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Ukraine - Telecoms, IP Networks, Digital Media and Forecasts


Attention: There is an updated edition available for this report.

Ukrtelecom ditches FttN for FttH national network

BuddeComm’s half-yearly publication, Ukraine- Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Eastern Europe’s largest markets. The report includes the regulator’s market data updates for 2011, State Statistics data to June 2012, telcos’ operating and financial data to June 2012 and key market developments to mid-2012.

Economic background

Following a turbulent period in the transition from independence from the Soviet Union, Ukraine enjoyed strong economic growth culminating in accession to the WTO in 2008. In common with most of its neighbours, the country has been adversely impacted by the global economic turmoil. One of the hardest hit countries in the region, GDP fell by almost 15% in 2009. However, unlike in most other markets Ukraine’s telecom sector has shown considerable resilience, growing steadily during the last few years, with the broadcasting and mobile sectors offsetting the faltering fixed-line telephony sector. Partly assisted by the IMF, the country has worked to restore economic health and as a result GDP rose 5.2% in 2011, though this is expected to slow to 3% for 2012.

Telecom market overview

Ukraine’s large population supports a substantial telecom market which showed a 6% growth in revenue in 2011 and a 10% growth in the first half of 2012, year-on-year. Both the market and regulatory regime have been influenced by the country’s prospective membership to the EU though recent internal political events, criticised by Europe’s political leaders, may jeopardise the free-trade agreement between Ukraine and the Union, and delay further progress towards accession. The telecoms sector stands to benefit further from the regulatory clarity derived from the EC’s telecom framework, as also from market competition which it promotes and the attraction for investment from Western European and Russian telcos.

Broadband market

The broadband subscriber base has grown steadily in recent years, as has revenue from the sector. Important developments are expected from 2013 following the decision to set up a universal service fund to expand and improve broadband delivery in rural areas, as also by the commercial decision by the main provider Ukrtelecom to invest in a national FttH network.

Key telecom parameters – 2010; 2012
Sector | 2010 | 2012 (e)

Subscribers by sector (million):

Fixed broadband subscribers | 3.66 | 5.33
Mobile phone | 55.9 | 55.6
Fixed-line telephony | 12.2 | 12.2

Penetration by sector:

Fixed broadband | 10% | 12%
Mobile | 112% | 119%
Fixed-line | 26% | 25%
(Source: BuddeComm)

Market Highlights

Broadcasting revenue may reach UAH2.7 billion for 2012 in line with the expansion of DTTV services nationally. The sector stands to benefit from the launch of services from the Russian satellite provider Tricolor TV, though broadcasting generally remains plagued by large scale illegal viewing.

Ukrtelecom transferred mobile assets to a new unit, TriMob, which relaunched UMTS services in early 2012. The operator’s sale may be abandoned by the parent company.

By the beginning of 2012 Kyivstar had expanded its FttH network to more than 100 cities, covering some 3.8 million households.

Ukrtelecom decided in mid-2012 to suspend its FttN network for an FttH solution, asserting that the latter was cost-effective and a better long-term solution for the country. This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Ukraine. It provides further information on:

Market liberalisation and regulatory issues;
The impact of the global economic crisis;
Telecoms operators – privatisation, acquisitions, new licences;
Mobile data market developments in coming years in light of spectrum auctions and new license awards;
3G developments, regulatory issues and technologies including HSPA;
Broadband migration to an FttH architecture;
Historical and current subscriber statistics and forecasts;
ARPU statistics and forecasts.

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


1. Key Statistics
2. Telecommunications Market
2.1 Overview of Ukraine’s telecom market
3. Regulatory Environment
3.1 Law of Ukraine on Telecommunications
3.2 Regulatory authority
3.2.1 National Commission for Communications Regulation (NCCR)
3.3 Telecom sector liberalisation in Ukraine
3.3.1 Privatisation
3.3.2 Interconnection
3.3.3 Carrier selection and carrier preselection
4. Fixed Network Operators
4.1 Overview of operators
4.2 Ukrtelecom
4.3 Datagroup
4.4 Eurotranstelecom
4.5 Beeline Ukraine (VimpelCom)
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. Broadband Market
6.1 Overview
6.1.1 Ukraine’s emerging internet economy
6.1.2 Fixed broadband statistics
6.2 Asymmetric Digital Subscriber Line (ADSL)
6.3 Cable modems
6.4 Fibre-to-the-Home (FttH)
6.5 Wireless broadband
6.5.1 WiFi
6.5.2 WiMAX
7. Digital Media
7.1 Overview of broadcasting market
7.2 Digital Terrestrial TV (DTTV)
7.3 Cable TV
7.3.1 Volia Cable
7.4 Satellite-based digital pay TV developments
7.5 Digital TV
7.6 Broadband TV (IPTV)
8. Mobile Communications
8.1 Overview of Ukraine’s mobile market
8.1.1 Mobile statistics
8.2 Regulatory issues
8.2.1 GSM licences awards
8.2.2 CDMA licence awards
8.2.3 Third Generation (3G) mobile licences
8.2.4 Spectrum auctions
8.3 Mobile technologies
8.3.1 Digital
8.3.2 Third Generation (3G) mobile
8.4 Major mobile operators
8.4.1 MTS Ukraine
8.4.2 Kyivstar (VimpelCom)
8.4.3 Astelit/Life:)
8.4.4 Ukrtelecom (Utel)
8.4.5 Mobile Virtual Network Operators (MVNOs)
8.5 Mobile voice services
8.5.1 Prepaid
8.6 Mobile data services
8.6.1 Short Messaging Service (SMS)/Multimedia Messaging Service (MMS)
8.6.2 Push-to-Talk (PTT)
8.6.3 Enhanced Data for GSM Evolution (EDGE)
8.6.4 Mobile broadband
8.6.5 Unlicensed Mobile Access (UMA)
8.6.6 Smartphones
8.6.7 Mobile TV
8.7 Mobile content and applications
9. Forecasts
9.1 Forecasts – fixed broadband market – 2010 - 2013; 2020
9.1.1 Scenario 1 – higher fixed broadband subscriber growth
9.1.2 Scenario 2 – lower fixed broadband subscriber growth
10. Related reports
List of Tables andCharts
Table 1 – Country statistics – 2012 (e)
Table 2 – Telephone network statistics – 2012 (3)
Table 3 – Internet user statistics – 2011
Table 4 – Broadband statistics – 2012 (e)
Table 5 – Mobile statistics –2012 (e)
Table 6 – National telecommunications authority
Table 7 – Telecom revenue by sector – 2006 – 2012
Table 8 – Ukrtelecom financial data – 2008 - 2012
Table 9 – Datagroup subscribers by type – 2010 - 2012
Table 10 – Datagroup financial data – 2010 - 2011
Table 11 – VimpelCom (Ukraine) financial data – 2007 - 2012
Table 12 – VimpelCom (Ukraine) financial data by sector – 2007 - 2012
Table 13 – VimpelCom (Ukraine) subscribers by sector– 2007 - 2012
Table 14 – Intertelecom subscribers – 2005; 2007 - 2009
Table 15 – PEOPLEnet subscribers – 2007 - 2009
Table 16 – Fixed lines in service - 1995 - 2013
Table 17 – Internet users and penetration rate – 1999 - 2012
Table 18 – Internet subscribers and penetration rate – 2005 - 2013
Table 19 – VimpelCom broadband subscribers – 2008 - 2012
Table 20 – VimpelCom broadband ARPU – 2008 - 2012
Table 21 – Kyivstar FttH subscribers – 2010 - 2011
Table 22 – Total TV advertising spending – 2004 - 2011
Table 23 – Broadcasting revenue – 2006 – 2012
Table 24 – Cable TV revenue – 2006 – 2012
Table 25 – Cable TV subscribers – 2006 – 2012
Table 26 – Mobile operator operational data – Jun 2012
Table 27 – Mobile subscribers and penetration rate – 1995 - 2013
Table 28 – Total mobile market revenue – 2006 - 2015
Table 29 – MTS subscribers – 2004 - 2012
Table 30 – MTS revenue – 2004 - 2012
Table 31 – MTS ARPU – 2004 - 2012
Table 32 – VimpelCom (Ukraine) mobile revenue – 2007 - 2012
Table 33 – VimpelCom (Ukraine) ARPU – 2007 - 2012
Table 34 – VimpelCom (Ukraine) subscribers – 2007 - 2011
Table 35 – Astelit subscribers – 2008 - 2012
Table 36 – Astelit revenue – 2007 - 2012
Table 37 – MTS Value Added Service revenue – 2007 - 2012
Table 38 – Mobile broadband subscribers – 2007 - 2013
Table 39 – Forecast fixed broadband subscribers – higher growth scenario – 2010 - 2013; 2020
Table 40 – Forecast fixed broadband subscribers – lower growth scenario – 2010 - 2013; 2020
Chart 1 – Telecom revenue by sector– 2006 - 2012
Chart 2 – Ukrtelecom financial data – 2008 - 2012
Chart 3 – VimpelCom (Ukraine) financial data – 2007 - 2012
Chart 4 – Internet users and penetration rate – 2002 - 2012
Chart 5 – Internet subscribers and penetration rate – 2005 - 2013
Chart 6 – Mobile subscribers and penetration rate – 2000 - 2013
Chart 7 – MTS revenue – 2004 - 2012
Chart 8 – MTS value-added service revenue – 2007 - 2012

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