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Opinion: what to expect in Ukraine from restructuring plans of Vimpelcom

5 years ago

298 words

Very interesting was the news publication in the media, including TeleGeography, about possible restructuring of Vimplekomom’s business (spliitng the business into fixed and mobile) and focusing on the highest priority markets, including Ukraine (i.e. Kyivstar).

At the moment, Kyivstar shows a stable leadership in the mobile segment and a very good dynamics in the market of fixed broadband (starting from the 2nd quarter, the company won second place in the rating www.encint.com/en/raitings/fshpd_ii_2012).

According to experts of «E&C» (www.encint.com), if VimpelCom decide to split the fixed and mobile business in Ukraine and doesn’t build effective add-on structure for the coordination of these two units, it is likely there less benefits for the customers (for example, bonuses may disappear). In addition, clients may lose other benefits of convergence: a single self-service website, a single account, single points of sales and customer care. The total cost of network operations and customer service can also increase. But the most important possible deterioration – a significant slowdown in the launch of new convergent tarifs because of much longer internal approvals. Complete absence of interaction between the two separate businesses can deprive strong enough benefits from Kyivstar – packaged convergent offer on telecom market.

At the same time, Kyivstar’s business restructuring in separate units will most probably increase the control of VimpelCom over each unit (divide and conquer), making it easier to sell units and the procedure of changing investors. It is generally easier to auction highly specialized asset (it is easier to eat cake by pieces).

Source: Expert & Consulting (www.encint.com). Reference to the source is obligatory.