Russian manufacturers of fiber optics and cables from it have asked the government to introduce customs duties of 15% on imported products. Thus, they want to protect themselves from competitors from Chinese companies that are pushing them out of the market, Kommersant writes .
Andrey Zarenin, Deputy Head of the Ministry of Digital Development, in his letter, which he also sent to MegaFon, MTS, VimpelCom, ER-Telecom and Rosseti, asks market participants to “evaluate the proposals of Moscow Mayor Sergei Sobyanin to increase import customs duties on cable products in excess of those established under Russian obligations under the WTO”. Now the rate for fiber optic cables is 0%. Also, the Deputy Head of the Ministry of Digital Development asks if it will be possible to use Russian analogues of foreign products.
Telecom operators using Chinese products oppose this initiative and say that they will be ready to give up cheap materials only if the tariffs for their services increase.
In particular, MTS called the initiative “a premature step that could negatively affect the work of operators, and subsequently the development of the digital economy.” MTS noted that the company already gives preference to Russian manufacturers when purchasing cables, “if there are relevant proposals”:
“But part of the Russian-made cable range is not available on the market or does not meet the requirements for ensuring the operation of networks and the provision of services.”
Rostelecom also stated that they support the proposal to increase the rates of import customs duties, but only "for those types of cable products that can be produced in the Russian Federation."
State of the Russian fiber market
- At the end of 2021, the volume of the Russian market for optical fiber as a raw material for cables amounted to 7.5 million km, or 4 billion rubles, while 70% of the market was occupied by foreign manufacturers.
- At the end of 2022, the market declined even more: to 6 million km (3 billion rubles), as operators reduced spending on infrastructure development.
“The fact is that after the imposition of sanctions, the only Russian manufacturer of optical fiber faced a lack of preforms,” explains Maxim Tretyakov, head of the NP Association Elektrokabel. They were purchased from a Japanese company, but after the start of the war in Ukraine, it stopped deliveries to the Russian Federation, which is why cable customer factories began to buy Chinese fiber for their products.
Proposals to raise customs duties for Chinese manufacturers are heard against the backdrop of news about the arrival of Chinese President Xi Jinping in Russia at the invitation of Vladimir Putin. Earlier, the Kremlin press service specified that during the visit of the PRC leader (March 20-22) "a number of important bilateral documents will be signed" and "topical issues of further development of comprehensive partnership relations and strategic cooperation between Russia and China will be discussed."