Telecommunication Market of Ukraine 2009-2011

1. Telecommunication Market in Ukraine in 2009-2011

2. Current State of Telecom in Ukraine

3. Total Telecom Revenues, USD, 2009-2015(forecast)
In 2011 Telecommunication revenues in Ukraine made up 3,8% of GDP.
+ 30% growth
7 6,1 6,4 15%
6 5,5 5,7
5,2 5%
5 4,9 4,8
4 -5%
F O R E C A S T
3 -15%
2
-25%
1
0 -35%
2009 2010 2011 2012 2013F 2014F 2015F
volume,bn USD year-to-year growth rate,%
3

4. Timeline. Telecommunication Events in Ukraine
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Decline of Long- Austria's EPIC
distance/international long- bought Ukraine's Expect sharp downturn in DLD/ILD
distance telephony Ukrtelecom revenues in 2012-2015
subscribers
Launch of Utel
brand by
Ukrtelecom
Fixed Telephony
Mobile
penetration Growing of 3G Launch of Growing of Expect more companies get license for 3G
reached 105% networks mobWimax services “smart” devices (today under military) and LTE launch
802.16e
MTS got license
for CDMA-450 Active growth of
mobile internet
Mobile Telephony
traffic&revenue Sharp decline of Austria's EPIC Expect broadband penetration by 2015 to
Rise of xDSL dial-up bought Ukraine's reach 50% of households
subscribers In may 2010 Vympelcom merged subscribers share Ukrtelecom
with Kyivstar to form VimpelCom
Ltd., the largest telecom operator in Broadband
SigmaBleyzer fund the CIS Satellite
SigmaBleyzer fund IPTV and OTT By 2015 Ukraine is expected to shift to
started to purchase operators
created Volia growing 100% digital broadcasting
local cable expand
Limited, largest
providers business
Television
cable provider
COGENT, RETN
Extensive entered the data Orbiting the first Ukraine geostationery
growing of fiber transfer market satellite “Lybid” is expected by2013-2014
networks
Other segments (data transfer, satellite, etc)
4

5. Telecommunication revenues
7
6 Telecommunications
5 revenues in absolute
4
3
numbers, split by
2 segments,bn USD
1
0
2009 2010 2011 2012 2013F 2014F 2015F
Mobile Telephony Internet TV Other
100%
80%
Telecommunication 60%
Segments in shares, % 40%
20%
0%
2009 2010 2011 2012 2013F 2014F 2015F
Mobile Telephony Internet TV Other
5

6. Average Monthly Bill per User
2009 2011
TV Mobile
14% 17% -3,2% TV Mobile
20% 20%
Fixed Voice
24% Fixed
Voice
Internet 23%
45% Internet
37%
6 207 UAH = 26 USD 200 UAH = 25 USD

7. Telecommunication Revenue Shares by Companies, 2011
* Astelit (TM life:)) is *Kyivstar is operator in mobile
operator in mobile communications, mobile internet,
communications, mobile fixed internet, fixed voice, data
internet, and data transfer, transfer, etc. In 2010 two Ukrainian
etc. The company has been Other telecommunication operators —
in Ukrainian market since 24
January 2005. It is 44.96% 18% Kyivstar Kyivstar PJSC and Beeline-Ukraine
(Ukrainian Radio Systems PJSC and
owned by SCM Group and
54.8% owned by Turkish 33% Golden Telecom LLC) — went into
united Kyivstar, Ukrainian business
GSM operator Turkcell. Astelit unit VimpelCom Ltd.
8%
* Ukrtelecom JSC was Ukrtelecom
Ukraine’s monopolist
17% *MTS(previously UMC brand) is
government-owned
telephone company, also MTS operator in mobile communications,
active in Internet service mobile internet, fixed voice, data
providing and mobile 24% transfer, etc. In 2007 – an operator of
markets. In 2012 Austrian mobile communication UMC, 100%
investment firm EPIC bought subcompany JSC "MTS" (NYSE:
a 92.79 percent stake in MBT), officially announces of turning
Ukraine's main fixed-line into the new brand – MTS.
operator Ukrtelecom.
7

8. Current State of Telecom Segments

9. Mobile Voice Communications: Saturation
Mobile subscribers and penetration, mn, 2005-2011
Mobile voice market has
reached saturation at this
stage. 60 55,6 55,9 55,3 54,1 53,7
140%
119,8% 121,1% 120,3% 118,1%
49,2 120%
50
In case Ukrainian government 117,6%
finds a way to unlock third- 40
105,1% 100%
generation UMTS
frequencies (currently under 30,4 80%
military) and issue more 30
licenses to the main market 64,0% 60%
players, revenue growth rates 20
40%
in the mobile telephony
segment could advance 10 20%
slightly.
0 0%
2005 2006 2007 2008 2009 2010 2011
9

10. Broadband Internet: Stable Growth of Private Subscribers
24,8
Fixed (wired)- broadband subscriptions per 100
inhabitants, 2011
15,4
13,0
9,3 8,5
6,4
2,1
0,2
S*
a
in e
s
ld
ic
s
pe
ica
ric
ate
cif
or
CI
ro
ra
Af
W
Pa
er
St
Eu
Uk
Am
ab
&
ia
Ar
e
As
Th
Broadband penetration in households raises with 7 per cent points per year
31% 33%
30%
28%
26%
25%
22%
20%
18%
16%
10 1Q 2010 3Q 2010 1Q 2011 3Q 2011 1Q2012

11. Broadband Internet: Consolidation Process are Underway
FISED BROADBAND SUBSCRIBERS «ТОР 10» - «Other» SCORE 52:48
Over 500
service
providers, Other
48% ТОР 10
over 1100 52%
service
operators
11

12. Fixed/Mobile Internet Trends
In 2011 Ukraine has entered list of top 10 countries with highest broadband speed (source –Pando
Networks)
16th place of the world most developed FTTH networks (source FTTH Council Europe)
Consolidation process are being at the place on fixed broadband market
Tough Competition between operators
Unequal regional penetration of broadband services
FTTx is main technology (70% of new subscribers prefer FTTx)
Mobile broadband market (CDMA Rev A,B) is is growing slowly due to blocking third-generation
frequencies (UMTS) and not issuing licenses to the main market players
MobWiMAX services are provided by two operators, still quite modest growth
12

13. Fixed-line Telephony
Decline of local and DLD/ILD
revenues
Expect the decline of the number of
telephone lines
12,1 12,5 12,4 12,3 12,1
11,5
2006 2007 2008 2009 2010 2011
Telephone lines, mln
13

14. TV: Still Majority of Free-to-air TV Consumers
Subscribers Breakdown of Ukraine’s
TV market in terms of technology
IPTV 0,5%
(including paid and free access), 2011
Satellite TV
19,5%
Cable TV
35%
Free-to-air TV
45%
14

15. TV: Digitalization Trend
Digitalization of TV. Total digitalization is expected to become in 2015
The role of revenue driver on the pay TV market of Ukraine has gradually been
shifting to paid satellite access operators
In April, 2012 the National Council for TV and Radio Transmission of Ukraine
has resolved the issue of blocking the IPTV licenses. Therefore 4 providers
have received IPTV licenses
15

16. Ukraine Telecom Forecasts 2013-2015
Positive broadband growth tendency due to cities 50K+.
Wave of mergers and acquisitions of small regional broadband providers
Broadband ARPU expected to stop declining and rise gradually Internet providers will
focus on solving two parallel tasks: extensive growth of the subscriber base and rolling out
quality value-added service options.
Growth rates of the number of subscribers connected via GPRS/EDGE and via 3G mobile
services
Growth of set top box market, complementary to TV revenues growth and digitalization
goals
Virtualization of IT resources, development of cloud technologies
Dynamic growth of Ukrainian internet entrepreneurship, rising of startup projects
(e-commerce revenue rise 80% in year-on-year terms, etc)
16

17. Main specialization of iKS-Consulting —
management and analytical consulting services of CEE maket
48%
33% Consulting
Market research 15%
Ready-made products 4% Business coaching
Marketing studies Strategies iKS-Statistics iKS-Conference
Consumer surveys iKS-Annual Reports High-Tech Marketing
Business Planning iKS-Trainings
Forecasts Modeling iKS-Ratings
iKS-Management Tours
Information support Recommendations
Analytical support
17

18. Market Research — marketing decisions support system
Marketing
Promotion strategies audit
Competitive analysis
Prices monitoring and analysis
Market potential analysis, searching
for new market niches
Markets segmentation and profiling
Benchmarking
Sales
Sales efficiency analysis
Forecasting
Strategic planning
Investment
18

19. More than 250 client companies
(iKS-Consulting in Russia,Ukraine, Kazakhstan)
19

20. iKS-Consulting – Kiev /Ukraine
Contact person: Nataliya Kunderevych
Phone: +380 (44) 493-65-60
E-mail: nk@iks-consulting.ru
Skype nataliya.kunderevych
Address: www.iks-consulting.ru
UKRAINE, Kiev, 10 Vandy Vasylevskoi Str., off. 79
20