In 1998 most mobile phone users dwelt in Moscow and St. Petersburg, besides among the customers there were numerous foreigners residing and working in Russia, who were accustomed to using mobile services back home.

The financial crisis, which hit Russia on 17 August 1998, radically transformed the Russian mobile telecom market. Sotovik, the information-analytical agency, reported the average loss of 20% in the number of subscribers, and in some regions the figure reached 50%.

However, that situation impelled providers to pay attention to the mass market. The news about VympelCom’s offer came as a bombshell for the Moscow market as its set of a mobile phone and a prepaid card with a package of services cost only $49. The offer was available for VympelCom’s D-AMPS network.

The crisis and more intense competition forced mobile operators to search for new ways to attract customers. That year saw a new stage in MTT’s development. The remarkable expansion of GSM providers made Multiregional TransitTelecom start upgrading its network. It was decided to replace GMTX switches with state-of-the-art switching centers able to service subscribers of all federal standards. MTT requested Ericsson to create a complex CGW switch (Combined GateWay), which laid the foundation for MTT’s transit network, and provided the necessary expertise.

N.Y. Psurtsev’s contribution to creating a switch unequalled anywhere in the world was enormous. He engaged in developing specifications for new switches and building equipment. The start of CGW expanded the functionality of MTT’s transit network significantly, as it, first of all, processed messages of the MAP applied subsystem used in the GSM standard. CGW characteristics allowed servicing the majority of the known signalling subsystems.

The start of CGW paved the way for the full integration of GSM networks in Russia’s coherent communication network with access to GSM subscribers through the non-geographic code DEF = 902. MTT’s network linked the PSTN with the new non-geographic zone as well as the NMT-450 federal networks with GSM ones, allowing practically effortless traffic routing.

At that time the centralized network monitoring and management system ASKONT developed by SoftPRO was implemented to control the transmission quality of MTT’s system. ASKONT’s built-in monitoring mechanisms automatically control the quality of the links in the network through collecting and processing statistical data on a daily basis.

By late 1998 54 providers used MTT’s transit network, including 41 companies running the NMT-450 network and 13 GSM operators.

In May 1998 MTT conducted tests of international roaming as a service to GSM operators. MTT’s first customer to use international GSM roaming was SMARTS JSC. Roaming was established between SMARTS and Sonera, a Finnish operator.

In late 1998 there were about 747 thousand mobile subscribers serviced by 153 mobile providers.