Mobile Operators Deem Inadvisable Creation of Universal Telecom Services Fund

telecomMobile operators see no relevance in creation of a Fund for Universal Telecom Services, mobile operators’ representatives have announced at a news conference.

Oleh Prozhyvalskyi, director of corporate management and control at a mobile communications operator MTS Ukraine, says that other countries’ experience shows that creation of such a fund is advisable when the telephone communication is just emerging.

Moreover, in his words, provision of fixed-line communications to dwellers of hard-to-reach regions will be more expensive and take more time than expanding the network coverage to the areas not covered with mobile communication.

“Rural communications are outdated and they need around one billion dollars to modernise it, furthermore in two or three years only a small portion of this sum can be raised. Operators are willing to lead a dialogue with the state and in a year to cover the inhabited localities not covered with telephone communications at their own costs,” Prozhyvalskyi said.

Yurii Kurmaz, director of corporate relations at a mobile communications operator Astelit, notes that establishment of the fund and introduction of extra 3% of communications operators’ deductions from the cost of the rendered services will not affect the end subscriber.

“As a matter of fact subscribers have to subsidise telephonisation of hard-to-reach areas on their own,” he said.

The operators say that the Transport and Communications Ministry of Ukraine (the one who drafted the bill on the fund creation) provided the operators with no economic justification for the fund establishment.

All the operators’ executives share the opinion that the draft law on the Fund for Universal Telecom Services must never be passed, they called the state for dialogue with the market to settle the problem of provision of telephone communication to difficult of approach regions.

A spokesman for the state communications administration has told Ukrainian News that at the moment they are preparing for submission to the Verkhovna Rada of a draft law on creation of the Universal Telecom Services Fund but disclosed no other details of the bill.

As Ukrainian News earlier reported, Transport and Communications Minister Kostiantyn Yefymenko wants the Universal Telecommunication Services Fund to be established in Ukraine.

Heorhii Dzekon, the board chairman of Ukrtelecom, the largest telecommunications company in Ukraine, said that creation of such fund would increase the company’s value in case of its privatization.

The Cabinet of Ministers proposed in January 2009 that the parliament create a fund for universal telecommunications services, into which communications operators are to contribute 3% of the value of the services they provide (excluding value-added tax). However, in March parliament rejected the relevant draft law.

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