Policy

In today's world telecommunica­tions is a resource which plays an extremely important role in the global economical system and social sphere. So it is no wonder that the telecommunications sector is under a special attention in Ukraine as one of the most promising industries.

The main acts governing telecom­munications in Ukraine are as fol­lows:

•  The Laws of Ukraine:

-     On Telecommunications;

-     On Radio Frequency Resource of Ukraine;

-     On Television and Broadcasting;

-     On the National Television and Broadcasting Council of Ukraine;

•  By-laws:

-     Instruction of the CMU "On Approval of Conception of Te­lecommunications Develop­ment in Ukraine";

-     Order of the President "On the National Commission for the State Regulation of Communi­cations and Informatization";

-     Resolution of the CMU "On Approval of the Rules of Pro­vision and Obtainment of Tele­communication Services".

Regulator

CMU

         Regulates the industry and realizes the state policy in the telecommunications sphere;

         Manages state-owned objects in the telecommunications sphere;

         Approves the national table of frequency bands allocation and plan of usage of the radio frequency resource;

        Approves the procedure of granting to the armed forces of communication facilities, radio frequency resources  and other infrastructural objects;

         Approves the tariffs for issuance, renewal, extension, receipt of a duplicate of licenses for use of radio  frequency resource of Ukraine.

National Commission for the State Regulation of Communications and Informatization

          Sets and regulates tariffs for different telecommunication services;

          Issues licenses in the telecommunications sphere and ap­proves the list of license criteria;

          Allocates the numbering resources;

        Maintains the register of operators and providers of telecom­munications and licensing issues;

          Controls the quality of telecommunication services;

        Controls compliance with the telecommunication law pro­visions and licenses conditions by the  telecommunication market participants;

         Performs pre-trial disputes settlement between the telecom­munications market participants.

State Television and Radio Broadcasting Council of Ukraine

          Issues TV and broadcasting licenses;

          Participates in drafting the national table of frequency bands allocation and plan of usage of the radio  frequency resource;

          Maintains the register of TV and broadcasting companies;

         Monitors the activity of TV and broadcasting companies in compliance with the Ukrainian media law and  license terms and conditions;

          Imposes sanctions on violators.

Ukrainian State Centre of Radio Frequencies

          Assigns radio frequencies, issue permits for usage of radio-electronic equipment;

          Maintains the register of radio frequency assignments;

          Radio frequency monitoring;

          Takes measures for determination and elimination of sources of harmful interference;

          Prepares the respective conclusions concerning the issuance of licenses on radio frequency resource usage

Regulation and Licensing

Under Ukrainian law, the following activities in the telecommunica­tions sphere are licensed:

         Provision of local, inter-city and international fixed-line telephone communications services, with the right of technical maintenance and operation of telecommunications networks and leasing of electronic communications channels;

         Provision of local, inter-city and international fixed-line telephone communications services through wireless access to the telecommu­nications network, with the right of technical maintenance and leasing of electronic communica­tions channels;

         Provision of mobile telephone communications services, with the right of technical maintenance and operation of telecommunications networks and leasing of electronic communications channels;

       Provision of services on technical maintenance and operation of telecommunications networks, on-air and cable broadcasting and television networks.

In the event a limited amount of licenses, they are granted on a com­petitive, transparent and non-dis­criminatory basis.

The right of provision of telecommu­nications services in Ukraine may be granted only to entities registered in Ukraine.

Services

Mobile Services

The license for mobile telephone communications services may be granted only if the necessary radio frequency resource is available.

Ukrainian law envisages special requirements for persons provi­ding mobile telephone services. Thus, for example, at least 30 % of such entity's personnel must have a higher education in information and communication technologies and have a minimum of one year of relevant work experience.

For obtaining the license an entity must submit the respective appli­cation accompanied with a plan of creation and usage of the mobile telephone network, and documents confirming the financial status of a potential licensee.

A licensee must start provision of the services under the license within six months following obtaining the license. If the license is issued for several regions or for the territory of Ukraine, a licensee must cover each successive region not later than within two months after the previous one.

A licensee has one year starting from the license issue date to cover 90 % of the cities' territory in the region (first region) indicated in the license. If a licensees issued for seve­ral regions, each successive 90 % of the cities' territory in the new region must be covered within two months after the previous one.

Radio and Television

The license for broadcasting using the radio frequency resource may be issued only if the STRCU decides, in accordance with the plan of usage of the radio frequency resource, that the respective channel or network should be created.

Under Ukrainian law some licenses are granted on a competitive basis (for on-air broadcasting and multi­casting using the radio frequency resource) and on the declarative basis (satellite, cable, wire broad­casting, etc).

The STRCU grants licenses for the following types of broadcasting: satellite, on-air, cable, wire broad­casting and multicasting. Digital broadcasting using the radio fre­quency resource is licensed as mul­ticasting. 

Depending on the territory, broadcasting may be as follows:

 

For obtaining the license, a legal entity must submit the respective application to the STRCU and indi­cate the information, inter alia, on founders (shareholders) and related parties of the potential licensee, on management and supervisory bodies, type and territory of broad­casting, program broadcasting con­ception, etc.

The STRCU may request submission of additional documents to verify compliance with antimonopoly provisions and provisions limiting foreign participation in the licen­see's capital.

It should be noted that under Ukrai­nian law, it is also necessary to obtain a respective license to conduct a broadcasting activity requiring the use of radio frequencies.

All licensees following the licenses’ receipt are included by the STRCU into the register of entities conducting informational activity.

Internet and Domain names

Currently providers of Internet ser­vices are not subject to licensing in Ukraine. Nonetheless, all providers must be included into the special Register of Operators and Providers of Telecommunications maintaining by the NCCIR. For this purpose, a provider must submit the relevant application indicating its status and the type and territory of activity.

To register a domain name, an inte­rested party shall refer to the re­spective domain name registrar. In case a person requests the second-level domain name (yourname.ua), the rights to the respective name must be confirmed, presenting the trademark registration certifi­cate or a trademark license agree­ment. Such confirmation is not required in case of application for third-level domain names (your-name.com.ua or yourname.kiev.ua, etc.) which sometimes may lead to cyber squatting.

For resolution of Internet-based dis­putes, including the disputes rela­ting the domain names, the Court of Arbitration was established by the Ukrainian Internet Association. However, such domain disputes may be referred to the UIA Court of Arbitration by mutual consent of the parties. In case such consent is absent, the parties may refer the domain dispute to the court of gene­ral jurisdiction.

Contemplated Reforms

It is expected that during 2015-2020 the Ukrainian Government will implement the following reforms:

          Creation of state information security system, as well as deve­lopment and adoption of the Infor­mation Security Conception;

          Promotion of telecommunica­tions network of 4th and 5th levels, development and realiza­tion of the roadmap for the imple­mentation of broadband Internet access in Ukraine;

          Adoption of amendments to legis­lative acts of a different level to ensure free access to the infor­mation on land plots and real estate, implement of modern informational technologies in courts, and improve the customs procedures, etc.;

          Encouragement of activity of com­panies from the informational technology sphere; 

          Full-fledged launch of public TV and radio, privatization of state and municipal printed media, ensuring the transparency and demonopolization of media.

The information contained herein is not a legal advice or clarification of the current legislation. 

If you need more information, please refer to Lavrynovych & Partners:
www.lp.ua | office@lp.ua

Join M&A Ukraine

Request membership to M&A Ukraine

  • Connect with members on M&A Ukraine who run, advise, finance, and acquire private companies
  • Find out about the latest Ukrainian M&A news, recent deals and historical M&A transactions with financials and exit multiples
  • Find new investments, partnership opportunities, funding, mergers and acquisitions deals in Ukraine