Over the next five years, the Ukraine telecom market will grow at one of the fastest rates among the eight CEE markets we cover. Its growth potential has only begun to be seen, being driven by fixed and mobile data and by pay-TV, each demonstrating double-digit CAGRs between 2013 and 2018. The Ukrainian telecom market is very fragmented, with the mobile operators leading the market during the forecast period and their market shares remaining almost unchanged. On both the fixed and mobile sides, market consolidation will continue.
Introduction and Landscape
In 2013 the Ukraine telecom market will generate UAH 41.5bn ($5.0bn) in service revenue, a 3.0% increase over 2012. Over the forecast period, we expect the market to grow at a CAGR of 4.5%, reaching UAH 51.6bn ($6.1bn) and generating a cumulative revenue opportunity of UAH 282.8bn ($33.3bn). Data services (fixed and mobile) will be the driving force behind Ukraine's telecom market growth. The current limitations of broadband availability nationwide (fixed and mobile) at a time of growing demand for data will result in data revenue's share of total telecom revenue growing 12 percentage points over the forecast period. We expect that the launch of LTE services will spur data consumption, particularly in the browsing segment as most of the large GSM mobile operators in subscription terms offer only 2.5G technology. In addition, the pay-TV segment will get a boost from the introduction of the prepaid business model by Xtra TV and UA.TV (Viasat) and the launch of a new DTH operator, Lybid TV. Over the forecast period, we expect the pay-TV market to grow from UAH 2.0bn ($239m) in 2013 to UAH 3.3bn ($394m) in 2018.
Market and Competitor Overview
Ukraine in a regional context
Economic, demographic and political context
Major market players
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