The Ukrainian mobile communications market is “rolling downhill” – President of Kyivstar

The Ukrainian mobile communications market is “rolling downhill” – President of Kyivstar

Oleksandr Komarov , president of the Kyivstar company, spoke about the prospects for Ukrainian telecom in an interview with Interfax-Ukraine .

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According to the President of Kyivstar, the Ukrainian mobile communications market is in a long-term downtrend, so it continues to descend from a certain crisis slide that formed after February 24th. According to Alexander Komarov, it is only a matter of time before the company goes negative.

“I will be very happy if we reach the bottom before the end of this year. If we ended the first quarter with +15%, now it’s a few percent … and you understand that it’s only a matter of time before we pass this limit and go negative”

Alexander Komarov,

President of Kyivstar

The President of Kyivstar clarified that this applies only to income, since things are much worse with the margin, because the structure of income has changed – international income has grown a lot, which is a priori lower than the margin.

“In general, marginality in some countries is generally negative. It is weighted, probably around 10%. But you need to understand that the margin of about 10% in a reinvested business is more than 20%.

Alexander Komarov,

President of Kyivstar

This is due to a number of factors: a large number of socially significant services – free roaming for IDPs abroad and communications in the occupied territories, direct charitable initiatives ( UAH 300 million on UNITED24 ), inflation and devaluation.

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At the same time, the President of Kyivstar directly confirmed that the tariffs for mobile communication will grow, and this will happen much slower than inflation, and it will have a greater impact on subscribers of older tariff plans.

“We have certain internal rules, we have an up-to-date tariff line, which we do not touch when we modernize the base and review the volume of services consumed, the price paid.

I expected that next year the average ARPU would certainly grow by 6-7% compared to the current one. The current ARPU is about UAH 93. It is clear that for some customers who are on the old tariff plans, this may be a higher growth, for some there will be no changes at all.”

Alexander Komarov,

President of Kyivstar

Separately, Alexander Komarov drew attention to the need to exempt from taxation the range of free social services provided to the subscriber – the government has not yet met the needs of mobile operators, despite their appeals. He called the provision of 2100 MHz frequencies for temporary use and the allocated 2300 MHz for a pilot project as a positive moment. At the same time, the president of Kyivstar criticized the increase in the rate for the use of radio frequency resources (RFR) by 10% in 2023 and suggested, as an alternative, the legalization of the use of an additional 2100 MHz spectrum with a rent for these frequencies.

For the first half of 2022, Kyivstar put into operation 230 new base stations and plans to reach 70% of last year’s volume (550-600) by the end of the year. During the war, 300 base stations were damaged at Kyivstar, of which only 24 are not working yet – “these are simply razed to the ground.”

The day before, Kyivstar reported for the 2nd quarter of 2022: the number of subscribers fell by 4.3%, to 24.8 million, and total operating income from mobile services increased by 4.5%, to UAH 6.9 million.

Kyivstar on the results of the 2nd quarter of 2022: growth in operating income, despite a decrease in the subscriber base

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