Kyivstar’s revenues fall 4.8% as regulator’s merger probe drags on

28 May 2010

Ukraine’s largest mobile operator by users Kyivstar has reported a 4.8% year-on-year drop in first-quarter revenues, to UAH2.573 billion (USD328 million), as net profit fell 39.5% to UAH224 million and OIBDA decreased by 10.3% to UAH1.307 billion. The GSM provider’s subscriber base shrank by 3.5% year-on-year to 21.934 million at the end of March 2010, and monthly belnded ARPU for the three-month period was UAH38.5, down from UAH39.1 in Q1 2009, despite minutes of use (MOU) rising by 51.2% y-o-y to 425 in 1Q10.

Separately, Ukraine’s Anti-monopoly Committee said in an e-mailed statement, reported by Dow Jones Newswires, that it will not make a ruling on Kyivstar’s planned merger into Russia’s Vimpelcom before the end of June at the earliest. ‘The decision should be made no earlier than the end of June or even later,’ a spokesman said, adding that officials were in the process of re-examining market data, following a complaint from rival Ukrainian cellco Astelit arguing that previous regulatory approval given to the deal should have considered market share by revenue rather than by subscribers. Kyivstar has a share of around 43% of Ukraine’s mobile users, but reportedly a larger share by revenue, whilst Vimpelcom already owns Beeline Ukraine with a further near-4% share of the subscriber market. On Wednesday Vimpelcom’s CEO Alexander Izosimov said he expected a decision from Ukraine within the next three months.

Total mobile services turnover in Ukraine in 2008 was UAH29.3 billion, according to the State Statistics Committee (SCC). According to TeleGeography figures, Kyivstar’s revenues represented 44.9% (UAH13.15 billion) of this total, ahead of nearest rival MTS Ukraine with 30.4% (UAH8.92 billion). In 2009, both these companies’ revenues in US dollar terms plummeted as the value of the Ukrainian hryvnia slumped; Kyivstar’s turnover was USD1.437 billion, above MTS Ukraine’s USD1.049 billion.

Ukraine, Beeline (Russia), Kyivstar, VEON