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Opinion: Acquisition of ITC by Interletelecom – possible changes on the Ukrainian mobile market

5 years ago

552 words

1.What is the method used for acquisition of ITC by Intertelekom?

According to E&C, most likely, it will be transfer/cession of ITC’s (CDMA Ukraine) subscribers but not the sales of company.

2. How acquisition of ITC will affect the market?

According to E&C, acquisition will not origin to a significant changes of the positions of the main players, but, of course, Intertelecom will raise more resources to compete with the “Big Three” (Kyivstar, MTS, Life). The success of Intertelecom on the market will depend on the effectiveness of their marketing strategy and management decisions.

Mergers rarely runs smoothly for users – for example, the users of acquired player can temporarily have unavailable telephone support, some payment systems, may recceive offer to change their tariffs … Much will depend on how well will be planned the migration,  on capabilities of the billing system, on availability of human resource. According of radio-frequency recource plan the life of CDMA is no longer limited to 01.01.2016 – corresponding changes were made in the law (http://zakon2.rada.gov.ua/laws/show/1093/2008 and http://zakon2.rada.gov.ua/laws/show/815-2006-%D0%BF by decree № 838 on 5 Sept 2012 of the Cabinet of Minstry of Ukraine. Therefore, taking into considerations the refarming of frequencies, potentially subscribers may receive a higher quality and speed of mobile Internet than the Ukrainian GSM-operators.

3. What will be the strategies of remaining players (Intertelekom and PeopleNet)?

According to E&C, Intertelecom is acting proactively enogh, while PeopleNet is more focused on returniung the investments. Most posible that the market position of PeopeNet will not become stronger, while Intertelecom’s will be strengthened, as today Intertelecom develops accompanying businesses – WiFi / Landline / CDMA, involved in infrastructure projects. In the future the scenario of the acquisition of PeopleNet by Intertelecom is likely possible only in case of a low sales price.

4. How the mobile market in Ukraine will change and what opportunities will have CDMA-operators?

According to E&C, CDMA will remain a niche standard for voice service. But CDMA may have improvements for Internet services. Ukraine was highly got involved in 3G standard for GSM, forgetting about the user experience – one of the fundamental trends now is the growth of the number of subscribers of smartphones and tablets that require high-speed Internet. For such users, in general, all the same, it is GSM or CDMA – for them CDMA is actually 3G. And, in the CDMA theoretically possible:

1. Higher speed mobile Internet

2. The lower cost of services (due to the smaller number of base station equipment)

3. Higher quality.

The recent prolongation of validity of the frequency license and refarming should play into the hands of CDMA. However, let’s do not forget that all CDMA-operators need advanced client equipment which will satisfy the customers.

Source: Expert & Consulting (www.encint.com). Reference to the source and WEB-site www.encint.com as clickable hyperlink is obligatory.