Confusion reigned last week as government officials first implied, and then denied, that Ukraine's sometimes tense relationship with the International Monetary Fund had finally broken down.
Prime Minister Valery Pustovoitenko, no less, put the fat in the fire Thursday Sept. 25 when he appeared to infer that the IMF would halt its flow of credits to Kyiv. 'At the IMF and World Bank annual meeting, the IMF advocated the termination of monetary aid to Ukraine,' the prime minister said during a Cabinet press briefing. National television news later reported Pustovoitenko as saying that the IMF had canceled its $540 million Stand-By credit to Ukraine due to Kyiv's failure to meet the mutually agreed budget deficit limit for August. Newspaper reports the next day told a similarly gloomy tale.
'Game's Up,' read the terse headline above national broadsheet Den's report of the affair; 'Ukraine May Go Without Financial Support,' read a more circumspect Kievskie Vedomosti headline.
Yet as Friday Sept. 26 wore on, denials
10,000 beeper users across Ukraine, which may or may not make the company the city's largest.
With pager companies great and small turning in good if not spectacular profits, the success of this particular market appears rooted in a textbook case of what happens when private enterprise is left alone.
'The main thing is, the government has stayed out of this industry,' said Bar-Ness.
In 1994, Ukraine's Communications Ministry decided simply to conduct a tender for the right to operate pager services in Ukraine. Since the cost of entry into the Ukrainian beeper business was low, a large number of companies were able to compete for licenses.
'To start up a pager company here you need a minimum of $50,000 for equipment, and another $5,000 during your first months of operation,' said Burdyashkin.
These initial costs pale next to the massive investment required to introduce other communications technologies, such as cellular phone networks or fiber-optic international telephone links.
Perhaps more importantly, the bane of Ukrainian business the government inspector – has played a relatively benign role in the pager market.
'We don't really get bothered by the government that much,' said Dorofeev. 'Sure the tax police come every six months for a scheduled visit and about every three months unannounced, but we just show them our books and they go away. That's what accountants are for; and we can keep taking care of our customers without real problems from the government.'
Over the last two years, both the demand and supply curves in the Ukrainian pager market have shifted down and to the right, with direct benefit to the consumer. Radiokom charged $320 for a beeper when it entered the business in 1994, and now charges $135, according to Burdyashkin. 'We've introduced state-of-the-art transmission equipment, which can operate at 6 to 7 times the capacity of the previous generation transmitters. This has enabled us to sell the customer a less-expensive pager,' said Bar-Ness. Still, customer bases vary, and companies have already identified their market niches. Beeper Paging is focusing on the larger company which requires a beeper network for perhaps dozens of employees.
'Our goal is to provide good service – some people say ФWestern,' but the real word is simply Фgood' – service to our customers and to provide them communications solutions,' said Bar-Ness. 'Our sales personnel are instructed to look at the customer's needs and sell him the communications equipment that he needs, rather than just the stuff that we have.'
At the other end of the spectrum Radiokom, with its single transmitter on the city television tower, and bare-bones service of basic beeper coverage for metropolitan Kyiv, has found its market slot in catering to the individual Ukrainian businessman.
'Although it's hard to be precise, I'd say that most of our clients are individuals who want to be reachable day or night, and a beeper is a good alternative to a much more expensive cellular phone,' said Radiokom's Burdrashkin. The latest entrant into the market is U-Page, a powerhouse backed by $5 million from such telecommunications giants as Dutch PTT Telecom. The firm will begin offering service this month.
'We see the potential of this market as outstanding,' said Cor van Ingen, a U-Page manager. 'Initially we expect up to 10,000 customers, and in 10 years the market could grow to hundreds of thousands.'
Bar-Ness of Beeper Paging said he is not afraid of the new colossus.
'U-Page is setting out to do what we're already doing,' he said. 'We're ready to compete with them.'
Doforeev of Link Telecom said the market is big enough that U-Page won't swallow his company's small-scale network. 'A big company like that [U-Page] cannot provide the basic service at the reasonable price that we can,' he said. 'Let them try to get a share of the market – they'll have to work for it.'
