A new initiative whereby Ukrainian subscribers may be able to change from one telephone operator to another while still maintaining their same number and national roaming service thanks to the introduction of Ukraine’s parliament of draft law No. 3420 “On amending the Law of Ukraine “On Telecommunications” (to increase the list of services)” of 28.11.2008.
If the bill is adopted, Ukrainian subscribers will have the opportunity to move from one operator to another while maintaining their number. To that end, the National Commission for Regulation of Communications (NCRC) would allocate operators the right, to some extent, to specifically introduce number portability services (Mobile Number Portability, MNP). Under the bill, these provisions would come into force on May 1, 2009 for mobile numbers and on January 1, 2012 for stationary numbers.
With regard to national roaming, this would take place by operators entering into contracts with one another and then provide roaming services in Ukraine to each other’s clients in the case that subscribers of one operator went beyond its network but still located within the network of its competitor. In that case, the agreement would enable to subscriber to use the network services of its host’s competitor while in that particular zone.
Our view: At this point, we view this news as NEUTRAL, since market participants’ reaction to the bill is, so far, ambiguous, as are the prospects of this legislation actually being adopted. Some are generally supportive, noting that the bill is viable and contains the necessary changes to the conceptual apparatus, establishing the basic principles of the introduction of MNP and national roaming and clearly establishing the public agency that will regulate these processes and develop the provision of these services.
For this initiative to go ahead, it would be necessary for the NCRC to develop a sub-legal framework to outline the details of implementation. It is likely that the speed of the bill’s introduction would entirely depend on the actions of the NCRC and market participants themselves, as to whether universal consent can be rapidly achieved.
Yet other mobile operators feel that the introduction is untimely and that the services would bring additional costs which would have to be compensated – directly or indirectly – through fees charges to subscribers. This perspective decreases the likelihood of the introduction of national roaming or MNP, based on the increased cost of services to subscribers, since they are unlikely to appreciate such innovations. Given the current market conditions, they further argue that operators, regulators, providers must avoid any negative market trends related to price increases.
At present, there are not many examples in the world where the MNP service has been implemented, and its introduction in Ukraine requires that operators will need to purchase additional equipment and software, as well as upgrade existing ones. At the same time, Beeline has been providing a national roaming service for Utel subscribers for a year already, and the company has not seen much difficulty in implementing the project with other operators. Beeline Implementing roaming at the domestic level, in this respect, takes about two months, with no additional cost to operators expected.
In those countries where the MNP service does exist, experts noted that it is not particularly popular service. The agency Sunrise Consultants, the number of subscribers moving from one operator to another while using MNP in Australia, Sweden and Britain have not even reached a subscriber base of 2% per year. The rate is highest in Hong Kong and Finland, with rates of 8-10% respectively.
For Ukrtelecom, we think this news can be positive if the law will be accepted. The Ukrainian mobile market is growing, meaning that user numbers from 2G operators can move to Ukrtelecom, which provides 3G services to its customers. We see a negative reaction from 2G operators, which would like to protect their own user pools and not share existing clients with their competitors.