RESTRICTED
WORLD TRADE WT/ACC/UKR/43
9October 1997
ORGANIZATION(97-4294)
Original: English Working Party onthe
Accession ofUkraine
ACCESSION OFUKRAINE
Statement oftheUkrainian Minister forCommunications, Mr.D.A. Khudoliy
TheMinistry ofCommunication ofUkraine hasbeen conducting significant activity on
improvement ofthefield'smanaging structure during lastfiveyears.
Division intomailandelectronic sub-units andcreation of"Ukrposhta" and"Ukrtelecom"
Associations, where appropriate regional enterprises were included, were conducted in1994-1995.
Atthesame time, reorganization oftheUkrainian communication field'smanaging structure
tookplace. Separation ofregulating functions from day-to-day (operative) management occurred.
Associations wereentrusted withfunctions ofday-to-day management bytechnological processes and
property management; theMinistry keptthefunctions ofregulating relations, determined strategy of
thefield'sdevelopment andcontrolled activity ofservice providers.
TheMinistry ofCommunication ofUkraine conducts anactive policy toliberalize themarket
ofcommunication services. Onthemarket, itfacilitates increase ofservice providers ofallownership
types andfastdevelopment ofservices, especially inthefieldoftelecommunications.
Currently, thereare700service providers, including: 27percentinlocaltelephone networks,
18percentintelephone networks withmovable objects, 14percentintelevision andradiobroadcasting
and28percentontheconstruction ofcommunication infrastructure.
However, economy ofUkraine completely needs faster development oftelecommunications
networks. Currently, ourcountry significantly remains behind thelevel oftelecommunications '
development (forexample, ithas18telephone apparatuses per100residents when developed countries
ofWestern Europe have50andmore apparatuses). Moreover, telecommunication equipment usedin
telecommunication networks needs tobeupgraded andrenovated.
More thanUS$10billion arerequired forUkraine toachieve anaverage european quality
andquantitative levelindevelopment oftelecommunications systems.
Therefore, significant increase ofinvestments isneeded foranintensive development of
telecommunications inUkraine. These investments should beatthelevelofseveral hundred million
United States 'Dollars peryear.
Atthesame time, under existing conditions country mayprovide levelofinvestments intothe
development oftelecommunications notmore thanUS$200million peryear, including "Ukrtelecom"
Association intheamount ofUS$150million. Loan resources which could provide financing of
development programmes asrequired arenotavailable for"Ukrtelecom".
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Therefore, onlyinternational andinternal markets ofprivate capital maybeusedasmain
resources ofcapital forfinancing offastdevelopment ofthenational telecommunications 'system.
Notwithstanding thepolicy oftelecommunications 'services market liberalization, conducted bythe
Ministry ofCommunication ofUkraine, possibilities toraiseforeign investors arelimited because of
unfavourable investment regime intheUkrainian economy andinsufficiency ofguarantees 'andrights '
protection system. Atthesametime,electronic communication services arequiteattractive forinvestors
from investment andcrediting ofprojects standpoint. Butsome enterprises of"Ukrtelecom" arenot
attractive forinvestors anddonothavepossibilities toraiseenough volume ofinvestment resources.
Justbecause ofthistheAssociation 'sstructure requires substantial changes. TheMinistry of
Communication hasdeveloped theProgramme ofRestructuring andtheConcept ofPrivatization in
theField ofCommunication. Inthenearest future thisProgramme willbesubmitted totheGovernment
forapproval.
Structural changes provided forbytheProgramme aredirected atcreation offavourable
conditions forafastdevelopment oftelecommunications which theUkrainian economy urgently needs.
Itisplanned toachieve bytransformation of«Ukrtelecom» intointegrated enterprise withfurther
corporation andprivatization.
TheProgramme isestablished upto2003. Itsimplementation willbeopenandunderstandable
forcustomers andservice providers, andallow toprovide anaccess ofcustomers totelecommunications
servicesofhighquality;andcreatecompetitiveenvironmentwithequalpossibilitiesonactivityofservice
providers.