National communications under attack: why lifecell criticizes Kyivstar and Vodafone’s plans
10 February 12:57
Mobile operator lifecell has warned of the risks associated with the possible merger of the tower (passive) infrastructure of the two largest market players, Kyivstar and Vodafone Ukraine. The company believes that such an agreement could threaten competition and the stability of national communications, especially in the context of war. Lifecell announced this in a statement commenting on the application submitted to the Antimonopoly Committee of Ukraine, according to "Komersant Ukrainian".
The company emphasizes that this is not a routine commercial agreement, but a decision that could permanently change the structure of the Ukrainian telecom market and slow down its development for years to come.
What is the agreement about?
On January 9, Ukraine Tower Company (UTC), owned by Dutch telecom holding Veon, submitted an application to the AMCU to acquire control over the assets of Ukrainian Network Solutions (UNS), owned by operator Vodafone Ukraine, according to the committee’s response to a request from Forbes Ukraine.
UTC and UNS are tower companies engaged in the construction and maintenance of telecom towers (base stations) and their leasing. All of Ukraine’s “big three” mobile operators have such companies. The oldest is Ukrtower, which is part of the DVL telecom holding (including the former lifecell) owned by French billionaire Xavier Niel.
If the assets are combined, their potential value could be approximately $300 million.
Competition as the basis for the development of the telecom market
Lifecell emphasizes that it is the independent investment decisions of each operator that determine:
- where and when coverage appears;
- how quickly networks are modernized;
- which technologies and services are implemented.
Healthy competition between independent operators has shaped a dynamic, innovative, and affordable market for many years. It has stimulated network development, the introduction of new technologies, and kept service costs down for consumers. According to lifecell, this progress is now under threat.
The risk of monopolization and the consequences for subscribers
The company warns that the merger of the passive mobile infrastructure of the two largest operators could lead to:
- market monopolization;
- structural imbalance in the industry;
- a slowdown in innovation;
- a weakening of focus on subscriber needs.
In the long term, such changes, according to lifecell, will inevitably affect end consumers — both in terms of service quality and availability.
National security issues
lifecell emphasizes that the consequences of a potential deal go far beyond the mobile communications market. They could create risks for the security of national communications as a whole.
The company points out that it is the diversity and decentralization of the telecom infrastructure that has made it possible to:
- ensure the functioning of defense forces and emergency services;
- maintain communication for millions of subscribers;
- maintain network stability during a cyberattack on one of the operators in 2023.
In wartime, the stability of the telecom market remains critically important, lifecell emphasizes.
Investment attractiveness under threat
The company also draws attention to Ukraine’s investment climate. International investors evaluate not only the financial indicators of the market, but also:
- the level of competition;
- the predictability of regulatory decisions;
- non-discriminatory access to key resources.
Excessive concentration of critical infrastructure in one set of hands may be perceived as a sign of increased risk, which could potentially deter investment in the telecommunications sector.
Call for open and transparent consideration
lifecell emphasizes that decisions on the possible consolidation of infrastructure should be made taking into account the long-term consequences for competition, the development of the telecom market, and national security.
Given the significant impact on the market and millions of consumers, the company believes that the agreement should be reviewed openly and transparently, with the involvement of all market participants and the expert community.
What other parties say
Vodafone Ukraine has stated that the operator is considering ways to improve the efficiency of its infrastructure, in particular through its consolidation with other market participants.
All further actions will depend on the approval of regulators and corporate governance bodies.
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