Interview with Oleksandr Kogut, Government Affairs Director at Kyivstar

Last year was an extremely challenging one for the whole of Ukraine and all sectors of its economy. How did your industry fare in the turbulent year of 2022?

The past year has shown the importance of stable communications for society. The ability to get in touch or receive life-saving information is as important as access to medical care, food or shelter. That is why the main achievement of the telecoms industry is that telephony and internet services are available despite shelling, bombing, destruction and technical difficulties.

In addition to the destruction of telecoms infrastructure, the industry has had to overcome many other challenges caused by the war. These included providing communication services to people who were forced to migrate abroad or to other regions of Ukraine, helping emergency services to keep the public informed, providing internet to bomb shelters and refuges, and assisting the Armed Forces of Ukraine and internally displaced persons.

Almost 90% of Kyivstar's network is operational and provides subscribers with communications. Even during the worst missile attacks and prolonged blackouts, the share of working equipment did not fall below 70% on average across the country. Timely preparation of the network for operation in critical conditions played a role in this.

Mobile operators also help each other in eliminating emergencies, sharing equipment and communication channels. The telecoms industry has become more united in the face of a common threat and proved to be a reliable pillar of the nation.

War is always a period of economic decline, or stagnation at best. At the same time, your company did not stop investing. What was the motivation to invest in the midst of a war the likes of which Europe has not seen in 70 years?

Kyivstar has been operating in Ukraine since 1997. Over our history, we have invested more than USD 6 billion into the Ukrainian economy and paid more than UAH 90 billion in taxes and fees to the state budget. We are the largest telecommunications operator in Ukraine, serving 24.8 million mobile subscribers and more than 1.2 million fixed-line internet customers.

Kyivstar, as market leader, does everything possible to protect communications for the public and for critical state institutions and enterprises in Ukraine. This is our main motivation.

That is why we invested UAH 5.9 billion (EUR 148 million) in technological development in 2022 and plan to continue investing in network development in 2023, including the construction of 1 000 new base stations. In addition, we paid UAH 10.8 billion (EUR 269 million) in taxes to the Ukrainian budget, an increase of almost UAH 600 million (EUR 15 million) compared to the peaceful year of 2021.

Besides the persistent uncertainty, what do you perceive as the biggest difficulty when doing business in Ukraine?

Firstly, Russian missiles and other attacks have destroyed almost 10% of Kyivstar's base stations. Up to 80% of Kyivstar's infrastructure in the de-occupied areas had been destroyed, and will cost at least UAH 1.5 billion (EUR 37.4 million) to repair.

Secondly, more than 3.5 million Kyivstar subscribers moved to western Ukraine from other regions when the war started. Accordingly, telecommunications traffic there increased by 30-40%. We already lack enough radio frequencies to provide quality service to these subscribers and businesses, so we need new radio frequency bands.

Thirdly, there is the matter of mobilising the company's unique technical specialists, who work hard to keep communications open.

Have you used any EU support since the beginning of the war? Was it useful and what would be further needed to support Ukrainian companies in 2023?

No, we have not received any funding from the EU. However, we receive professional support and assistance from the international telecoms community. For example, thanks to cooperation with foreign partners on international roaming, our company was able to provide Ukrainian subscribers who had temporarily moved abroad with communication and internet services at the same rates as we offered in Ukraine. What kind of assistance will Ukrainian companies need? Most important is war risk insurance. Next is access to funding for rapid recovery, primarily to rebuild critical infrastructure and increase its resilience. In the mobile sector, tax or other preferences for EU suppliers involved in rebuilding Ukraine's infrastructure would be very useful. This would allow the necessary equipment and licences to be provided to Ukrainian companies at an affordable price.

Do you think shifting Ukraine from a wartime to a peacetime economy will be an opportunity to make it a testing ground for the green and digital transitions?

According to a new joint assessment released today by the Government of Ukraine, the World Bank Group, the European Commission and the United Nations, Ukraine's recovery and reconstruction needs have risen to EUR 383 billion. And this is only for the period 24.02.22 – 24.02.23. This is an incredible amount of money, but at the same time an incredible opportunity to modernise the country, including in the digital sphere, and this should be based on the principle of "build back better" – significantly reducing the digital divide between urban and rural areas, ensuring equal access to digital infrastructure and guaranteeing the long-term development of digital services.