October 5, 2015 - Ukraine
10 things to know about telecom in Ukraine
by Oleksiy Didkovskiy and Oksana Legka
Ukrainian telecom market has developed gradually from a
state-controlled monopoly to a competitive sector. Over the recent years,
Ukrainian telecom policy makers and regulator have been striving to establish
pro-competitive regulations aimed at liberalizing the telecom market at large.
For instance, in 2011, the Ukrainian Parliament abolished licensing of three
out of eleven types of telecom services that required a telecom license. The
current policy focus is on developing a transparent regulatory framework to
encourage investment in the telecom sector.
1. Telecom market players are divided into "operators" and
Ukrainian telecom law classifies entities providing telecom services into
"operators" and "providers". An operator renders its
services under a license and has the right to maintain and operate telecom
networks and to lease communication channels. Meanwhile, a provider operates
under a contract with an operator, as well as a copy of operator's license
issued by the telecom regulator. Unlike operators, providers have no right to
maintain and operate telecom networks or to lease communication channels.
2. Foreign companies are barred from operating in the Ukrainian telecom
services market directly, but may do so through a local subsidiary (whether
wholly or partly owned)
Only a locally incorporated company may provide telecom services in Ukraine.
Thus, a foreign-based company may not provide telecom services directly to
customers in Ukraine on a cross-border basis and may not apply for any telecom
or frequency license unless it enters the Ukrainian market through a local
subsidiary. Ukrainian law does not restrict foreign ownership in telecom
3. Undertakings must have a general authorization to provide telecom services
Under Ukrainian law, a company planning activities in the telecom sphere
(whether as an operator or provider) must submit a start-up notice to the
telecom regulator at least one month prior to commencing operations so that the
regulator includes it in the Registry of Telecom Operators and Providers. Only
after the regulator adds the applicant to the Registry, such a company may
offer telecom services subject to compliance with the rules applicable to the
specific type of telecom service.
4. Licenses are required to offer certain types of telecom services and to run
Ukrainian telecom law sets forth an exhaustive list of telecom activities that
are subject to licensing. Generally, these include the services of (i) fixed
telephone communications (local, long distance, or international) with the
right to maintain and operate telecom networks and to lease telecom channels,
(ii) fixed wireless telephone communications (local, long distance, or
international) with the right to maintain and operate telecom networks and to
lease telecom channels, (iii) mobile telephone communications with the right to
maintain and operate telecom networks and to lease telecom channels, and (iv)
technical maintenance and operation of telecom and broadcasting networks.
5. Use of radio frequencies is subject to licensing and authorizations
The use of radio frequencies for providing telecom services in Ukraine is
subject to licensing. A license to engage in a telecom activity that requires
radio spectrum is issued simultaneously with a relevant license to use radio
frequencies. The telecom regulator grants licenses to use radio spectrum for
providing telecom services on a "first come – first served" basis.
However, if the declared demand for spectrum exceeds its actual availability,
the regulator must allocate the spectrum only through competitive bidding or
Apart from the frequency license, a radio frequency user must obtain a
conclusion on electromagnetic compatibility and a permit to use radio
electronic and transmitting equipment for each piece of such equipment.
6. Licenses are not assignable
The holder of a telecom license or a license to use radio frequencies may not
transfer such a license to any third party on pain of revocation of the
license. Nevertheless, Ukrainian law allows telecom operators using the
frequencies to approach the telecom regulator with a joint application seeking
to re-allocate the spectrum used by such operators.
7. Telecom operators provide interconnection to their networks
Ukrainian telecom law requires all telecom operators to provide interconnection
to their telecom networks in all technically feasible interconnection spots
where they have the capacity required to provide up-to-the-standard telecom
services. Ukrainian law regulates interconnection of telecom networks and sets
forth the conditions and procedure for entry into interconnection agreements
and their termination. The catalogue of offers of telecom operators as to
interconnecting with their telecom networks is publicly available.
8. Numbering resource is allocated based on a specific permit
The telecom regulator allocates the numbering resource to telecom operators for
the period of validity of their licenses and issues respective numbering
permits. An operator is eligible to apply for the numbering resource once it
obtains a telecom license. An operator should start using the allocated
numbering resource by the deadline specified in the numbering permit. An
operator may not transfer its numbering resource to third parties, except for
assigning numbers to customers or allocating a portion of the resource to
providers subject to regulator's permit.
9. Retail tariffs are not subject to ex-ante regulation
Ukrainian law allows telecom operators to set tariffs for telecom services
provided to subscribers, although such tariffs are generally subject to control
for anticompetitive practices. Furthermore, the telecom regulator approves
maximum tariffs for universal telecommunications services. Such services include
local telephony, universal access, calls to emergency services, reference
information services, and communication via public payphones.
10. Operators designated as having significant market power may be subject to
more stringent regulatory requirements
Ukrainian telecom law allows the regulator to establish mandatory tariffs for
interconnection and traffic transfer for operators having significant market
power (as defined by the regulator) and dominant operators. The regulator also
sets maximum tariffs for lease of electrical communications channels by telecom
operators with significant market power on the respective markets. Operators
with significant market power may not reject an offer from another operator to
interconnect, except when a telecom network to be interconnected fails to meet
certain requirements (i.e., certification of telecom equipment, etc.).