Rental Fee for the Use of Radio Frequency Resource

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The level of rental rates is established in Ukraine based only on the current profitability of local networks according to the types of radio communications in specific ranges:

  1. In Ukraine, the highest rental rate is set for the radio frequency resource to provide mobile communications.
  2. The rental rates for radio frequency resource for multimedia radio access systems (2.5-2.7 GHz) and digital TV ("digital dividend" 694-862 MHz) are unreasonably low compared to mobile telecommunications, despite the promising outlook of these ranges for 4G implementation.

The current situation on rental payments for the use of radio frequency resource in Ukraine:

  • in fact, the rental payment for the use of radio frequency recourse is an additional tax on the market;
  • the income gained from the rent cannot be used for the sphere of radio frequency resource usage (primarily, for the radio frequency monitoring);
  • an exorbitant rental rate is a deterrent to the introduction of new mobile technologies in Ukraine;
  • an exorbitant rental rate impairs the investment climate and image of Ukraine (there is no rental payment for the use of radio frequency resource as an additional tax either in Europe or in the CIS countries);
  • the rental rate should be balanced, especially for frequency ranges standardized under 4G.

Retaining the current approaches for the formation of rental rates for radio frequency resource usage for mobile technologies will lead to the following:

  1. blocking of the development of the modern mobile technologies in Ukraine that will require a significant radio frequency resource;
  2. further removal of significant financial resources from mobile operators;
  3. deterioration of the business climate that will complicate the fulfillment of social functions by local mobile operators in order to provide the population of Ukraine with the necessary telecommunication services, particularly, the mobile Internet access, primarily in depressed regions and territories with low population density;
  4. the loss of opportunities by local mobile operators for conducting effective economic activities and, consequently, the transfer of the specified additional costs to the end users of mobile services as well as the necessity of constant increase of tariffs for subscribers.

It is necessary for mobile communication development that Ukrainian government has cancelled an annual indexation of the radio frequencies rental fees.

Victor Ivanov

Chamber Mobile Telecom Committee Expert

Senior expert

License & Radio Frequencies department

Vodafone Ukraine