Rus News Journal

Problems of cellular operators in Ukraine

Foreign firms are revolted by changes of rules of licensing

As newspaper Wall Street Journal Europe has informed, accepted last month the Ukrainian authorities unilaterally the decision to raise telephone tariffs and to change conditions of granting of licences to operators of telephone cellular communication has caused rather negative reaction from foreign investors.

These changes, the newspaper considers, have struck blow to joint venture Ukrainian Mobile Communications plans (UMC), created in 1992 the companies an Ukrtelecom Deutsche Telecom, PTT Netherlands and TeleDanmark, and also on intentions Motorola to enter cellular service GSM in territory of Ukraine. Motorola has obtained the licence on GSM through joint venture Ukrainian Radio Systems created in last year (URS) and plans to enclose in it in a current of 15 years $500 million Shareholders UMC have planned the next three years to enclose in the $300 million joint venture, but at a meeting in Copenhagen have declared that will reconsider the plans if the Ukrainian government does not observe the promises of 1992 to give UMC the licence for frequency for GSM.
Since 1991 Ukraine has involved about $1 mlrd foreign investments, and investors repeatedly complained of difficulties which they should face in Ukraine. Here and the present decision of the Ukrainian authorities is perceived in the West as the next certificate to it. Officials UMC, for example, assert that change by the Ukrainian authorities of rules is directed on replacement of foreign competitors from quickly emerging market of mobile communication. Neither UMC, nor URS have not received frequencies GSM in September as it has been provided by agreements. Instead the government of Ukraine has demanded, that operators of mobile communication have till the end of the year updated the licences, and has entered tariffs for use of the frequencies, exceeding regional standards several times.
general director UMC Martin Dirk with indignation has declared that the company has enclosed $90 million (only $12 million has gone on test of technology GSM) in this astable country only in hope that frequencies GSM will be reserved for it, and the sizes of tariffs will be reasonable. I hope that the Ukrainian government realises that with decline of trust of investors to the country the international opinion on it inevitably worsens - has declared Dirk.
the Ukrainian government, in turn, is convinced that has no obligations under contracts and can freely change licensing system. Last week licences on GSM were received by the Yugoslavian company BK Telecom and the Ukrainian company Kiev Star.