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Russia Set to Adopt Proprietary Internet of Things Network by 2024

Joint venture Glonass-TM given the go-ahead to install 34,000 nationwide base stations over the next five years.

Photo: The Glonass satellite network: A key element in Russia’s bespoke IoT connectivity.
The Glonass satellite network: A key element in Russia's bespoke IoT connectivity.
Photo: The Glonass satellite network: A key element in Russia’s bespoke IoT connectivity.
The Glonass satellite network: A key element in Russia's bespoke IoT connectivity.

Russia is to gain a bespoke Internet of Things (IoT) network by 2024, with a five-year programme – involving the nationwide installation of up to 34,000 base stations – having been given the official go-ahead.

The project is to be managed on a public-private partnership basis by Glonass-TM, a recently established joint venture between Rostec (the state defence conglomerate), JSC Glonass (the operator of ERA-Glonass, the Russian counterpart to the US' GPS satellite navigation system) and IT Invest Transport Systems (the company that oversees Russia's electronic toll collection infrastructure). The primary shareholder of the latter is Igor Rotenberg, a billionaire whose close family ties to Vladimir Putin, the Russian President, have seen him subject to US / Canadian sanctions.

Work on the project is scheduled to begin next year, with the ultimate cost expected to be about 53 billion rubles (US$813 million). Once up and running, the network will be used to monitor, collect and analyse data on a nationwide basis. While it is officially expected to enter profitability in its fifth year of operation, this has been seen as somewhat optimistic by a number of industry players, given the project's scale and complexity.

The project is seen as having a particular application with regard to a number of designated priority areas, including energy efficiency (especially with regard to water consumption and distribution), power generation, natural-gas usage, building monitoring (including car park management) engineering systems and climate control monitoring. It will also be co-opted into providing a wide range of smart city-related facilities, including security and safety control, motion detection, CCTV connectivity, visitor flows, crowd control, waste collection / transportation, street lighting, highway infrastructure data collection, environmental monitoring and the management of crisis situations.

On the technical front, the 863-865 MHz and 874-876 MHz radio frequency bands have already been reserved for use by the network. It is also expected to use the proprietary Russian XNB low-power wide-area network (LPWAN) protocol, a system its developer – Modern Radio Technologies, another Rotenburg-owned business – claims offers wider data transmission coverage and a higher level of concrete wall penetration than either NB-IoT or LoRa, the two protocols most commonly used on a global basis. In addition, the new protocol is said to utilise the unique Kuznechik (Grasshopper) coding algorithm as a means of ensuring a high level of security for all user data.

Among Russia's more computer-literate community, the use of the XNB chip has been seen as a backdoor way of ensuring that third-party developers have to support this particular new bit of technology, even though its full technical specifications are not going to be released. There is also some suspicion that its enforced adoption will create a semi-monopoly in Russia's IoT sector.

Accordingly, the Russian IoT Association has already called for the optional inclusion of the other two commonly used chips, maintaining there is no substantive difference between the three in terms of the standard evaluatory metrics – area coverage, data transmission speed and energy efficiency. In line with this, it has been argued that mandatory ascendancy of one particular protocol is unfair, inefficient and likely to ultimately prove non-viable.

At present, Russia's IoT market is valued at about $3.67 billion, a figure expected to rise to $7.61 billion by 2023. Given the huge size of the sector and its potential worth, it is quite likely that the various alternative systems will jostle for market share over the coming years, with the XNB's pre-eminence with regard to the control of private and public utility systems seen as likely to give it a certain amount of home-team advantage.

In the interim period, Hong Kong-based suppliers and distributors of IoT-compatible equipment and household appliances with an interest in the Russian market would be well-advised to stay abreast of the changing specs in the sector. In particular, they should ensure that any items intended for export have the appropriate chips embedded or can subsequently be retro-fitted with the required technology.

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
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