8/14/2019 Ukranian Mobile Market

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Ukrainian Mobile market review 2008

Ukraine is one of the European eastern countries experiencinghighest economic growth in the last decade and holdingconsiderable business potential. With over 46.3 million people in

603,700 km², its GDP per capita is positioned at $6,900, lower thanneighbouring states but with great improvements seen in the last 3years.

 These improvements are mainly driving a increase in consumerpurchasing power, spurring business opportunities and increasingUkrainian’s market attractiveness for external investments.

Some remarks to point out: (i) legislative frameworks, tax andprivatization levels have been improving over the years althoughgovernment involvement in the telecom sector has presented some

obstacles in the recent past (e.g., the award of the only 3G licenceto the state-owned fixed-line monopoly Ukrtelecom) (ii) Over 37% of the population lies below the poverty line and may only betargetable through low-value product and service offerings or not atallow-value product and service offerings or not at all.

In terms of telecom KPIs, revenues in the Ukrainian mobile marketare voice service-driven and there is extremely limited room foradditional mobile voice penetration, which has reached a 111%according to latest broker reports. Data traffic as percentage of services revenues remains very low with levels of less than 12%,

unveiling room for growth, as voice revenues were flat or evendecreasing in the last year.

Although usage is fairly high in Ukraine (about 140 MOUs per monthand subscriber), low per minute voice revenue is keeping UkrainianARPU among the lowest in Europe, with less than 5€ of monthlyARPU (average revenues per user). This is mainly due the hugediversity of small operators in the country, with small market sharerates and contributing to churn and intensifying price pressures.

As main representatives of the telecom scene, we find Kyivstar, GSMoperator with 23.87M clients (Telenor, Alfa Group), UMC GSM andCDMA2000 operator with 19.92M clients (MTS) and Astelit, GSMoperators with 9M clients (belonging to Turkcell & SCM Holdings)and finally URS, GSM operator with 1.9M clietns. Second tieroperators in the market would involve, Velton Telecom, ITC,Intertelecom and Peoplenet slightly over 100K clients each.

 The Ukrainian customer base is almost completely prepaid, whichcontributes to high levels of overall market churn if we comparethem with the average levels of western and central Europe. Prepaidvs. postpaid split is around 94% vs. 6%.

Find next a brief video slide with the data remarked within this post.

8/14/2019 Ukranian Mobile Market

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CVA