Ukraine - Telecoms, Mobile, Broadband and Forecasts  

• Market and industry analyses, trends and developments;

• Facts, figures and statistics;

• Industry and regulatory issues;

• Infrastructure;

• Major Players, Revenues, Subscribers, ARPU, MOU;

• Mobile Voice and Data Markets;

• Broadband (FttH, DSL, cable TV, wireless);

• Digital Media.

Executive Summary

One of Eastern Europe’s largest countries, Ukraine shares borders with CIS nations Russia, Belarus, Moldova as well as European Union member nations Poland, Slovakia, Hungary and Romania. Following a turbulent period in the transition from independence Ukraine enjoyed strong economic growth culminating in accession to the World Trade Organization (WTO) in 2008. Like much of its neighbours, Ukraine was adversely impacted by the recent global economic turmoil. One of the hardest hit countries, Ukraine turned to the International Monetary Fund (IMF) for assistance in November 2008, and has since worked to restore economic health.

Ukraine’s historical and economic ties with Russia are evident as it is its largest trading partner, is home to a significant Russian ethnic minority and the Russian language is spoken by the general population, particularly in the Eastern regions. In recent years Ukraine has sought an increasingly close relationship with the EU, and has voiced aspirations to eventually join the EU.

Ukraine previously held formalised relations with the EU through the latter’s European Neighbourhood Policy (ENP), through which financial assistance is offered in exchange for observing strict conditions of government and/or economic reform. As part of the ENP, an EU-Ukraine ENP Action Plan was adopted by both countries in February 2005.

The ENP Action Plan established strategic development objectives which encompasses among other, the area of telecoms and information society. Telecoms and information society development objectives included:

• Ensure fair competition in the electronic communications markets.

• Adopt a regulatory framework encompassing licensing, interconnection, numbering and generally accessible telecommunications services

• Adopt the State Program “e-Ukraine” for the development of the Information Society and explore possible support by the EU for its implementation. This includes promoting e-commerce, e-government, e-health, e-learning initiatives via the provision of advanced infrastructures, the development of local content and the introduction of pilot projects

• Improve ICT literacy among the general public through computer training programs for the general public.

Mirroring the general economy, Ukraine’s overall telecoms industry has grown consistently. Market liberalisation has opened up the entire communications market to competition; the success of this policy is evident in the broadband and mobile markets but not as such in the fixed telephony market, where the incumbent still dominates the market.

Ukraine possesses a sizeable Internet market, with broadband representing a growing proportion of total Internet access subscriptions. Broadband services are available via ADSL, cable, FttH, LAN and wireless platforms such as WiFi and WiMAX, with competition predominantly infrastructure-based. Digital TV is accessible due to wide reaching cable TV networks, a number of satellite pay TV platforms, broadband TV and digital terrestrial TV.

Ukraine’s mobile market is highly competitive due to a number of mobile operators offering services via GSM, CDMA and WCDMA/HSDPA networks. Mobile broadband services present the next growth opportunity given the saturated mobile voice market although the major GSM operators are hampered by lack of licences to offer 3G services. Into this market opportunity has stepped Ukraine’s CDMA operators, which initially offered fixed-line services but have since moved into the mobile market, launching mobile broadband services. Ukraine is also home to a nascent mobile content and applications market, with future growth largely dependant on mobile data take up.

Market highlights:

• Market competition is expected to improve after the regulator introduced regulation to define the overall telecoms market into specific markets in line with EU principles, each of which will undergo analysis in future years to determine the level of competition.

• Fixed broadband holds much growth potential in 2010, given it currently represents a quarter of total Internet access subscriptions. Competition is predominantly infrastructure based due to lack of an effective network access regime. Existing service providers with established brands, networks and customers are well positioned in the market, with cable TV and mobile operators notable examples.

• Digital TV is available via cable, satellite, IPTV and DTTV. Availability is expanding as new players enter the market and launch services.

• Ukraine’s mobile market has undergone consolidation, strengthening the position of largest operator. Mobile SIM card penetration is in excess of 100% with future revenue growth in mobile broadband dependent on delayed 3G licence allocations.

Ukraine – key telecom parameters – 2009 - 2010

Data in this report is the latest available at the time of preparation and may not be for the current year.

4. Fixed Network Market
4.1 Overview of operators
4.2 Ukrtelecom
4.3 Datagroup
4.4 Eurotranstelecom
4.5 Beeline Ukraine
4.6 Vega
4.7 Wireless Local Loop (WLL) operators
4.7.1 Velton Telecom
4.7.2 Intertelecom
4.7.3 International Telecommunication Company (ITC) / CDMA Ukraine
4.7.4 Telesystems of Ukraine / PEOPLEnet

5. Telecommunications Infrastructure
5.1 National telecom network
5.1.1 Ukrtelecom
5.1.2 Datagroup
5.1.3 Eurotranstelecom
5.1.4 Beeline Ukraine
5.1.5 Vega
5.2 International infrastructure
5.3 Telecoms and IT

6. Internet Market
6.1 Overview
6.1.1 Ukraine’s emerging Internet economy
6.1.2 Internet statistics

7. Broadband Market
7.1 Overview
7.1.1 Fixed broadband statistics
7.2 Asymmetric Digital Subscriber Line (ADSL)
7.3 Cable modems
7.4 Fibre-to-the-Home (FttH)
7.5 Wireless broadband
7.5.1 WiFi
7.5.2 WiMAX
7.6 Forecasts – fixed broadband market – 2010 - 2013; 2019
7.6.1 Scenari1 – higher fixed broadband subscriber growth
7.6.2 Scenari2 – lower fixed broadband subscriber growth

8. Digital Media Broadcasting
8.1 Overview of broadcasting market
8.2 Digital Terrestrial TV (DTTV)
8.3 Cable TV
8.3.1 Volia Cable
8.4 Satellite-based digital pay TV developments
8.5 Digital TV
8.6 Broadband TV (IPTV)

9. Mobile Communications
9.1 Overview of Ukraine’s mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 GSM licences awarded
9.2.2 CDMA licence awarded
9.2.3 Third Generation (3G) mobile licences
9.3 Mobile technologies
9.3.1 Digital
9.3.2 Third Generation (3G) mobile
9.4 Major mobile operators
9.4.1 Ukrainian Mobile Communications (UMC) / MTS Ukraine
9.4.2 Kievstar
9.4.3 Ukrainian RadiSystems (URS) / Beeline Ukraine
9.4.4 Astelit / Life:)
9.4.5 Ukrtelecom (Utel)
9.4.6 Mobile Virtual Network Operators (MVNOs)
9.5 Mobile voice services
9.5.1 Prepaid
9.6 Mobile data services
9.6.1 Short Messaging Service (SMS) / Multimedia Messaging Service (MMS)
9.6.2 Push-to-Talk (PTT)
9.6.3 Enhanced Data for GSM Evolution (EDGE)
9.6.4 Mobile broadband
9.6.5 Unlicensed Mobile Access (UMA)
9.6.6 BlackBerry
9.6.7 Mobile TV
9.7 Mobile content and applications

10. Glossary of Abbreviations

Table 1 – Country statistics Ukraine – 2009
Table 2 – Telephone network statistics – 2009
Table 3 – Internet user statistics – 2009
Table 4 – Internet subscriber statistics – 2009
Table 5 – Broadband statistics – 2009
Table 6 – Mobile statistics – June 2009
Table 7 – National telecommunications authority
Table 8 – Ukrtelecom financial data – 2008 - 2009
Table 9 – Fixed lines in service and teledensity - 1995 - 2010
Table 10 – Internet users and penetration rate – 1999 - 2010
Table 11 – Fixed broadband subscribers and penetration rate – 2005 - 2009
Table 12 – Forecast fixed broadband subscribers – higher growth scenari– 2010 - 2013; 2019
Table 13 – Forecast fixed broadband subscribers – lower growth scenari– 2010 - 2013; 2019
Table 14 – Prime time audience share by broadcaster – 2004 - 2009
Table 15 – All day audience share by broadcaster – 2004 - 2009
Table 16 – Total TV advertising spending – 2004 - 2009
Table 17 – Mobile subscribers and ARPU by operator – June 2009
Table 18 – Mobile subscribers and penetration rate – 1995 - 2010
Table 19 – Total mobile market revenue – 2005 - 2015
Table 20 – UMC subscribers – 2004 - 2009
Table 21 – UMC revenue – 2008 - 2009
Table 22 – UMC ARPU, MOU and churn rate – 2003 - 2009
Table 23 – Kievstar financial data – 2007 - 2009
Table 24 – Kievstar prepaid, postpaid & blended monthly ARPU – 2007 - 2009
Table 25 – Kievstar total subscribers and MOU – 2004 - 2009
Table 26 – URS mobile revenue – 2008 - 2009
Table 27 – URS subscribers – 2005 - 2009
Table 28 – URS monthly ARPU & MOU – 2008 - 2009
Table 29 – Life:) subscribers and ARPU – January - June 2009
Table 30 – Kievstar prepaid subscribers – 2004 - 2009
Table 31 – UMC data revenue by type – 2008 - 2009
Table 32 – Mobile broadband subscribers and penetration rate – 2007 - 2010

Exhibit 1 – The Economist Intelligence Unit (EIU) annual E-readiness criteria