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New Market Study Published: Ukraine Telecommunications Report Q4 2012

Recently published research from Business Monitor International, "Ukraine Telecommunications Report Q4 2012", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 01/04/2013 -- The Ukrainian mobile market recorded strong growth in Q212 to mark the fifth consecutive quarter of net additions. However, we retain the view that the trend is unsustainable in the medium term considering the increasing market saturation. Also adding to the market's unpredictability is the likelihood of significant subscriber losses from the potential discounting of inactive SIMs.

Key Data

- Ukraine's mobile market grew by 2% in Q212, considerably faster than 0.6% q-o-q growth in the previous quarter and 1.3%$ q-o-q during the same period a year earlier.
- The market weighted average blended ARPU appreciated by 6.4% q-o-q in Q212.
- Demand for data service remains strong as Vimpelcom recorded an impressive 8.7% q-o-q growth in fixed broadband subscriptions in Q212.

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Risk/Reward Ratings

Ukraine is in 16th position of BMI's Risk/Reward Ratings (RRR) table this quarter after dropping one place from 15th position in our previous report. The country scores below the regional average in all four of our ratings categories due to a combination of regulatory, industry-specific and macroeconomic factors. These include a fast saturating mobile market, lack of competition in the 3G market, low ARPUs, limited regulatory independence and expected slowdown in economic growth.

Key Developments

In July 2012, incumbent operator, Ukrtelecom, revealed that it is considering rolling out a fibre-to-the-home network (FTTH), having suspended its plans for a large-scale fibre-to-the-building network (FTTB). CEO Igor Kravets cited the greater effectiveness of FTTH versus FTTB, and the instances where GPON/FTTH can be less costly than FTTB. BMI expects Ukrtelecom investment in upgrading its fixed broadband infrastructure to increase network capacity and help compete with smaller rivals, which it has underperformed in the fixed broadband market in recent years. However, given low incomes in much of the country, we believe the scope for FTTH roll-out to be limited and that roll-out should be incremental to minimise risk.

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