Roundup: internet body opposes USF; tech-neutral routing regs approved; Vega gains spectrum; telecoms sales up 2.6%

10 Jul 2012

The Internet Association of Ukraine (IAU) and the Ukrainian Union of Industrialists & Entrepreneurs (USPP) have sent an open letter to the President of Ukraine complaining of the ‘unacceptability’ of a draft law approved by the National Commission on Communications and Information Regulation (NKRZI or NCCR) which establishes a universal service fund (USF) for subsidising telephony and internet services in rural and remote areas via a 3.5% tax on telecoms service operators. As reported by BizLiga, the IAU and USPP argue in the first instance that the imposition of the USF is contrary to the President and the government’s strategy of reducing tax pressure. Secondly, they claim that the bill gives rise to scope for financial abuse, given the ‘vaguely defined’ concept of universal service and the issue of control over the payment of duty to two separate structures, the NCCR – which, under the draft will be the manager of the fund – and the state Revenue Service. The letter also points out that the bill does not take into account the experience of the European Union in the regulation of telecoms, and is contrary to several provisions of Directive N2002/22/ES European Parliament and Council of 7 March 2002 ‘On the universal service and user rights with respect to electronic communications networks and services.’

The NCCR estimates that proceeds from the USF surcharge will reach UAH1.6 billion (USD158 million) per year, while the draft bill compensates operators via a reduction to State Pension Fund payments taken from telecoms service revenues, which will be reduced from the current 7.5% to 4%. The main recipient of subsidies under the USF is expected to be former-state-owned incumbent nationwide operator Ukrtelecom.

Elsewhere, the NCCR has approved technology-neutral voice traffic routing regulations for public networks; the new rules set unified requirements for voice traffic routing by operators using public networks regardless of which technology is used by either party.

Also this week, the NCCR issued a regional wireless broadband licence to fixed telco Vega’s parent Farlep-Invest, permitting the use of spectrum in the 5.2GHz-5.3GHz bands in the Donetsk area, under a five-year concession beginning from February 2013.

According to the country’s Statistics Office, the total revenues from retail telecoms services in Ukraine rose by 2.6% year-on-year in the first quarter of 2012 to reach UAH4.7 billion (USD570 million), with growth largely attributed to recent rises in both mobile and fixed line call rates.