Kyivstar to initiate frequency refarming for 3G; motivated by licence fees

10 Nov 2010

Ukraine’s largest cellco by subscribers Kyivstar has revealed that it is aiming to initiate voluntary refarming of spectrum amongst domestic mobile operators for the purposes of launching 3G W-CDMA/HSPA services in the 900MHz and 1800MHz frequency bands, in the absence of the government issuing 2100MHz UMTS licences to private companies. Rivals MTS and Astelit have previously been unenthusiastic about plans for refarming, but according to Kyivstar president Igor Litovchenko, quoted by local newspaper, these two operators are more likely to cooperate now the market leader has proposed a plan to offload some of its spare frequencies resulting from its recently approved integration with fellow Vimpelcom subsidiaries Beeline Ukraine/Golden Telecom as part of Kyivstar’s merger into the Russian parent group. Litovchenko stated that Kyivstar does not need all the frequencies and is preparing to sell certain portions of bandwidth, especially motivated by rising costs of spectrum licence fees. He said: ‘It’s a matter of business efficiency, because we do not use them [the frequencies] fully. And it is irrational, especially after the increase in this year’s fees for the use of frequencies up to five times.’

TeleGeography’s GlobalComms Database notes that Kyivstar currently resells 3G mobile broadband services over the 2100MHz W-CDMA/HSPA network of state-owned Ukrtelecom, which the former combines with its own extensive EDGE-based mobile internet coverage. MTS Ukraine currently provides 3G mobile broadband over its own data-only 450MHz CDMA2000 1xEV-DO Rev A network (in addition to EDGE-based data services). Astelit, which operates under the ‘life:)’ brand, concentrates on EDGE-based mobile internet services. The award of paired 2100MHz/1900MHz frequencies has been blocked by the Ministry of Defence, and according to recent statements from the head of the National Commission on Communications Regulation (NCCR), Vladimir Oleynik, a 3G concession auction may not arrive until the first half of 2011.

Responding to news of Kyivstar’s proposals, Astelit’s director of corporate relations, Yuri Kurmaz, was quoted as saying: ‘We are interested in obtaining additional frequencies in the 1800MHz and 900MHz range, and consider refarming as a tool to achieve this goal. In this case, the process should be built on the basis of full consensus among all market players. Previously, the working group established by the regulator failed to agree on a mechanism of refarming. Today, therefore, [it is] too early to talk about how the process will evolve further and whether we will participate in it.’ Head of public relations at MTS Ukraine, Victoria Ruban, simply said that the company had not yet received new proposals on frequency refarming, and, ‘if these arrive, we will consider [them].’