Business news from Ukraine


The Vodafone Ukraine mobile communications in April-June 2019 saw UAH 3.8 billion in revenue, which is 20.7% more than a year ago.
According to the financial report of the operator, its net profit for the period remained at the level of 2018 and amounted to UAH 511 million.
Operating Income Before Depreciation and Amortization (OIBDA) increased 13.8% and reached UAH 2 billion, OIBDA margin amounted to 51.7% (54.9% in the second quarter of 2018).
“The main reason for Vodafone’s revenue growth was the increase in the number of data users and the consumption of data services. The traffic volumes are growing due to the activity of 4G users: for example, the 4G client Vodafone used 7.7 gigabytes of traffic per month on average. This is twice as much than 3G clients use. The total volume of Internet traffic in the Vodafone network has doubled over the year,” the operator said in the report.
At the same time, the company said that according to the results of April-June, Vodafone Ukraine had the lowest ARPU (average revenue per user per month) in the market – UAH 61.
Income from trading activities in the second quarter increased thanks to the expansion of own retail. “Today Vodafone Retail is one of the largest retailers in the country. The company’s trading network today has about 240 own stores. Vodafone stores offer only certified products: smartphones, various gadgets, wearable electronics, routers, accessories. You can also connect any Vodafone services in the stores and get qualified advice from the company’s experts,” the company said in the press release devoted to the financial statements of the company.
In addition, according to the results of April-June, the number of Ukrainian settlements covered by 4G increased four times. Today, Vodafone network is available to 62% of Ukrainians and covers more than 4,000 settlements.
According to the results of the second quarter, the number of Vodafone Ukraine customers amounted to 19.6 million, while according to the results of the second quarter of last year, the operator had 20.3 million customers in Ukraine.
“Among the growth factors, launch of mobile number portability service in Ukraine can be noted. In May-June, 3,657 customers used the service to go to the Vodafone network with their number,” the company said.

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The Kyivstar mobile communications operator has launched Network Expert application for analyzing the quality of the network operation, the operator reported on Wednesday.
Reports that subscribers will transmit through the application will help plan network expansion and installation of new equipment.
The application helps to check the quality of coverage of the mobile operator’s network, the quality of telephone calls, the speed of the mobile Internet, and the quality of service provided in roaming.
The Network Expert monitors the network status of the operator’s network and, in the event of difficulties, sends reports directly to the company’s technical experts. Also, subscribers can independently check and send information through the application, without the need to make calls to the Call Center, Kyivstar said.
The application is available for Android-smartphones.
Kyivstar is the largest Ukrainian mobile operator. It provides communication and data services based on a wide range of mobile and fixed technologies, including 4G. As of the end of 2018, 26.4 million mobile subscribers and about 0.9 million fixed Internet clients used its services.

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The mobile communications operator lifecell in 2018 saw UAH 1.301 billion in net loss, which is 2.58 times more than in 2017 (the loss of UAH 503.6 million), according to financial statements of its parent company Turkcell (Turkey) posted on its official website.
Revenue of the operator grew by 8.06%, to UAH 5.269 billion.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 8.2%, to UAH 2.762 billion, and EBITDA margin increased 25.2 percentage points, to 52.4%.
Capital investment of the operator in 2018 tripled, to UAH 4.032 billion, while in 2017 the operator invested UAH 1.33 billion.
The active subscribers’ base last year narrowed by 8.8%, to 7.3 million clients, and total number of subscribers in the network of the operator decreased 10.8%, to 9.9 million. Average revenue per user (ARPU) grew by 26.6%, to UAH 42.80, and ARPU of the active clients’ base rose by 20.1%, to UAH 57.30.
The number of minutes used by subscribers for voice data transfer grew by 12% in 2018, to 144.9 minutes.
Saturation of smartphones in the lifecell network as of late Q4 2018 reached 75.9%.
In the fourth quarter of 2018, the net loss of lifecell increased 4.07 times and amounted to UAH 730.1 million, while revenue grew by 11.6% to UAH 1.417 billion.
EBITDA increased by 3.37 times, to UAH 1.084 billion, while EBITDA margin rose by 50.4 percentage points, to 76.5%.
Capital investments in the last quarter of 2018 amounted to UAH 933.3 million, which is 2.25 times more than in the same period of 2017.
The Turkish company said that EBITDA growth was thanks to effective cost control measures, as well as the positive impact of the new IFRS standards.
At the same time, the company continues saying that the outflow of the subscriber base is mainly due to the general trend of reducing the use of SIM-cards in the country.
In addition, the operator reported on the increase in the number of active 4.5G Internet users (lifecell) for three months to 33% of the total number of mobile data users, and also that lifecell was the first in the Ukrainian market to deploy the NB-IoT network for smart devices.
As reported, in 2018, lifecell saw net loss of UAH 503.6 million compared to UAH 928.3 million of net profit in 2016, while the operator’s EBITDA in 2017 decreased by 2.2%, to UAH 1.326 billion.
Lifecell is the third largest mobile operator in Ukraine.

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The Kyivstar mobile communications operator has launched the Mobile ID service, allowing the digital identification of persons for obtaining e-services using the mobile number. According to a press release of the operator, the service is available in Kyiv, Dnipro, Ivano-Frankivsk, Odesa, Kharkiv, Kherson, Vinnytsia, Khmelnytsky, Lviv, Zhytomyr and Cherkasy. In total, these cities have 22 open points for issuing Mobile ID SIM-cards and certificates from the accredited key certification center of justice authorities. They can be received by individual entrepreneurs, contract subscribers and corporate clients of Kyivstar from any locality of Ukraine.
“Now we are focusing our efforts on connecting the cities, which are regional centers. We have already covered 11 cities. In the beginning of 2019, we will announce the opening of new locations. And we will move further “deep countryside” to make Mobile ID connection available in small cities,” the press service of the operator said, citing Director for Business Development in the Corporate Market in Kyivstar Yevhen Krazhan.
The operator said that the project was implemented in partnership with the accredited key certification center of the judicial authorities, which is an authorized provider of electronic trust services. All points, where Mobile-ID SIM-cards are issued, have been duly certified, as well as the staff responsible for connecting the service to users.
According to Kyivstar, the large-scale implementation of Mobile ID will simplify the provision of services to the population by government and commercial institutions, eliminating the intermediary link between the source of services and the customer and, thus, reducing excessive red tape, queues and costs.
The Mobile ID service can be used to obtain electronic public services (driver’s license, car registration, residence registration, income declaration, voting and petitions, receiving social assistance); health care (medication, access to the history of the disease, monitoring indicators) and education (access to the website of the educational institution and personal account, distance education, receiving certificates, extracts). It can also be used for the financial and banking sectors (payments, opening/closing accounts, receiving references, insurance, loans); corporate market (login, workflow, VPN, mobility), for online purchases, auctions and other services.
To connect to the Mobile ID, a subscriber needs to contact the certified connection point with the original passport and identification code and replace the SIM card with a new having Mobile ID support for free.
In this case, the subscriber receives a free digital certificate of a natural or legal person for a period of one year. The cost of using the Mobile ID service is already included in the tariff plans with a monthly fee of UAH 225 per month, for other tariff plans it is UAH 50 per month.
The operator invites service providers to cooperate to jointly expand the online services available to the public.

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The mobile communications operator Kyivstar in April-June 2018 saw an 11.4% rise in revenue year-over-year, to UAH 4.521 billion, the Veon international group (VimpelCom Ltd. before rebranding) has said in a quarterly report on Thursday. According to the report, over the period Kyivstar increased earnings before interest, taxes, depreciation and amortization (EBITDA) by 8%, to UAH 2.49 billion, EBITDA margin fell by 1.7 percentage points (p.p.), to 55.1%. Revenue from mobile communications services in Q2 2018 came to UAH 4.2 billion, which is 11.4% more than a year ago.
The press service of Kyivstar reported that data consumption in April-June 2018 grew by 139% year-over-year, to 1.8 gigabytes per user on average. Voice service consumption remained stable: in Q2 2018 on average 580 minutes per user was recorded, which is 1.2% more than a year ago. The number of mobile Internet users over the period grew by 21% year-over-year, to 13.5 million, and the total number of active users totaled 26.5 million, which is 400,000 more than a year ago.
“The growth in the consumption of services, the increase in the number of users, the launch of new communication technologies are just a few qualitative changes that have positively affected our financial performance in the second quarter of 2018,” acting Kyivstar president Oleksandr Komarov said in a report. The minutes of use (MoU) increased by 1.2%, to 580 minutes, and ARPU (average revenue per user per month) of mobile communication increased by 9.6%, to UAH 52.
The revenues of the mobile operator from fixed-line services in the second quarter increased by 7.3% to UAH 297 million, including revenues from fixed-line Internet that increased by 8.5% to UAH 185 million, while the number of users increased by 6.5% %, to 0.858 million. ARPU for fixed-line Internet grew by 4.3%, to UAH 72.
Capital investments, with the exception of payment for licenses, for the reporting period amounted to UAH 927 million, which is 31.5% more than in the same period last year. At the end of the second quarter of 2018, the “3G Kyivstar” service was available in the territory where 74% of Ukrainians live. Kyivstar said that in the first half of the year its revenues increased by 10.8% compared to the same period in 2017, to UAH 8.785 billion, while EBITDA increased by 12%, to UAH 4.902 billion.
At the same time, revenues from mobile services for six months increased by 11.2% to UAH 8.149 billion, and from fixed-line telephony – by 3.6%, to UAH 593 million.
In the second quarter of 2018, Kyivstar transferred almost UAH 4 billion of taxes, fees and payments for licenses to the Ukrainian budget, and for the first half of the year the amount of all payments to the national budget reached UAH 6.8 billion. Kyivstar is the largest Ukrainian mobile communications operator.

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The three largest Ukrainian mobile communications operators have received licenses authorizing them to implement 4G technology (LTE) in the 1800 MHz band. According to reports of the operators, the National Commission for Communications and Informatization Regulation (NCCR) on April 12, 2018 issued licenses for the use of radio frequency spectrum in the 1800 MHz band to launch 4G communications from July 1, 2018.
Kyivstar, Vodafone Ukraine and lifecell won lots at a tender, according to the right of first refusal. The three companies bought lots of 25 MHz, 20 MHz and 15 MHz for UAH 1.325 billion, UAH 1.06 billion and UAH 795 million respectively. In addition, Kyivstar bought the fourth and sixth lots for UAH 612 million and UAH 900 million. Vodafone Ukraine bought the fifth lot for UAH 742 million.
As reported, the three operators after the tender held early March paid UAH 5.434 billion for 75 MHz in the 1800 MHz band for the right to deploy 4G communications standard. Earlier the companies paid UAH 2.456 billion for 40 MHz in the 2600 MHz band after a tender held at the end of January 2018 for the introduction of 4G. Then lifecell bought two lots for 15 MHz for UAH 909.25 million, Kyivstar – three lots for 15 MHz for UAH 916.3 million and Vodafone Ukraine – two lots for 10 MHz for UAH 631 million.
The operators plan to launch 4G in the 1800 MHz band in July 2018.