Ukraine considering drastic measures to reduce Russian influence

Amid ongoing conflict with Russia, the government of Ukraine is reportedly seeking to reduce its larger neighbour’s influence in its mobile sector.

An unnamed Ukrainian minister has reportedly stated that the government intends to prevent Russian operators such as MTS from obtaining 3G spectrum in upcoming auctions.

Prime Minister Arseny Yatseniuk (pictured) has even threatened extreme measures such as selling 3G licences to EU operators for as little as UAH1 ($0.077) in order to undermine Russian dominance in the mobile market.

His comments reflect a law effected last week that enables the Ukrainian government to impose restrictions on Russian companies present in Ukraine. However, as Kyivstar (backed by VimpelCom) and MTS together hold around 75% of the Ukrainian mobile market, the impact of these restrictions is likely to be limited.

Any governmental intervention in Ukraine could be met by a legal challenge from the Russian operators. In addition, US and Europe-based investors in VimpelCom and MTS could suffer from any sanctions placed on the Russian firms.

Additionally, selling spectrum to European operators for a token fee just to spite Russian operators would do Ukraine more harm than good – the country needs the cash that a fully competitive 3G auction would raise.

 

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