Business news from Ukraine

LEADING TELECOM OPERATOR OF UKRAINE KYIVSTAR PLANS TO INCREASE CONTRACT SUBSCRIBER BASE BY 20%

By the end of 2021, the mobile network operator Kyivstar plans to increase the base of contract clients by 500,000, President of Kyivstar Alexander Komarov told reporters on Wednesday.
At the end of 2020, the operator’s total client base was about 25.9 million mobile subscribers. At present, according to the operator, almost 90% of the Kyivstar network are prepaid mobile subscribers and the company has more than 10% are contract subscribers.
“The [number of] contract [subscribers] should grow by 500,000 new clients this year. This is a definite ambition of Kyivstar. We are generally supporters of identifying our client base and transferring it to more stable forms of connection,” Komarov said.
According to him, despite the fact that, in general, Kyivstar’s client base is stable (no more than 1% decrease year-on-year), in 2020 the prepaid subscriber base decreased 4%, which were redistributed into two segments: FMC (clients using fixed-line and mobile communication) and the contract subscribers.
“Our enemy of the contract is a very low average bill. The main means of transferring a client to a contract is a combination of a phone and payment for communication services. An average smartphone in Ukraine costs UAH 5,000-6,000, and communication services for 12 months – about UAH 1,000. Accordingly, we have very little of this added value to transfer a client to a contract. And in the gray market, the difference in price for a phone between a legal store and an online seller can reach 10-15%,” the president of Kyivstar said.
Kyivstar is a market-leading telecoms operator in Ukraine. It provides communication and data services based on a wide range of mobile and fixed-line technologies, including 3G. By the end of 2020, its services were used by about 25.9 million mobile subscribers and about 1.1 million fixed Internet customers.
The shareholder of Kyivstar is the international group VEON (earlier – VimpelCom Ltd.). The group’s shares are listed on the NASDAQ stock exchange (New York).

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UKRAVTODOR AND TURKEY’S DOGUS SIGN CONTRACT FOR BUILDING NEW BRIDGE

The State Agency of Automobile Roads of Ukraine (Ukravtodor) has signed an agreement for the construction of a new bridge in Kremenchuk (Poltava region) for UAH 11.249 billion with the Turkish company Dogus Insaat Ve Ticaret.
On the part of Ukravtodor, the contract was signed by the head of the road service in Poltava region, Ivan Krapovnytsky, from Dogus Insaat Ve Ticaret – executive director Tolga Akkas.
Ukravtodor noted that the new bridge will improve the optimization of logistics routes in the center of Ukraine by reducing travel times for road transport. This will be achieved by increasing the speed limit for trucks from 36.8-53.3 km/h to 72.9 km/h, buses from 35.7-53.4 km/h to 71.1 km/h, passenger cars from 39.6-55.3 km/h to 81.5 km/h.
“All plots that fall under the construction zone will be bought for state funds. If these are private plots where people live, or some other private plots, they will be bought out, transferred to the state ownership, and people will receive monetary compensation for this,” Krapovnytsky said.

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SINOHYDRO FROM CHINA TO SUE STATE-RUN UKRAVTODOR FOR TERMINATION OF CONTRACT IN UKRAINE

The Chinese company Sinohydro Corporation Limited intends to file a claim in international arbitration for the termination of the contract for the reconstruction of the bypass road around Zhytomyr by the State Agency of Automobile Roads of Ukraine (Ukravtodor).
According to the company’s statement, Sinohydro considers it unfair that Ukravtodor, having failed to effectively fulfill its contractual obligations, unilaterally decided to terminate the contract, while the Dispute Settlement Council (created under the contract together with Ukravtodor in May 2020) is still considering disputes surrounding this contract and has already ruled on some of them, allowing Sinohydro to renew the contract.
Sinohydro says the untimely transfer of a land plot for public use by Ukravtodor, the introduction of a number of design changes not provided for in the contract, failure to fulfill payment obligations, as well as force majeure in the form of the COVID-19 epidemic and many other factors influenced the project schedule and led to a violation of the terms of work.
“Since June 2020, facing an unfavorable situation caused by the fact that Ukravtodor did not complete the interim payment for construction work on time, and the continuing impact of the COVID-19 epidemic, Sinohydro has advanced over EUR 5 million to meet its contractual obligations and reduce the delay,” the company said.
It is emphasized that in comparison with other sections of roads under construction in Ukraine at the same time, this project is being implemented at a rather fast pace and is already nearing completion.
“Under the circumstances, the Dispute Settlement Council decided on the first contract dispute initiated by Sinohydro in September 2020. It agreed to extend the contractor’s deadline for construction work by 87 days. However, when the Council began considering at least four disputes over damages to Sinohydro, Ukravtodor unexpectedly announced the termination of the contract,” the report says.

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ODESA PORT-SIDE PLANT EXTENDS TOLLING CONTRACT WITH AGRO GAS TRADING

The board of JSC Odesa Port-Side Plant has extended a control for tolling gas processing with Agro Gas Trading LLC from September 1, 2020.
The plant said that the contract was extended until the moment when the new winner of the tender is selected, but no later than the end of 2020. As part of the prolongation of the contract, the terms of cooperation have been improved: from September 1, the price for one tonne of ammonia will be $41 and $60 per tonne for urea.
The Odesa Port-Side Plant recalled that the last announced tender was blocked in courts by one of its participants, and the procedure for selecting a supplier company approved by the supervisory board of the plant provides for a ban on out-of-tender selection.
“According to the current legal regulations, the decision to extend the contract with the current tolling supplier was the only one to which the board had the right, taking into account the existing injunction, and no alternative from the point of view of ensuring the stable operation of the plant,” the plant said.
The plant said that the continuity of the production process in terms of improving financial and social performance is a priority for the company’s management.

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KYIVSTAR PROVIDES POSSIBILITY TO REMOTELY SWITCH TO OPERATOR’S CONTRACT TARIFF

Kyivstar mobile operator launches the possibility to switch to the company’s contract tariff remotely, one can order free courier delivery of SIM cards and contracts throughout Ukraine.
According to the operator’s press release, both existing Kyivstar subscribers and new customers who decide to join the national telecoms operator’s network can use this service.
“For this, it’s enough to choose the best contract rate in the Kyivstar online store at shop.kyivstar.ua and place the delivery. During its confirmation, subscribers will be able to immediately enter all the necessary data to sign an agreement and receive an already completed document for signing. Delivery will be carried out at a time convenient for the subscriber by prior agreement,” Kyivstar noted.
Subscribers, in particular, can choose one of the Smart tariffs, which provide unlimited mobile Internet, unlimited times for calls in the network, from 120 to 3,000 minutes for calls to other numbers within Ukraine, as well as abroad, fixed Internet and other services at no extra charge.

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NUMBER OF GREEN CARD INSURANCE CONTRACTS IN UKRAINE UP BY 43%

The number of Green Card international insurance contracts signed by the member companies of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) increased by 43.23% in January-November 2019 compared to the same period in 2018, to more than one million.
According to the MTIBU’s website, the amount of accrued insurance premiums for the specified period increased by 28.05% compared to the same period last year, to UAH 1.541 billion.
At the same time, the amount of compensation paid on claims rose by 30.26%, to EUR 13.664 million, while the number of claims paid grew by 14.14%, to 5,296.
The MTIBU is the only association of insurers that carry out compulsory insurance of vehicle owners’ civil liability for damage caused to third parties.

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