Telecom Market is Waiting for Support

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From January 1, 2017, the state regulation of the rate for international traffic for Ukrainian operators has come into force. The National Commission, which provides the state regulation in the field of communications and information, by its Decision set the maximum termination rate for incoming international traffic at 0.1 euros / min.

Should be noticed that the Decision is contradicting the provision of the Law On telecommunications and the Law On prices and pricing.

The regulator declared two goals that it wants to achieve with this Decision:

  • to reduce of roaming tariffs;
  • to increase of international calls to Ukraine.

The first aim was copied the EU regulation and looked strange given that the roaming tariffs of Ukrainian operators are the lowest not only in EU, but also in Eurasia in general.

The next aim seemed unreal from the start. Over-the-top (OTT) apps such as WhatsApp, Facebook Messenger, and BlackBerry Messenger are driving force over the last years. It has affected ongoing decline voice-traffic throughout the entire world.

At the same time, throughout the EU the price that mobile network operators can charge one another for terminating calls made to their own customers is regulated on the basis of cost. In order to compensate these losses and losses associated with RLAH a number of telecom regulators (e.g.  French regulator ARCEP) made decisions that specifically set the exemption from the regulated price for calls originated from outside the EEA. This means, for example, that Ukraine MNOs pay a much greater wholesale price for calls to French mobile customers than UK MNOs do. Eventually we have the situation when Ukraine MNO has to pay to EU MNO twice more IMTR. Such a distortion led to the fact that the MNOs revenue in 2017 declined roughly on 47 mln euro and due to this the State Budget lost 9.5 mln euro.

Telecom market is still waiting for NRA to start supporting national operators and revise this controversial political Decision as stipulated by the national law.

Maksym Savchenko

Chamber Mobile Telecom Committee Expert

Regulatory & Digital Policy Manager

Kyivstar