MobileTelesystems (MTS) and Ericsson have signed a new €400mn modernisation deal for 2017-2020, Russia's telecom major and one of four mobile operators said on October 23.

The deal seeks to bring 5G and Internet of Things (IoT) technology to the booming Russian mobile communication market. Since 2008 the partnership between MTS and Ericsson is estimated to have resulted in a turnover of EUR2bn.

MTS plans to expand the technologies in all the major Russian districts: North-Western, Volga, Sibir, Ural, and Southern federal districts.

In June 2016 another Russian mobile major VEON (rebranded from Vimpelcom) closed a $1bn equipment supplies deal with Ericsson.

The contribution of the mobile phone economy to Russia's GDP was RUB3.2 trillion or 3.8% of GDP, Vedomosti daily said on September 25 citing a report by Russian Association of Electronic Communication (RAEC), OC&C researcher, and Google.

This is already on a par with such sectors of the economy as water and gas utilities (3.1% of GDP), education (2.6%), accommodation and catering (0.8% of GDP). The report's authors argue that by 2021 the mobile economy contribution to the GDP will grow to 4.7%, beating major industries such as agriculture and insurance. 

The mobile economy is defined in the report as all services based on mobile telephony and mobile data, including traditional telecom services, applications, and online commerce.

The share of the telecom and internet providers in the segment is high at 65%, but is projected to decline to about 58% by 2021. Mobile penetration in Russia is estimated at 178%, while mobile users are active in various application-based services, commerce, and social media.

Mobile data is 10 times cheaper in Russia than in the US and three times cheaper than in Germany. Russia is the fifth leading country in the world in terms of applications downloaded.