It took almost a year for the official iPhone 5S to get to Ukraine. But that looks really fast compared to 3G telecom technology, born in 2001, but only finally coming at year’s end to Ukraine. Conflict has already arisen over which providers should get which frequencies and how much it will cost them.
Third generation mobile interconnectivity, or 3G, means greater speed of data traffic via wireless signals – and faster internet connection on mobile devices. The 2G technology is less effective.
Ukrainian President Petro Poroshenko can’t be happy about the slow progress. “I cannot understand why Ukraine is almost the last country in the world in which there is no 4G. The answer is simple – corruption,” Poroshenko said.
In May, the National Regulatory Commission for Communication and Information announced an autumn tender for 3G licenses. Initially three companies were involved: MTS-Ukraine, Kyivstar and Astelit’s Life, the three big cell phone providers.
So it came as a shock to the industry when the commission on July 8 called the names of five companies, including Ukrtelecom and Intertelekom. Ukrtelecom technically still retains its original 3G license through its subsidiary TriMob.
The tender conditions will be announced on July 31, according to the commission. Once a company receives a 3G license, it must sign a contract with the armed forces, explains chairman of the Internet Association of Ukraine Tetyana Popova, as these frequencies are controlled by the military.
Kyivstar has protested the additional bidders. “The regulator under licensing or tenders for 3G/UMTS licenses must also limit the number of potential bidders to only those operators who do not have frequency resource in the 2 GHz bandwidth by itself or through its subsidiaries, and are ready to invest and develop telecommunications,” said Andriy Osadchuk, the company’s director of regulatory and legal support.
If these were the conditions, Ukrtelecom would not be able to qualify for the tender since it already covers 30 MHz to 2 GHz in each region.
The telecom majors have been preparing for years for the 3G revolution. There’s nothing to stop the telecom majors from rolling out their networks “within a few weeks,” says IT expert ain.ua’s Artur Orujaliev. Full 3G will first appear in big cities.
MTS-Ukraine and Kyivstar already offer 3G internet packages, including a technology based on a USB modem, which is sometimes referred to as “2.5G,” a transitional network.
According to the parliamentary committee on entrepreneurship, regulatory and antitrust policy, the state treasury may earn as much as Hr 1.03 billion on issuing 3G licenses in all regions of the country including Crimea, Forbes Ukraine reported.
However, at its July 8 meeting the national commission said that it will sell 3G licenses for Hr 200 million apiece, according to the RBC-Ukraine news agency. The new number comes from basic pay rates for 30 MHz approved by the Cabinet in 2006. This will avoid the need for a competitive tender.
There is discord, however. National commission member Volodymyr Oliynyk says that Hr 200 million is well below market value. “If the licenses are bid for one by one, the budget can get Hr 3-4 billion,” he said.
Operators have their own opinion about why licenses should not cost much. Kyivstar’s Osadchuk, for instance, says market revenues have dropped.
The country’s first attempt to develop 3G dates back to 2009, when the national commission issued a 3G license to then state-owned telecoms behemoth Ukrtelecom, later acquired by Rinat Akhmetov.
However, it didn’t have money to build a network. “In recent years, the commission has worked in favor of only one operator – Ukrtelecom”, says Oleksandr Parashchiy, head analyst at Concorde Capital. Ukrtelecom has always, however, denied any shady dealings.
After
the sale of Ukrtelecom to the Austiran EPIC, says telecoms analyst Ilia Kenigshtein, the state did not put up for sale for
3G-frequency communications. As a result, Ukrtelecom service
did not develop and competitors in this market were not allowed. “Why? To
maintain a monopoly and thsu make Ukrtelecom more expensive. In the meantime,
Ukraine only in Europe without normal communications standards.”
It was only with a change in leadership at the National Regulatory Commission for Communication and Information after the EuroMaidan Revolution – with Andriy Semenchenko taking Petro Yatsuk’s place – that progress was restarted.
However, it’s 4G and even 5G technologies that the global market is more interested in now.
Kyiv Post business journalist Evan Ostryzniuk can be reached at [email protected].
