicators of the leading companies in the industry and identify the connection between the withdrawal of foreign suppliers following the imposed sanctions and the growth of costs of the main players in the Russian telecommunications market; 5. to analyze current investments in the development of new generation networks and determine the availability of opportunities to invest in the infrastructure necessary for technological development; 6. to determine scenarios for further development of the Russian telecommunications industry taking into account the identified factors of influence. The following methodology was applied: analysis of the telecommunications market conditions based on Porter's five forces method, trend analysis of industry companies' financial statements, factor analysis of changes in their financial indicators and ratios. The analysis of financial indicators of key players in the industry revealed constraints provoked by increased costs of equipment procurement and debt servicing due to sanctions restrictions, because of which the Big Four operators had to implement an import substitution strategy and decided to focus on the development of domestic equipment as practically the only available option in the current conditions of interrupted supply chains.