KYIV, October 20 – Golden Telecom plans to invest up to $21 million in its mobile, data, voice, and Internet business in Ukraine over the next year, its chief operating officer said.
Golden Telecom is the Ukrainian unit of Russian Golden Telecom Inc.
“Over the coming year…for the overall business we will probably commit something like $15-21 million in investment,” Jeff Howley told Reuters in an interview late on Thursday.
“Our investors are very conservative,” he said. “Ukraine does not have a very good reputation on a global basis in terms of places to invest money.”
Golden Telecom started working in Kiev in 1996 and was the country’s first GSM-1800 operator. It later developed voice and data services, to date investing some $60 million in Ukraine.
Howley said doing business in the ex-Soviet state had been an uphill battle, but that Golden Telecom GSM now had 35,000 clients and expected to add another 25,000 by the end of 2001.
Golden Telecom, which currently provides GSM service in Kiev and the Black Sea port of Odessa, would expand its network into Dnipropetrovsk in eastern Ukraine in the near future, he said.
“Our strategy is not really to cover the entire territory of Ukraine because we do not feel that is something that will provide us with big returns,” said Howley.
He said that Golden Telecom was targeting cities with a population of one million or more, and would also limit voice and data services business to bigger cities.
But Howley said that Golden planned to aggressively develop its Internet business nationwide, following in the footsteps of its major shareholder, Golden Telecom Inc (GTI) in Russia.
“The Internet side is a big piece of our strategy,” he said.
Golden Telecom established an Internet presence in several Ukrainian cities by buying one of the country’s leading providers, Sovam Teleport, which uses the brand Svit Online.
Howley said the company would expand Internet services in smaller cities across the regions in future, adding: “Internet penetration in the regions does have a positive trend.”
The Internet is just taking off in Ukraine. According to the State Telecommunications Committee, the number of Internet users in Ukraine will be around 320,000 by the end of this year compared to 190,000 at the end of 1999.
