Released on = August 31, 2006, 2:06 am

Press Release Author = QArea

Industry = Telecommunications

Press Release Summary = The National Commission for Radio Communication of Ukraine
has issued to almost all Ukrainian GSM operators and some CDMA operators various
licenses for exploiting certain standards that are considered included to 3G. Up to
the present time only UkrTelecom, the national telecommunications operator and major
fixed line telephony provider, has obtained the one and only true 3G license in
Ukraine

Press Release Body = by Oksana Lyutikova
QArea Analyst
3G coming to Ukraine

The 3G family of standards such as WCDMA or UMTS has been developed by International
Telecommunication Union (ITU), and is otherwise called International Mobile
Telecommunications 2000 (IMT-2000). It covers 5 smaller standards, namely: WCDMA,
CDMA2000, TD-CDMA/TD-SCDMA, DECT and UWC-136. According to the IMT-2000 standard,
the 3rd generation mobile connection should be provided in an integrated network
capable of data transfer: not less than 144 Kbps for highly mobile users (up to 75
miles per hour), 384 Kbps for low mobile users (up to 1.8 mile per hour), and 2.048
Mbps for immobile users within short distances.
The National Commission for Radio Communication of Ukraine has issued to almost all
Ukrainian GSM operators and some CDMA operators various licenses for exploiting
certain standards that are considered included to 3G. Up to the present time only
UkrTelecom, the national telecommunications operator and major fixed line telephony
provider, has obtained the one and only true 3G license in Ukraine.
Although UkrTelecom obtained 3G license in 2005, it seems reluctant to develop the
new standard from zero. Though the three major mobile providers of Ukraine, who
applied for the 3G license even earlier than UkrTelecom obtained the one, have
already reported their 3G pilot networks passed tests successfully and are still
awaiting for The National Commission for Radio Communication of Ukraine to start the
tender, as it plans to sell but 3 licenses till the end of the year. During the
press conference, the UkrTelecom top managers announced, the company is planning to
develop its 3G network in a few phases. First, the network architecture and
equipment supplier are to be selected. Then UkrTelecom is planning to deploy its 3G
network in Kyiv in 2007. \"Afterwards, we are planning to expand our network to
other regions of Ukraine\" said Igor Syrotenko, UkrTelecom vice president of the
board during UMTS forum, in Kyiv. He said it is planned to invest about 700 mln USD
for the network development within next 5 years (while according to experts, the
mobile segment of UkrTelecom needs 800 mln. USD yearly). As per company prognosis
by the year 2010 3G-will have 4 mln subscribers, while by the year 2013 their number
will reach 9 mln. Yet, it is unclear whether it plans to attract active users or
automatically subscribe for 3G multimedia content and services every wireless
UkrTelecom user.
UkrTelecom being reluctant to build the 3G infrastructure, GSM and CDMA operators
are signaling their readiness to take their time in building the network themselves.
UMC, Kyivstar, ITC and Telesystems of Ukraine (having UkrTelecom as one of the
founders) announced of having built and successfully tested or building and testing
the pilot 3G networks in Kyiv and some major cities of Ukraine with population
exceeding million inhabitants.
It should be noted that GSM network providers like Life:), UMC, Kyivstar have
already built their EDGE networks. The EDGE networks are characterized with data
transfer rates comparable to the 3G characteristics for mobile users distant from
the base station transceivers when receiving the reflection return in signal (i.e.,
the decrease up to 300 to 400 Kbps) which is quite enough for downloading various
mobile content and value added services. And this seems to be the limit for GSM
standard in general and Ukrainian GSM operators in particular.
In this connection, CDMA mobile providers have more perspectives in complete
covering the public interest in high-speed access over the air. This technology
provides for high quality voice transfer at high speeds with low noise, good
connection in the topographic roughness. While inexpensiveness of their deployment
and frequency licenses allow for low pricing.
The specifics of the Ukrainian wireless market, CDMA specifically, can be described
as follows:
1) It is restricted and regulated by National Commission on Radio Communication.
2) CDMA operators being local ones (no national CDMA provider with a unified and
concordant policy to evolve the domestic CDMA services market).
3) Absence of enthusiastic drive from the executive top management in implementing
the new technologies.
4) It is evaluated as the most dynamic in the West and Central Europe.
Keeping in one's mind the reluctance of the biggest Ukrainian fixed and
international telephony provider one can stay quite skeptic as to UkrTelecom's
pioneering step towards 3G. In another light there comes Telesystems of Ukraine,
the company with UkrTelecom as a founder.
Much interest was excited by Telesystems of Ukraine's announcement of the company
had set to deploying the third generation mobile communication network (3G) based on
3G \"1xEV-DO\" (grounded on \"CDMA2000 1x\"). The company announced it plans to become
the national communication provider within the next two or three years, while the
first results are expected to be obtained by the end of 2006. At the first stage
the new services will be made available for kyivites and megacities. The company is
planning to invest 180 mln. USD by the end of 2006.
The new CEO of the company, Vitaly Vorozhbyt who has much experience in mobile
communications (he is ex-vice president of UMC) is fond of cutting edge Hi-Tech
novelties and he found support to his vision of CDMA capabilities development in
this direction with the owners of Telesystems of Ukraine's. His ideas fit well with
the plans of Vadym Shulman's (owner of the Telesystems of Ukraine) for expansion and
merging of the unconsolidated and inactive. Some sources
(http://www.mabila.kharkov.ua/news29054.html) note there exist agreements with
Dnipropetrovsk company CST-Invest and Odesa InterTelecom. Buying ITC (CDMA-Ukraine)
and Kharkiv Velton Telecom are also quite unimpossible. Consolidation of Ukrainian
CDMA market is beneficial for Telesystems. It will allow for massive clients
servicing in all megacities that already have CDMA networks deployed. Then these
gradually can be evolved to EV-DO.
About QArea: QArea is the one of the largest offshore software development companies
in Eastern Europe since 2001. Its primary focus is brought upon application
development for handheld devices, (J2ME development), Symbian, WinCE (Windows
Mobile), Palm devices and related. QArea accumulated extended experience and
portfolio in games development for Brew, J2ME-enabled and Symbian handhelds. Also,
QArea cultivates strong .NET and Java development teams performing standalone and
web-application development services.

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Eugene Kovalik