Commissioner’s forecast: cloudy with an 80% chance of UMTS licensing

8 Feb 2011

The head of Ukraine’s National Commission for Communications Regulation (NCCR), Vladimir Oleynik, has given an interview with daily newspaper in which he expressed ‘hope’ that an auction of 3G 2100MHz mobile licences could take place this year, although the decision remains out of the regulator’s hands. The conversion of UMTS band radio frequencies depends on their release by the defence ministry and also requires input from the Ministry of Infrastructure and scientific body the National Council on Radiation Protection and Measurements (NCRP), Oleynik pointed out. The commissioner gave the opinion that there is an 80% chance that the licence tender will be held by the end of 2011, ending the long wait of domestic cellcos Kyivstar, MTS Ukraine and Astelit. National fixed line operator Ukrtelecom remains the sole W-CDMA/HSPA network operator in the country, although it does have 3G mobile broadband resale deals in place with rival cellcos, whilst MTS offers 3G data-only services based on CDMA2000 1xEV-DO Rev A technology, according to TeleGeography’s GlobalComms Database. Plans to refarm and/or trade existing spectrum for the purposes of providing UMTS-based services in lower bands are yet to bear fruit.

Elsewhere in the interview, Mr Oleynik said that in 2010 Ukrainian telecoms operators’ revenues increased by 2%, lower than the 5% rate the NCCR had forecast, a fact he attributed to saturation in the mobile market and low growth in fixed line services. The watchdog issued another prediction of 5% turnover growth for 2011. Oleynik pointed out that between 30% and 40% of Ukrtelecom’s fixed network infrastructure remains based on analogue equipment unsuitable for modern services, and subject to the completion of its privatisation [to Austrian investor Epic, agreed in late-December 2010], ‘massive’ investment is required to digitise its network. Digitisation will, the commissioner claims, increase fixed line penetration to 30% of the population from around 25% currently, while revenue from the provision of landline services ‘may grow by 5% this year.’

The commissioner also said that revenues from internet services grew by 25% in 2010 to reach almost UAH4 billion (USD500 million), and he expects to see 30% growth in the segment this year.

Ukraine, Ukrtelecom (incl. TriMob)