Telenor engaged in GSM mobile network in the Ukraine

Press release
Fornebu
4 minute read
Norwegian Telenor has signed a contract on a 35 per cent ownership share in ZAO Kyivstar GSM, operator of a GSM mobile network in Ukraine. The contract was signed in Oslo, 26th March, and involves investments of around 40 million USD on Telenors behalf.
ZAO Kyivstar GSM opened its network in December last year. Kyivstar has a GSM license for Ukraine and expects to invest about 150 million USD in network development over the first two years. Telenor will invest around USD 40 million at this stage. At the time of opening, the mobile network covered Kiev, which has a population of three million, and the company has plans to extend the network to cover an additional three cities per year with one million or more inhabitants. Ericsson has been selected as the supplier of base stations and other switching equipment.

The Ukraine stretches from the Black Sea in the south to Belarus in the north. It is as large as France and has a population of about 52 million and covers an area of more than 600.000 square kilometres. There are currently about 70.000 mobile phone subscribers - 55.000 NMT users and 15.000 GSM users. With a network of distributors in place already, Kyivstar expects to capture a considerable market share of the growing Ukrainian mobile phone market.

"We are happy to have Telenor as partner in Kyivstar," says Yuri G. Tumanov, Chairman of the board in Kyivstar GSM. "The knowledge and experience Telenor has from different mobile operations abroad brings to Kyivstar what we need to succeed as mobile operator in Ukraine," says Tumanov.

ZAO Kyivstar GSM is jointly owned by Sputnik funds (14 per cent), Ukrainian partners (51 per cent) and Telenor, which has bought 35 per cent of the shares.

"The development of the mobile network in Ukraine is part of our broader strategy in Russia and the former Soviet states," says Ole Johan Haga, regional director in Telenor International with responsibility for Russia, Ukraine and the Baltic states. "We are already positioned in St. Petersburg, Murmansk, Kaliningrad and Stavropol and are considering other mobile telephony projects in the region," says Haga.

Telenor is already a part owner of one of the most rapidly growing mobile phone companies in Russia, North-West GSM, which operates a GSM network in St. Petersburg. Telenor and other Nordic partners own 49 per cent of the shares. North-West GSM now has over 60.000 GSM subscribers. Telenor also owns 49 per cent of the shares in Stavtelesot, a GSM operator in Stavropol, and also in Extel, the GSM operator in Kaliningrad which opened its network in the fall of 1997.