Ukraine’s Largest Operator Kyivstar Plans to Invest 600 Million US dollars in Network Construction

fiber optic network infrastructure
(Last Updated On: July 30, 2023)

ICC News: According to foreign media outlet Light Reading, despite the ongoing war in Ukraine, its largest operator Kyivstar is making plans for the future and aims to participate in the reconstruction efforts after the war. During a recent news roundtable, Oleksandr Komarov, CEO of the telecommunications company owned by VEON, stated that the company plans to invest $600 million in the Ukrainian economy.

While Kyivstar acknowledges the risks of investing in the current environment, Komarov stated that the company is opportunistic. He said, “Our actions are very opportunistic, and we are very confident that Ukraine will win, and we will have a chance to participate in one of the largest development projects in 21st-century Europe. So, this is our bet.”

Although he acknowledged that maintaining the network (which often faces threats from artillery fire in some areas) remains Kyivstar’s top priority, he also mentioned that the company strives to achieve 98% 4G coverage. Komarov admitted that the current figure is around 93%, and progress might be slow due to difficulties in reaching areas beyond the coverage range. Many of these areas are located in rural regions or along highways. Komarov stated that it is more like a social project for Kyivstar since it will take over a decade to achieve a return on investment. In contrast, the average return rate for the company and other VEON businesses is five years.

Due to the ongoing war, Kyivstar has no plans to launch 5G. Ukrainian regulatory authorities had planned a 5G spectrum auction in 2022, but the plan was postponed due to the Russian invasion.

Meanwhile, 3G remains a vital component of the country’s network. Komarov explained that although Kyivstar hopes to shut down the network eventually, it is challenging because a significant portion of the 3G infrastructure caters to voice traffic rather than data. Currently, the telecom company’s customers have an average monthly call duration of 500 to 600 minutes. Therefore, he anticipates that 3G will be phased out by 2025.

Kyivstar’s $600 million investment aims to upgrade Ukraine’s fiber optic network to support 1 Gbit/s services. However, Komarov also acknowledged that the war somewhat determines the “geographical priority” of this project. Despite this, Kyivstar already possesses the country’s largest 1 Gbit/s Fiber-to-the-Home (FTTP) network, connecting 1 million households.

He also stated that if opportunities arise, Kyivstar is open to non-organic growth in the fiber optic network. He estimates that Ukraine has around 3,000 fixed network operators, including many small local operators. He expressed that the market will experience consolidation as a result, and Kyivstar is prepared to participate in it.

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