The partnership package offer combines ADSL Internet access and modems from Ukrtelecom, and GPRS services and SIM cards from Astelit’s life:) mobile brand to provide mobile users with more competitive tariffs and options. “We are happy to begin co-operation with Ukrtelecom, the largest fixed operator of the country, as we believe it is the first step into fixed-mobile convergence, which is the future of the world’s telecoms market. We hope that this pioneering initiative will lay the foundations for the new projects to come,” said life:) CEO Tansu Yegen.
This ground-breaking telecoms partnership brings obvious benefits to both parties. “The deal is expected to help Astelit enlarge its subscriber base and increase its data service revenues, while Ukrtelecom will gain access to the well-developed sale and distribution network of the life:) brand,” said Roman Khimich, a telecommunications analyst with the Kyiv-based Netton Consulting Group.
life:) claims largest EDGE coverage
Mobile operator life:) entered the Ukrainian market in 2005, and it currently offers mobile communications over 91% of Ukraine’s population, serving 6.33 million users. It also provides roaming capability in 193 countries in conjunction with over 500 roaming partners.
The operator was one of the first in the market to introduce EDGE technology, and now it offers EDGE coverage in 42 cities, which the company claims is the largest EDGE coverage on the market. As of Q2 2007, life:) has demonstrated 178% revenue growth vs Q2 2006. The company is owned by Turkcell (54.2%) and Ukrainian SCM Holdings (45.8%).
Their new partner Ukrtelecom is Ukraine’s government-owned telecommunications company with 10 million subscribers. It previously announced plans to attract 500,000 mobile subscribers by the end of 2007.
The company controls a more than 75% share of the fixed-line market in the country, and reported a 2006 profit of over USD 92.5 million, an almost 10% decline in profits compared to figures for 2005.
The state currently holds a nearly 93% stake in the company, with the remainder of the company’s shares held by the company’s employees. The state is expected to retain majority control of Ukrtelecom following the privatisation procedure, which has long been anticipated and is one of the most talked about privatisations on the Ukrainian horizon.
Ukrtelecom’s road to privatisation
Several potential bidders have expressed a keen interest in purchasing shares in Ukrtelecom, including western portfolio and institutional investors. In February, Russia’s telecoms investor Comstar-UTS, a unit of the diversified AFK Sistema holding, expressed an interest in purchasing a strategic stake in Ukrtelecom.
Meanwhile, Ukrtelecom intends to launch its 3G mobile communication services (UMTS standard) in November. The company has repeatedly failed to take advantage of its exclusive right to develop a 3G network since it obtained its licence almost two years ago.
Yevhen Shapovalov, Ukrtelecom’s deputy board chairman, referred to problems with purchasing equipment, blaming these technical difficulties for the delay.
The business roll-out will first start in Kyiv and then continue in five other major Ukrainian cities including Dnipropetrovsk, Odessa, Lviv, Kharkiv and Donetsk, as well as a further 12 oblasts. UTEL has an additional GSM roaming agreement with Ukrainian Radio Systems, operating under the Beeline trademark, which has a network that the company says covers more than 86% of Ukraine’s population.
