The three biggest Ukrainian phone carriers – Kyivstar, Vodafone Ukraine, and lifecell – bought Ukraine’s first 4G licenses at an auction on Jan. 31.
The mobile operators bid about $88.3 million for seven different lots at the auction held to sell radio frequencies around the 2600 MHz band, which is suitable for rolling out 4G in Ukraine.
The first big cities – Kyiv, Lviv, Dnipro, Kharkiv, Odesa – will be connected to 4G in April. Tariff plans are yet to be disclosed. 4G is about four times faster than 3G; and Kyivstar’s reported that about 17 percent of its users’ devices are compatible with 4G.
Lifecell won the first two lots for $32.7 million. Kyivstar bid a total of Hr $32.9 million on three subsequent lots. Vodafone Ukraine won the last two, bidding $22.7 million.
During the auction, the price went up by around $6 million from the starting prices. The companies are yet to pay the money – they have a month to transfer it.
Despite purchasing the fewest lots, Vodafone Ukraine CEO Olga Ustinova says her company achieved its goal at the auction.
“Our strategic task was to get a wider, pure range that does not conflict with other users, including the military. We are satisfied with the results of the auctions, because we’ve received a solid band of 10 GHz, which will be enough to provide capacity and unhindered construction of 4G networks in all regional centers, including Zhytomyr and Zaporizhzhya, where there are restrictions on other lots,” Ustinova said after the auction on Jan. 31.
Kyivstar CEO Peter Chernyshov is also pleased with the results of the auction, while Kyivstar is to pay the biggest sum of money of all the operators.
“As planned, we purchased three lots providing a continuous band, which makes it possible to provide services at the highest possible speed, realizing that the telecom market is developing very rapidly, and we will soon need additional frequencies for the full launch of internet of things products,” Chernyshov said on Jan. 31.
“The auction turned out to be competitive, which underlines the good preparation of the regulator and the interest of the market,” he said.
The frequencies used to belong to oligarch Rinat Akhmetov’s company MMDS-Ukraine (SCM group), which owned the rights to use these frequencies since 2010. Reportedly, Akhmetov’s telecoms company MMDS-Ukraine obtained 2600 MHz licenses without a tender, and now he’ll receive $17.9 million in compensation, as the government requisitioned the bandwidth from him to sell to the mobile operators.
Another auction, for frequencies in the 1800 MHz band, is scheduled for March, and is expected to bring in almost $143 million. They will cost more; the band is the most popular worldwide for the high-speed wireless communication for mobile devices, or LTE, and more suitable for smaller towns, as the cover bigger territories with the signal.
In total, the government will receive around $218 million through the two tenders.
Yuliya Kovaliv, head of the National Investment Council, says that the companies will invest more money into Ukraine’s telecommunications infrastructure since they also need to purchase the appropriate equipment.
“We see a commitment coming from all telecom operators to invest not only in acquiring the licenses but also in the equipment,” Kovaliv told the Kyiv Post.
Back in 2015, the operators paid $309 million for the 3G licenses.
Kyivstar, Vodafone Ukraine, and lifecell service around 55 million SIM cards in total.
The Kyiv Post’s IT coverage is sponsored by Ciklum. The content is independent of the donors.
