Company asks others to invest but vendor choices cause conundrum for Europe
Veon plans to invest significantly in Ukraine’s network infrastructure recovery by committing US$600m through its subsidiary Kyivstar over the next three years. The pledge, announced at the Ukraine Recovery Conference in London this week, will be used to expand mobile and fibre services with the aim of offering 4G LTE services to cover 98% of the country’s population in three years.
Veon added the mobile investment will lead to a “5G-focused reconstruction” for the Ukraine’s biggest telecom operator. However, in a move that will cause consternation in many European capitals, Kyivstar chief executive Oleksandr Komarov told Bloomberg [subscription] the telco will use longstanding vendors like Huawei and ZTE to rebuild its critical infrastructure.
Komarov estimated Huawei and ZTE make up almost 60% of the Ukrainian market including almost 100% of Kyivstar’s radio access network and just under one-third of its more critical and sensitive core network.
He emphasised that reducing this market share would not be straightforward and would need a joint plan with Europe and the US, which will inevitably include some form of funding. However he added, the telco’s supply chain would shift toward Western businesses over time. “As the future part of the European Union, we will definitely obey all the rules and policies, there is no doubt,” he told Bloomberg.
Komarov said the telco committed to “building back better” in partnership with public sector counterparts and other national and international stakeholders. “We would like to invite other companies to invest with the same enthusiasm to contribute today to the future Ukraine,” he said.
Telcos cooperate
Kyivstar, which currently has 24.3m mobile and 1.1m fixed-line users, has partnered with other Ukrainian telcos to deliver roam-like-home offers, currently supporting 2.5m mobile customers. It’s 4000-strong team has also been infrastructure sharing with other operators and providing free wi-fi to shelters and new settlements.
The CEO said the telco had performed nearly 150,000 repairs with twice the intensity compared to the pre-conflict period, reconnecting 800 settlements, upgrading and deploying nearly 10,000 4G base stations and installing 32,000 new batteries to ensure continuity during blackouts. 93% of the network remains operational.
Kyivstar will also use the investment to improve digital services including information dissemination, mobile education, and mobile health. The telco recently invested in in Ukraine’s leading digital healthcare provider, Helsi, which serves a registered base of 25m customers.