Revenues stabilise at Ukrtelecom, drop at Vega; Kyivstar joins them in IPTV market

27 Oct 2015

Ukraine’s largest fixed network operator Ukrtelecom has reported that its revenues remained stable in the first nine months of 2015, despite the loss of its assets in the Russian-controlled Crimea peninsular – where it finally halted all remaining operations in February 2015 – alongside further reductions in its operations in the separatist strongholds in eastern Ukraine and the tough economic situation across the country. Ukrtelecom earned U8AH4.766 billion (USD205.7 million) in revenues (excluding VAT) for the first three quarters of 2015, including UAH4.565 billion from core telecommunications services. In Q3 2015, quarterly EBITDA of UAH583.3 million was up by 7.4% quarter-on-quarter and gave it an EBITDA margin of 31.8%, whilst Q3 net income increased by 14.5% q-o-q to UAH351.6 million (of a total 9M13 net profit of UAH493.2 million). Revenue from fixed telephony fell by UAH211 million to UAH2.388 billion in January-September 2015, partly offset by a UAH60 million rise in fixed broadband revenue to UAH984 million in the nine-month period. Ukrtelecom expanded its broadband network to an additional 186 villages and urban areas in the first three quarters, and its broadband subscriber base stood at 1.631 million at 30 September 2015, down from the 1.67 million it reported at end-December 2014, with the drop attributed to loss of operational areas in Crimea and the east, partially offset by its rural expansion.

Ukrtelecom also reported for the first time its IPTV subscriber base total, announcing that it reached almost 56,000 customers, having launched the ‘Interactive TV’ branded service in July 2014 using the IPTV licences held by (registered as Digital Screens), a sister company under ownership of conglomerate SCM Group.

Another sister company of Ukrtelecom, fixed line telco Vega, also reported its financials for the first nine months of 2015, in which its revenues fell 8% year-on-year to UAH449 million, although the company swung to a net profit of UAH15.2 million versus a net loss of UAH6.4 million in the same period of 2014. Vega attributed the decline in revenues to the same factors as Ukrtelecom – the nationwide economy, loss of Crimean assets and loss of control in certain eastern areas. Vega added that its fixed telephony subscriber base fell to 451,900 at the end of September 2015, having fallen from the 584,000 it reported at the end of December 2012. Fixed internet customers stood at 157,000 at 30 September 2015, up from the 150,000 Vega reported at end-2012, although down slightly during this year on the back of the loss of Crimea. Following closely in the footsteps of sister Ukrtelecom (and similarly partnering, Vega relaunched IPTV services in July 2014, although it does not report subscriber numbers.

Joining the commercial IPTV sector this week is Ukraine’s mobile market leader Kyivstar, which has launched its ‘Home TV’ branded IPTV service for users of its fibre-to-the-building (FTTB) internet services. In its website announcement, Kyivstar confirms that initial IPTV coverage is restricted to the cities of Krivoy Rog and Zhitomir, whilst users must subscribe to a Home Internet fibre package and purchase an IPTV set-top box from the operator. Kyivstar is offering the IPTV service with more than 110 channels, including channels provided by its partner in the launch, Viasat (the broadcasting licence holder for the venture), as well as thousands of video-on-demand (VoD) titles, interactive features and multi-screen facilities for TVs and three other simultaneous devices.

Ukraine, Kyivstar, Ukrtelecom (incl. TriMob), Vega (owned by Vodafone Ukraine)