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. Last Updated: 07/27/2016

Coping With Russia's Phones

While several giant foreign telecommunications companies have landed contracts to connect their sophisticated technology into the antiquated Russian telephone system, some acknowledge this may not be the best solution for Russia.

"When they hook up to the Russian network, it's like installing GM engines into Zaporozhets cars", said Nikolai Kornev, a specialist for Siemens, referring to a Russian car model with a reputation for breaking down. "It will work for a while, but it is not a solution".

More than 100 firms are exhibiting high-technology communications products and services through the end of this week at the Expocenter. According to some estimates, Russia needs $40 billion to upgrade its telephone network, a figure that Yury Spiridonov, representative for Alcatel Business Systems Russia, calls "very modest".

Spiridonov said that a lot of modern switches, which connect calls, cannot be tied in to the Russian system because they are incompatible with outdated Russian equipment. New software often needs to be created to make the systems compatible.

The best solution for Russia is to create an entirely new telecommunications system, not to integrate the existing Russian network with new technology, said Kornev.

But such a solution cannot be accomplished without breaking up the state monopoly of the communications network. The ministry sells lines to foreign companies so that they can hook up their switches to the system. The switches allow the firm's customers to gain access to the Russian network.

But that is as far as Western technology will go. It is severely limited by the capabilities of the Russian network itself, which the firms must use.

According to Kornev, the Russian Communications Ministry will not share its monopoly on networks with foreign or Russian firms, even though it could get modern Western equipment as a replacement to the domestic switches and cables, some of which date back to the 1940s.

Foreign firms would Insist on owning some of the updated network they helped replace.

Alcatel, a French concern, gained a license from the Communications Ministry to install office switches last May.

It is now involved in more than 100 projects with about 25, 000 lines total. Industries, banks and hotels are Aicatel's main customers.

Last year, Alcatel sales volume in Russia hit $5 million, with several million dollars more in orders to be fulfilled under long-term contracts.

Spiridonov said the company is reinvesting its profits into its Russian operations.

But Spiridonov said integration into Russian network is a complicated process.

"I wouldn't wish it upon anyone to hook up to the 30-year-old Russian switches", he said.