Mobile telecommunications--Cell phones

More from the US Department of Commerce on mobile telecommunications:

Mobile Communications

Five Ukrainian operators - UMC, Kyivstar GSM, Golden Telecom GSM, DCC, and Wellcom - offer wireless mobile services in Ukraine in the following standards:
GSM900/1800 (UMC, Kyivstar GSM, Wellcom, Golden Telecom GSM), and D-MPS
(DCC). Late in 2003 the mass media announced that a major Turkish investor will form a joint venture with DCC to deploy a third nationwide GSM network. In the second half of 2004, JV Astelit started deploying the network. Wellcom was also actively expanding its existing network to cover new territories and regions.

In 2004 wireless mobile communications (MC) for the first time became the biggest subsector of the telecom industry in Ukraine. From January - October 2004 MC revenues amounted to UAH 7.58 billion or $1.43 billion, which is almost 100 percent
more than for all of 2003 (UAH 3.83 billion or $736 million). These revenues represent 43.59 percent of total telecom industry revenues. This successful financial performance for the first time ranks MC as the first communications sub sector in terms of revenue ahead of the longdistance and international wire line communications that historically led other industry sub sectors. The number of MC customers also doubled reaching 12 million (compared to 8-10 million customers of wire line telecom services). The market penetration for MC is 25.5 percent.

Thee mobile phone industry has been characterized by a lack of competition much like a lot of other sectors in Ukraine. This has been the case because the mobile phone companies havee been owned by person's close to the prior regime of Kuchma. They were and are "oligarchs," a term used here to describe them, the original meaning of which comes close to describing what they are. They have/had political clout as major owners of businesses. For this reason, they have been able to limit any competition. That is one reason why cellphone rates remain so high--no competition.

But, much like everything else in Ukraine, this is slowly changing. One of the major political figures sees fighting the oligarchs as the main problem in Ukraine. This is a typical solution here. The problem though is that it most often means state power meddling in economic affairs. What is really needed is transparency, openness and rule of law. If they concentrated on these, and they are slowly moving that way, the oligarchs would cease to be a problem.

Even so, there are still investment opportunities in mobile telecommunications in Ukraine. And equipment to support mobile telecommunications is an area of opportunity.

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