UPDATE 1-Russia's Yota drops WiMax in favour of LTE

Fri May 21, 2010 12:55pm EDT

* Will launch LTE instead of WiMax in 15 Russian cities

* To migrate to LTE in cities where it works on WiMax

* To spend $100 mln on roll-out in 5 cities in 2010

* Total investment seen at up to $2 bln

(Adds more Yota comments, details)

MOSCOW, May 21 (Reuters) - Russian wireless telecoms firm Yota said it decided to develop Long-Term Evolution (LTE) technology, dealing a major blow to competing standard WiMax, of which it is currently one of the world's top operators.

Yota plans to spend $100 million on the roll-out of LTE networks in five Russian cities in 2010, while total investments are estimated at up to $2 billion, it said on Friday.

"The world's biggest operators and device makers such as Nokia (NOK1V.HE) and Samsung (005930.KS) have chosen the LTE standard. Following the global trend, we are seeking to give our clients the best solutions," it said in emailed comments.

During 2008 and 2009 one mobile operator after another chose LTE, a natural evolution of their current 3G networks, over data-centric WiMax, for their next generation, more efficient mobile networks. [ID:nLDE6112EN]

And the head of U.S. Clearwire Corp CLWR.O signalled in March this year it could use LTE in the future, while Yota said it "did not vow to use WiMax." [ID:nN24201190] [ID:nLDE62P118]

"The only reason we are delaying its (LTE's) launch everywhere is the fact LTE technology is so new," said Yota, which has more than 500,000 clients.

The company, founded in 2007, operates in Moscow, Russia's second city of Saint Petersburg and three other Russian cities. It is also active in neighbouring Belarus, Peru and Nicaragua.

It had planned to launch WiMax in 15 more Russian cities.

"In these cities there will be LTE," Yota said on Friday, adding that it will use the same 2.5-2.7 GHz frequency band in which its WiMax networks currently operate.

Yota has signed contracts for delivery of 1,000 base stations, but declined to say who the equipment makers were.

It plans to launch LTE in Moscow and Saint Petersburg at the end of 2011. (Reporting by Maria Kiselyova, editing by Will Waterman and Sharon Lindores)