Global Insight Perspective | |
Significance | UMC's new service will be launched in the second quarter of 2007, aimed at the small but high-spending corporate sector. |
Implications | In neighbouring Russia, MTS, which, like UMC, is also owned by Sistema, recently launched FMC in the capital, Moscow. |
Outlook | UMC has announced a number of other projects which will see investments reach US$700 million this year. The operator is to be rebranded as MTS in the second quarter as it competes with Kyivstar in the increasingly highly penetrated Ukrainian mobile market. |
Ukraine's second-largest mobile operator by subscriber numbers, Ukrainian Mobile Communications (UMC), has announced plans to launch a fixed-mobile convergence (FMC) service in the first half of 2007, reports Ukrainian News. The package will be targeted at corporate clients, and will enable both fixed-line and mobile services on a single telephone. MTS president Leonid Melamed has indicated that the company will start providing services in the capital Kiev in the second quarter of 2007, with a commercial launch to follow in regional centres and all cities with a population of over 1 million. More than 100,000 telephone numbers have been prepared for the provision of the service.
Outlook and Implications
Sistema Pushing FMC in the Commonwealth of Independent States: While UMC is not, initially, aiming to achieve huge subscriber uptake to FMC, it will hope to appeal to higher spending corporate customers. The operator is likely to promote the service's single, unified billing and universal contact numbers. For UMC the deal could help to lower operating expenses, increase service revenue, and streamline billing and distribution operations. FMC is still a technology at the nascent stage of development, but Russian holding group Sistema, which owns UMC, recently launched an FMC network in Moscow, via its Russian mobile subsidiary Mobile TeleSystems (MTS) (see Russia: 21 December 2006: MTS Launches FMC in Moscow with Golden Line). It therefore appears that, despite the relatively untried nature of FMC, Sistema views the service as one with potential in the heavily penetrated mobile markets of Russia and Ukraine. UMC has already indicated that in the second quarter of 2007 it will be rebranded as MTS (see Ukraine: 5 February 2007: MTS Plans to Rebrand Its Ukrainian Unit in Q2).
US$700 Million Investment: FMC is just one part of a string of projects announced by UMC for 2007. The operator has indicated that it will invest around US$700 million in the development of its network this year. As well as FMC, it plans to launch a wireless data transfer service to optimise and increase its existing network capacity. The service will run on a CDMA standard which will enable data transfer and internet access services at speeds of up to 3.2 Mbps. Like FMC, such a service is likely to be targeted at the smaller but higher spending corporate market. Other avenues of investment for UMC in 2007 will be the installation of more base stations and the expansion of its network of sales outlets to 40,000. At the end of 2006 UMC had 20.0 million subscribers, trailing behind leading operator Kyivstar, which had 21.5 million. There were estimated to be around 48-49 million mobile users nationwide, equating to a penetration level of around 100%, although a high incidence of multiple SIM card ownership suggests that the actual mobile penetration level is lower, and that there is therefore some room for further organic growth.