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"Ukraine Telecommunications Report Q2 2014" Published

Recently published research from Business Monitor International, "Ukraine Telecommunications Report Q2 2014", is now available at Fast Market Research

 

Boston, MA -- (ReleaseWire) -- 05/05/2014 -- The ongoing crisis in Ukraine will likely filter down to the telecoms market as well, after operators reported damaged networks and instances of network blackouts, causing them to temporarily close retail outlets in Kiev. Crimea looks set to be annexed by Russia and there is a risk that the likes of Ukrtelecom will not be able to operate in the region once it legally becomes part of Russia. We have downgraded our broadband and internet forecasts as a result of this and expect to see revenue slowdown for some of the major players over the course of 2014. A possible silver lining is that the change in Ukrainian government could see the acceleration of the 3G licensing process, which has artificially held the market back for years and left it with the lowest mobile broadband penetration. We remain bearish on this possibility while the government has more pressing security concern, before a technical review of the spectrum allocation can be undertaken.

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Key Data

- The uptake of broadband services is low, with penetration estimated to have reached just 17.8% at the end of 2013.
- Particularly significant is the lack of 3G service development, with 3G subscriptions accounting for just 2.6% of the mobile market at the end of 2013, by far the lowest in the region.
- Ukraine's mobile market is expanded by 6.9% in 2013, down from the strong 9.2% in 2012, due to market saturation and the possibility of inactive subscription deduction.

Key Developments

Ukraine's National Commission for the State Regulation of Communications and Informatization (NCCIR) believes that the recent change in government in March 2014 will lead to a more positive and proactive approach with regards to the licensing of 3G services. The 2100MHz band required for 3G services remains in the hands of the military and is viewed as an important resource in ensuring national security, despite the fact that a block of 2100MHz spectrum is already being utilised by incumbent Ukrtelecom.

During February 2014, Ukrainian mobile operators MTS Ukraine and Kyivstar were forced to temporarily close retail outlets in central Kiev, based in the neighbourhood close to Maidan Square. Furthermore, Ukrtelecom reported that several of its key telecommunications nodes in Crimea were repeatedly blocked and switched off on March 1 2014. This left many subscribers without access to fixed phone, internet and mobile services throughout the day, severing voice and data connectivity between Crimea and the rest of the Ukraine. Network damage and loss of sales is said to be minimal.

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