Mobile phone operators have already invested billions into 3G networks

Investing in the next generation networks launch 2 billion USD, MTS can not wait for the necessary licenses

Photo: Konstantin Melnitskiy

Mobile phone operators thoroughly prepared for 3G, which has yet to appear on the market. Now, billions in investments may turn out to be irrelevant. Indeed, as Capital wrote earlier the government of Ukraine is so far insisting on not allowing the major players to participate in the 3G tender, specifically Kyivstar and MTS Ukraine due to the involvement of Russian capital.

MTS: UAH 2 bn for preparations

In 2013-2014, MTS Ukraine implemented one of the largest infrastructural projects. “We replaced around 4,500 base stations using the equipment of NSN (earlier Alcatel Lucent) on a large territory – Kyiv, Dnipropetrovsk, Zaporizhzhya, Kirovohrad, Kharkiv, Sumy, Poltava and Chernihiv oblasts,” Technical Director of MTS Ukraine Andriy Tereshchuk told Capital. The operator has already generated the entire volume of investments needed for the launch of 3G in those regions. Tereshchuk says this is approximately UAH 2 bn for 35% of the territory of Ukraine.

According to data of the company’s representative, MTS replaced everything from the core of the network to radio parts in these regions. It also replaced the transport network and built an IP network with a maximum throughput capacity required for 3G communication. At the moment, the operator is completing the replacement of the core of general package radio service that will be 3G and 4G ready.

Kyivstar, life:) gradually making progress

Other operators have been preparing for the launch of 3G technology at a more measured pace since 2007-2008. Many preparatory works have already been executed by Kyivstar, says Director of Technical Operation of the Network Volodymyr Kabanenko. “Equipment that supports the 3G standard (3G ready) has already been put in place in the entire commutating network,” he confirmed. Kabanenko says it is much easier to distribute the traffic of separate regions between different switchboards in the new network depending on their load. If any switchboard is overloaded or breaks down, the traffic in a particular region will be processed through other commutating hubs. The network of package commutation is also being modernized in order to be prepared for the rapidly growing volume of Internet traffic inherent for 3G and 4G communications.

“The process of modernization of the radio network (i.e. base stations) has been ongoing for several years. The operating equipment is gradually being upgraded with new equipment that simultaneously supports different standards of communication from 2.5 G to 3G/LTE,” Kabanenko added.

Manager of the PR Department of life:) Oksana Rudiuk noted: the readiness of the network for the launch of 3G is 80% in a number of oblasts in Ukraine. “We are also ready to invest however much is needed for the rapid introduction of the 3G network,” she stressed.

Not so fast

The latest news about the possible non-admission of certain operators to participate in the tender and the complicated political and economic situation in the country has forced them to be cautious about building for growth.

For example, at the end of 2012 General Director of MTS Ukraine Ivan Zolochevskiy announced the launch of a global project on replacement of equipment within the framework of preparations for 3G. It should have been implemented all regions and investments were projected at US $800 mn-1 bn. Having modernized 35% of the coverage in 2013, today the company is much more cautious. According to information that Capital possesses, after gaining a foothold in several oblasts this year MTS should have concentrated on the Donetsk and Luhansk oblasts and in the south of Ukraine. But even in those regions that are not affected by the war, the operator is not in a hurry to invest money comparable to the first phase of the project.

Launch in half a year

Seeing as the companies did their homework and are well prepared they can launch 3G technology fairly quickly. “From the moment we are given access to frequencies 3G services can be launched in major cities of Ukraine within 6-9 months,” said Kobanenko. This term is not only a matter of technical work. For example, after being issued a license for operation in the sphere, operators will have to obtain new authorization for the use of every radio base station in the network. The technical director of MTS said in order to launch 3G in the reestablished regions a maximum of 6 months is required and expenses will be minimal.

As a reminder, operators will have to inject considerable amounts of money for access to frequencies. A license for this will cost them UAH 2.334 bn and modernization of military communication will cost them another UAH 1.6 bn. But seeing as the government is constantly protracting the start of tenders, the first permits will be issued by the end of December 2014 in the best case scenario.