Lewes, DE -- (ReleaseWire) -- 03/07/2014 -- The Ukrainian economic situation continues to be in the doldrums. Although economic stimulus may yet arise from assistance from Russia, as the Russian government attempts to retain the country within its economic and political orbit, the ongoing political uncertainty may put this financial help in jeopardy. GDP growth struggled to be positive in 2012, and is expected to have been similarly anaemic in 2013. Following downgrades issued by three rating agencies in late 2013, it is highly likely that further rating downgrades will be issued into 2014.
The political crisis has exacerbated the poor performance of the telecom sector, which shows little sign of growth further into the year. Indeed, according to the regulator telecom market revenue grew by only 0.4% in 2013, with the mobile, fixed-line, and internet sectors contributing 94.4% of the total. The regulator noted the continuing deficiencies in broadband connectivity in rural as well as urban areas, with household broadband penetration at only 37%.
As for major operators, Kyivstar reported a 7% fall in revenue in the third quarter of 2013, year-on-year, largely caused by declining mobile revenue as customers switched to lower priced bundled tariff plans – itself an indication of declining spend among consumers. Ukrtelecom reported a 1.6% year-on-year fall in revenue for the first nine months of 2013.
In the current political climate, telecom infrastructure has become a key target for those disposed to disruption. In recent days the incumbent Ukrtelecom reported that vandalism on equipment and fibre-optic lines had cut telephony and internet connectivity to the Crimean peninsular, which took days to restore. This disruption coincided with Russian forces having seized control of airfields and other key installations.
The severing of telecom links created difficulties not only for the residential and business sectors, but also for the emergency services. More recently still, it has been reported that mobile telephony networks in Crimea have been manipulated.
Such is the fundamental importance of telecoms that it is invariably the key component of a nation’s infrastructure which is targeted in times of civil strife.
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