The Ukrainian unit of Russia's Mobile TeleSystems will lease England-based Vodafone Group's brand for an undisclosed amount, both companies told journalists at a news conference Kyiv on Oct. 16.
The nation’s second largest wireless carrier with 20 million users, MTS Ukraine said it will expand the scope of its strategic partnership with Vodafone that started in 2008. Plans include rolling out third-generation mobile services and developing a “number of new services in the market using the Vodafone brand in Ukraine”
“The launch of 3G services under the Vodafone brand in Ukraine will commence in the coming months and will include the transition of MTS’s retail outlets and the majority of its dealerships,” Vodafone said in a statement after the event. “The Vodafone brand will not be used in territories currently not under the direct control of the Ukrainian government.”
Both sides stressed that the new agreement isn’t an “equity partnership.”
All the Ukrainian service centers will first be rebuilt and rebranded, followed by new rates being introduced.
“We always wanted to be the first on the market,” MTS Ukraine CEO Oleh Prozhyvalsky said. “Vodafone has the richest experience of work on foreign markets. It is always better to make friends with strong partner.”
Vodafone promises to integrate MTS subscribers to its international network, which includes mobile operations in 26 countries, giving users the same pricing plans in roaming as they will have in Ukraine as well as 3G technology. However, subscribers will be able to use their previous rates for as long as they want.
Ukraine accounted for about 8 percent of MTS’s revenue last year, according to Bloomberg.
“The MTS brand was valued at more than $12 billion last year by consultant Millward Brown Plc. Vodafone was valued at $36 billion,” Bloomberg reported.
Another Russian company, Vimpelcom’s Kyivstar, leads Ukraine’s mobile services market.
Kyiv Post writer Denys Krasnikov can be reached at [email protected]. The Kyiv Post’s IT coverage is sponsored by AVentures Capital, Looksery, and SoftServe.
