VEON, the company may lose part of radio frequencies in Uzbekistan because of the government’s decision to reallocate the resource between operators. This can lead to communication problems with subscribers and the need for additional investment
According to the report of the Ministry for development of information technologies and communications of Uzbekistan, published on may 13, the Republican Council for radio frequencies made a decision on the reallocation of frequency bands in the ranges of 900 and 1800 MHz in the same amount between the existing operators. “This decision provides equal competitive conditions for access to the radio spectrum and creates conditions for efficient use of radio frequencies to accelerate the introduction of technology LTE (a standard for mobile communication of the fourth generation, 4G), improving the quality of services of cellular communication in the Republic”, — stated in the message.
Most from the redistribution of frequencies will suffer Uzbek “daughter” VEON (until recently the company was called VimpelCom), Unitel (renders services under brand Beeline). From the message Ministry suggests that every cellular operator will eventually have to 24.8 MHz in the range of 900 and 1800 MHz. At Unitel still was of 48.8 MHz, that is, the company will lose almost half of the frequencies. Other mobile operators of Uzbekistan from the solution, on the contrary, will win: Coscom still had to 17.8 MHz, Universal Mobile Systems is 15.6 MHz, the “UzMobile” Is 16.2 MHz.
As noted in the Ministry, the presence of certain operators of a small amount of frequencies is the reason for the “inconsistency of quality of cellular services to the established requirements”.
Representative VEON has not provided a comment at time of publication. “If this decision will come into force, the company will lose about 47% of the frequency of the voice resource, and almost half of our subscribers — [lose] touch,” — said earlier the representative of Unitel, the Agency “Interfax”. In Unitel considered that the removal of some of the frequencies “paralyzing the company.” To keep the current quality level of communication, companies will need to invest about $60 million in the construction of new base stations and a significant time for this work.
In the first quarter of 2017 Unitel’s revenue was $153 million, or 6.7% of revenue VEON (for comparison, in the Russian “VimpelCom” had of 45.55%). The company served 9.5 million mobile subscribers, or 4% of the total base VEON (Russia accounted for 24%).
This is not the first problem for VEON in Uzbekistan. In 2014, the government of the United States and the Netherlands suspected the company and the Telia group (which owns Coscom) and the Russian MTS (owned cellular operator “Uzdunrobita”, but left the market) in bribes to high-ranking officials of Uzbekistan, with access to the local market. It was assumed that these companies would pay the daughter of a former President of the country Islam Karimov, Gulnara Karimova for obtaining licenses and frequencies. In February 2016 VEON has agreed with the American and Dutch authorities on the settlement of claims, recognizing the fact of bribery. The company also paid a fine in the amount of $795 million.