INTERNATIONALCOPYRIGHT U.S. & FOREIGN COMMERCIAL SERVICE AND U.S.DEPARTMENT OF STATE 2000
ALL RIGHTSRESERVED OUTSIDE OF THE UNITED STATES
 LOCAL LOOPWIRELESS: PAGING IN UKRAINE
 
AUTHOR:              RUBEN BELIAEV
 
24 JANUARY2000
 
                                                       SUMMARY
                                           
Although Ukraine’s telecommunicationsinfrastructure has developed significantly since 1992, it stilllags behind Eastern and Central European countries.  Thereare 80,000 paging customers in Ukraine.  Average monthlyfees vary from $25 to $40.  The size of the paging market iscalculated at between $24 million and $38 million for servicesonly.  Approximately 50,000 paging customers live inKiev. 
                                         
Industry insiders anticipatethe number of paging customers to double shortly.  Othersargue that in addition to the lack of growth in the pagingservices market, a growing number of paging clients opt formobile telephone service, due to new flexible and cheap servicepackages being offered by operators.  It should be notedthat all paging operators reported a lack of growth 1999.
 
8 paging companies operate in Kiev andaround 20 companies operate in other regions of Ukraine. The current lack of growth for paging services and strongcompetition from mobile phone operators may lead to theconsolidation of the market under 2 or 4 providers, while smallercompanies may close business all together.  Strongcompetition in the market has forced regional providers to teamup with operators at the national level.
 A.  MARKETHIGHLIGHTS & BEST PROSPECTS
 
ú       MARKETPROFILE
 
Telecommunications in Ukraine has expandedover the past few years, resulting in the development of bothwired and wireless communications.  Ukraine now possessesthe potential for sophisticated telecommunications in line withEuropean standards. 
 
1.  TELECOMMUNICATIONS INFRASTRUCTURE
 
1.1 WIRELINE COMMUNICATIONS
 
Significant advances in wire-linecommunications include the completion of a national telecomnetwork with 27 digital, long-distance exchanges. These arelocated in regional centers (the other 19 regional exchanges areanalog) and 3 digital international gateways, as well asinstallation of a national fiber optic network connected tointernational fiber optic networks: ITUR, TEL, TAE, BSFOCS. The fiber optic network consists of 3,500 km of fiber and digitalmicrowave communication lines.  Ukrainian users are offeredinternational telephone communication with more than 200countries.  ISDN service has been available in Ukraine sincelate 1996.
 
Two companies dominate the national andlong-distance wire line networks: Ukrtelecom and Utel,respectively.  Ukrtelecom was created in 1993, when theUkrainian Ministry of Communications reorganized the nationaltelecommunications structure by merging several telecomdepartments and regional PTTs into the Ukrainian StateTelecommunications Corporation (Ukrtelecom).  Owning alltransmission facilities, Ukrtelecom administers the national wireline infrastructure.  The company employs more than 130,000people.  Ukrtelecom’s profits totaled US$ 100 millionin 1995 grew to US$ 130 million in 1996 and US$ 220 million in1997.  Estimates for 1998 were thought to be around US$ 500million net profit, but devaluation of the national currencyreportedly brought profits down to US$140 million.
 
Ukraine's resistance to liberalization ofits telecommunications industry gave Ukrtelecom a substantialclout in both the political and business communities. Fierce opposition has delayed privatization of Ukrtelecom, whichwas reportedly proposed by the Ukrainian Government in 1997 and1998.  Opposition to privatization has come from differentpolitical forces in the National Parliament. Privatization, whenit happens, will certainly reshuffle the structure of thetelecommunications industry in Ukraine.
 
The long-distance and international providerUtel (owned by: Ukrtelecom 70.5 percent, Deutsche Telecom 19.5percent, PTT Telecom of the Netherlands 10 percent) was createdin 1992. With 1,500 employees and 23 affiliate offices, Utel hasenjoyed success: Utel’s total revenues exceeded $338million in 1998, with a profit of $38 million, compared to $312million in 1997, with a profit of $34 million for the year. Thisprofit was up from $27 million in 1996.  The company hasreinvested profits into infrastructure development, primarilyconcentrating on interregional and internationalcompatibility.  Ukrtelecom announced more than once itsplans to purchase the shares of foreign shareholders (reportedly,negotiations in this regard are under way) to make itself moreattractive for potential strategic investors, who would beinterested in privatization of Ukrtelecom.  AT&T had a19.5 percent share in Utel in 1992-1999, but late in 1999 theseshares were sold to Ukrtelecom.
 
Ukraine's wire line network, remain far fromoptimal.  First, fees for new line installation can reachUS$ 1000, and may require a long wait.  Secondly, althoughan increasing percentage of digital equipment is in place, manyregional stations continue to connect customers using outdatedequipment.  Therefore, the quality of the connection cannotbe guaranteed.   Almost all-local loops remain analogwith obsolete and worn-out equipment.  This fact prohibitsthe introduction of a new billing system.  Users pay asymbolic fee of US$ 2-3 per month.  Only in large cities hasa new billing system, based on per minute billing, beenintroduced.  Almost all-local loops are unprofitable. Ukrtelecom subsidizes local loops with revenues received fromunrealistically high fees for international calls, lineinstallation, and registration. 
 
In small towns and villages, the situationis even worse.  There are instances when only one lineexists in a village of several thousand people; the wait for aline can range between 7-11 years.  The number ofphone lines may vary throughout the regions.  Kiev has thehighest density (43 percent), followed by the industrial regionsin the east (19 percent).  Telephone lines are scarce in theagricultural regions of Transcarpathia and Carpathia, in thewestern part of the country.
 
As stated before, Ukraine’stelecommunications infrastructure has developed significantlysince 1992, but it still lags behind Eastern and Central Europeancountries. The Government of Ukraine (GOU) hopes to raise averagewireline teledensity from 19 to 40 percent over the next 10years, placing the country closer to industrialized worldstandards.  This requires the installation of 10 million newphone lines and would costs between US$ 5-10 billion. This figure calls for US$ 1 billion of annual investment into thedeveloping industry.  This at the present time only seemsfeasible after Ukrtelecom is privatized.  In the meantime,wireless communication has emerged as the only viablealternative.
 
 
1.2 WIRELESS COMMUNICATIONS
 
Wireless communications is the most activesubsector of the telecom industry in Ukraine.  The marketpenetration for mobile communications is 0.3 percent.  It isone of the most promising subsectors of the market, because ofthe investments it has received since 1997, when the GSM900network began.  Mobile service customers do not number above170,000, but significant reductions in tariffs fees and theintroduction of flexible payment plans may increase these numbersconsiderably. 
The most striking characteristic of theUkrainian mobile
Communications market is the number ofoperators.  Presently, five operators offer wireless mobileservices in the following standards: GSM900, NMTi 450, DCS 1800,and D-AMPS.  Two more operators are deploying CDMA and TDMAwireless fixed networks with a potential to go into mobile. Withexorbitant frequency license fees established for GSM900 andDCS1800 spectrum use, a limited number of customers and thenumber of operators, it is expected that the development ofmobile wireless services in Ukraine will slow down and some ofthe operators will leave the market.
 
1.3 PAGING
 
The first provider of pagingservices in Ukraine, Company Radiocom, started operating in1994.  RDS was selected the standard for pagingservices.  This standard was in use up until January 1999,when it was replaced by POCSAG.  From 1994 to 1997, pagingnetworks operated on RDS and POCSAG standards.  In 1997,Ukraine was the first in the CIS countries to introduce the ERMESstandard.  Though the State Communications Committee ofUkraine selected RDS and ERMES as national standards for pagingcommunications in Ukraine, POCSAG and FLEX standards are widelyused.
 
Official statistics for thesize of paging services market in Ukraine are not exact. The Information Center of the State Committee for Statisticsprovided the following information on revenues generated bymobile communication services:
 
REVENUES FORJANUARY-SEPTEMBER 1999
($1/UHA 3.7-4.5)
Type of communications
Private companies
Joint Stock Companies
State owned companies
Cellular
    -0-
UHA 587,409,600
     -0-
Paging
UHA 527,000
UHA  22,981,500
     -0-
Trunking
UHA 1,342,100
UHA   3,925,800
     -0-
 
(Source:“DK-Zvyazok”, No.42, Nov. 1999)
 
Estimates indicate pagingcompanies provided USD7.64 million worth of services in 1998, or4% of mobile services in Ukraine.  Reportedly, 71 percent ofthe total paging services sold in 1998 were provided in Kiev,where 40-45 thousand customers are located.  15.7 percent ofthe paging services were provided in Odessa, the second largestpaging market in Ukraine.  According to these estimates,there are 50,000 customers for paging services in Ukraine.
 
The leading business magazine“Biznes” (No. 8, February 1999) provides conflictingestimates.  In their opinion, there are 80,000 pagingcustomers in Ukraine.  Average monthly fees vary from $25 to$40.  According to these calculations, the size of thepaging market is between $24 and $38 million for servicesonly.  Approximately 50,000 paging customers live in Kiev.
 
Numbers for the pagingequipment market are not available. Paging companies preferequipment manufactured by Phillips (50%), Motorola (45%), and NEC(5%).
 
Industry experts anticipate thenumber of paging customers to double shortly.  Other expertsargue that in addition to a lack of growth in the market, thereis a growing number of paging clients that opt for mobiletelephone services due to the new flexible and cheap servicepackages being offered by mobile phone operators.  It shouldbe noted that all paging operators reported a lack of growth in1999.
 
Presently 8paging companies operate in Kiev and around 20 operate in theregions of Ukraine. The lack of growth in the paging services andcompetition from mobile phone operators, will lead to theconsolidation of the market to 2 or 4 providers, while smallercompanies may close. Strong competition in the market will forceregional providers to merge with operators at the national level,increasing their roaming area.  In this case a corporationor an association under the same trademark is usually formed. Alloperators provide manual roaming, except for U-page that offersautomatic roaming.
 
Monthly subscriber fees chargedby providers ranges from USD 25 to USD 40 depending on theservices provided.  Some providers have claimed that afurther decrease in fees will make their business economicallyunfeasible.  However, some regional companies charge as lowas $15 a month and continue to operate, admittedly their servicesmay be not of the best in quality and reliability.  Mostpaging companies have the following features in their marketingstrategies:
 
ú      service packages offered by established paging companies arenearly identical in price, given the actual size of the marketand number of operators, (fees have already hit thebottom); 
ú      the real competitive distinctions are in a) quality andreliability of service, b) coverage area, and c) additionalservices offered on top of the basic package;
ú      paging operators set their pricing policy based on the fact thatthey have to compete with cellular and trunking companies for onecategory of clients (i.e. mobile service consumers);
ú       itshould be noted that while the loss of paging subscribers tocellular providers grew, the number of customers that use bothpaging and cellular services increased three fold, enablingcustomers to save on incoming calls;
ú      standard package offered to a new customer includes the price ofthe pager and subscription fee based on monthly user fee;
ú       theprice of a package depends on the number of months prepaid: thelonger the term, the lower the monthly fee;
ú      clients are offered digital or text-digital pager packages, thesecond package, as a rule, is twice as expensive;
ú      flexible discounts are offered to categories of customers(corporate clients, students, war veterans, doctors, etc.);
ú       someproviders started offering their customers an additional option,a discount shopping card;  
ú       newcompanies offer aggressive pricing;
ú      network upgrading and expanding the coverage area does not leadto an increase in monthly fees;
ú      average monthly fees tend to decline;
ú      profitability of paging has tended to decline, preventing newproviders from entering the market;
ú       TheCPP (Calling Party Pays) principle, widely used in manycountries, is not popular due to low-income level of mostUkrainians.
 
The following chart indicatesservice packages offered by two different providers of paging,along with the costs for pagers:
 
 
PAGER
PRICE ($)
MONTHLY FEE ($) + PAGER
MONTHLY FEE($) + PAGER
MONTHLY FEE($) + PAGER
MONTHLY FEE($) + PAGER
***RADIOCOM COMPANY***
**STANDARD PACKAGE**
1 MONTH
3 MONTHS
6 MONTHS
12 MONTHS
CIRSYS
49
78
123
193
327
NIXXO SWING
49
78
123
193
327
GLS BUMERANG
59
88
133
203
337
PHILLIS TWO CAN
59
88
133
203
337
GLS BUMERANG MINI
69
98
143
213
347
GLS BUMERANG 6
69
98
143
213
347
DAEWOO GLA
69
98
143
213
347
MOTOROLA SCRIPTOR LX1
69
98
143
213
347
SUPER VISOR
79
108
153
223
357
MOTOROLA SCRIPTOR LX2
79
108
153
223
357
NEC 26B
89
118
163
233
367
MOTOROLA SCRIPTOR LX4
89
118
163
233
367
NEC 21A
99
128
173
243
377
PHILLIPS PR32310
99
128
173
243
377
DAEWOO APR1100
30
36
45
59
87
PHILLIPS MYNA
39
45
54
68
-
 
**BUSINESS**
**PACKAGE**
 
 
 
 
CIRCISYS
49
76
118
179
292
NIXXO SWING
49
76
118
179
292
BUMERANG 2
59
86
128
189
302
PHILLIPS TWO CAN
59
86
128
189
302
GLS BUMERANG MINI
69
96
138
199
312
GLS BUMERANG 4
69
96
138
199
312
DAEWOO GLA
69
96
138
199
312
MOTOROLA SCRIPTOR LX1
69
96
138
199
312
GLS SUPER VISOR
79
106
148
209
322
MOTOROLA SCRIPTOR LX2
79
106
148
209
322
NEC260
89
116
158
219
332
MOTOROLA SCRIPTOR LX4
89
116
158
219
332
NEC 12A
99
126
168
229
342
PHILLIPS PRG2310
99
126
168
229
342
DAEWOO APR1100
30
35
41
57
80
PHILLIPS MINA
39
44
53
66
89
***LINK TELECOMCOMPANY***
**DIGITAL PACKAGE**
 
 
 
 
PHILLIPS TWO CAN
62
70
87
112
225
PHILLIPS FIORI
62
70
87
112
225
MOTOROLA SCRIPTOR LX1
57
65
82
108
216
MOTOROLA SCRIPTOR LX2
68
75
93
118
237
 
MOTOROLA ADVISOR
75
83
100
125
250
 
**STANDARD PACKAGE**
 
 
 
 
PHILLIPS TWO CAN
62
75
102
143
287
PHILLIPS FIORI
62
75
102
143
287
PHILLIPS PRG2310
111
124
151
192
384
MOTOROLA SCRIPTOR LX1
57
71
98
138
277
MOTOROLA SCRIPTOR LX2
68
81
108
149
299
MOTOROLA ADVISOR
75
88
115
156
312
 
**BUSINESS**
**PACKAGE**
 
 
 
 
PHILLIPS TWO CAN
62
84
94
191
383
PHILLIPS FIORI
62
84
94
191
383
PHILLIPS PRG2310
111
133
143
240
480
MOTOROLA SCRIPTOR LX1
57
79
89
186
373
MOTOROLA SCRIPTOR LX2
68
90
100
197
395
MOTOROLA ADVISOR
75
97
107
204
408
 
** **
(Source: Magazine “MyrSvyazy” No.3, Nov. 1999)
 
Analysis of the price listshows that 1999 prices are down 11%-40% versus 1998 pricinglevels. 
 
**B.  COMPETITIVEANALYSIS**
** **
There are five major pagingoperators in Ukraine that share 76% of the national market. The following chart shows the current share of the market andpotential coverage that operators may have in the existingnetwork:
** **
**OPERATOR**
**CURRENT SHARE OF THEMARKET**
**POTENTIAL COVERAGE:**
**TERRITORY (km2)**
**POTENTIAL COVERAGE:PEOPLE**
**UKRPAGE**
**24%**
**377,000**
**41,000,000**
**RADIOCOM**
**20%**
**300,000**
**40,000,000**
**BEEPER**
**20%**
**140,000**
**21,000,000**
**LINK TELECOM**
**8%**
**30,000**
**3,000,000**
**U-PAGE**
**4%**
**30,000**
**4,000,000**
**OTHER**
**24%**
**-------**
**------**
** **
(Source: Magazine “MyrSvyazy” No.3, Nov. 1999)
** **
**MAJOR PAGINGOPERATORS:**
** **
**UkrPage**
 
UkrPage, aUkrainian-American joint venture, was formed in September 1997,as a result of a merger between two paging companies in operationsince 1995. 
 
The companyhas 20,000 subscribers in Ukraine, of which 4,000 live inKiev.  UkrPage claims to control almost 25% the pagingmarket.  The company’s network covers 23 regions andover 150 cities of Ukraine.  The company plans to provideroaming with Russia and Belarus. UkrPage actively incorporatesregional operators into its network. UkrPage employs the ERMESstandard, and offers services in English, Ukrainian, and Russian.
 
UkrPageprovides clients with a single multichannel access number (054)service.  The Company offers pagers manufactured by Philips,Motorola, NEC, and Future Telecom.  The Company offersdiscounts for teachers, students and doctors. 
 
UkrPageplans to use Internet to forward messages, bypassing thecompany’s operating center. UkrPage works with the Ministryof Interior to establish a system that would provide clients withoffice, residential security and fire alarm service.
UkrPageoffers the following additional services:
ú      banking and financial news
ú      general news and weather forecasts
ú       voicemail
ú      virtual pager (forwarding of messages to the e-mail address)
ú      leasing of pagers
ú       accessand monitoring of personal bank account
ú       grouppaging: up to five pagers are connected to the same personalservice number
  Radiocom
 
Radiocom was founded inApril 1994. The Company became the first paging provider inUkraine and operated the POCSAG and RDS standards (the RDSstandard ended early in 1999). The company doesn’t plan tointroduce other standards before its customers exceed25,000.  Radiocom has 20 percent of the local market forpaging.  Radiocom offers a single service access number:069, which has 36, access lines.  The company employs 150people.  In April 1998, Radiocom in association withregional paging companies established the Radiocom Corporationincluding ABC+ (Nikolaev), Astelecom (Cherkassy), Bravo (Odessa),Gannibal (Kherson), and Dniprovyklyk Ltd. (Dnepropetrovsk). To date, the Radiocom network covers 22 regions and 140 citiesincluding Odessa, Mykolayv, Dnypropetryvsk, Kherson, Zhytomyr,Cherkassy, Poltava, Donetsk, Chernyhyv, Kharkyv, Luhansk,Kyrovohrad, Uzhhorod, Vynnytsa, Khmelnytskiy, Sumy, Zhaporyzhyya,Chernyvtsy, Lvyv, Symferopyl.  About 80-90 percent of thecompany’s customers are located in Kiev.
 
Radiocom subscribers can receive e-mailmessages and digital messages to their telephone.  Thecompany also started offering voice mailbox service. Beginning in December 1997, Radiocom provided itscustomers with the incentive of a free discount card“Capital Club”.
 
**BeeperPaging**
** **
The Company Beeper was foundedin October 1995.  Reportedly, shareholders include Americanand Israel companies.  Beeper employs 300 people and boastsof having a 20 percent share of the paging market.  Companycovers 23 of the major Ukrainian cities and their regions: Kievcity, Kharkov, Donetsk, Dnepropetrovsk, Zaporyzha, Odessa,Mykolayv and Lvyv.  To expand its business network, Beeperincorporated several regionaloperators.         
 
Beeper was the first Ukrainianoperator employing the truncated data interchange format, FLEX(this standard is also used by UnetPage). The company offers asingle access telephone number with 21 access lines. Beeper’s customers are serviced in Russian, Ukrainian andEnglish.  Beeper is an authorized distributor of pagingequipment manufactured by Motorola. 
 
The Company offers a variety ofadditional services: Aside from paging, Beeper operates atrunking network in Kiev based on equipment manufactured byMotorola. Company performs telecom “turn key”projects for corporate clients.
 
**LinkTelecom**
Link Telecomstarted operating in November 1995.  Reportedly, thefounders are PIKON -Macedonia’s paging and trunkingprovider, and Travelink -a Ukrainian Company operating a chain ofMotorola service-centers.  To date, the Link Telecom networkcovers two cities: Kiev and Zhitomir, it has licenses to operatein 7 regions.  The company has over 4,000 subscribers, andcooperates with regional operator’s, in this way,increasing the number of customers and the coverage area.Currently, Link Telecom has 8 percent of the local market forpaging.
 
Link Telecomplans to introduce roaming with numerous countries, includingRussia, Kazakhstan, Belarus, Macedonia, Bulgaria, and to expandto Eastern European markets in the near future.
 
Link Telecomis also an official distributor of Golden Telecom, a GSM1800operator.  The cooperation began with the Golden Packageproject, when a subscriber buys a pager he receives a free mobilephone.  This marketing boosted sales of Golden Telecom'smobile phones by 25 percent.
 U-Page
Closed Joint Stock Company U-Page is anexclusive provider of paging services based on ERMES standard inUkraine. In October 1997 U-Page started providing“Eurotext” service. Currently, U-Page has 4 percentof the local market for paging.
U-Page automatic roaming network covers Kievand Dnypropetrovsk.  U-Page offers the following additionalservices:
ú      forwarding of alphanumeric messages directly though amultichannel phone in Kiev;
ú      reception of messages via Internet to the home page of U-Page(http://www.eurotext.kiev.ua;
ú      forwarding of e-mail messages directly to the pager;
ú      voice-mail service
ú      international and Ukrainian news
ú      weather forecasts
ú      entertainment
ú       sportnews
ú       roadtraffic reports
ú      page-print (print out of e-mail messages)
ú      page-mail (forwarding of e-mail messages to the phone)
 
 
**C.  END-USER ANALYSIS**
** **
Statistics and research, that would identifysocial or professional groups most inclined to become customersof paging services are not available in Ukraine.  However,some estimates can be made for mobile phone and Internet users,two categories of customers that are very close and often overlapwith paging user.  Based on this analogy it can be estimatedthat an average Internet user in Ukraine is a male, between 21-40years old, engaged in business.  Most paging users arecorporate customers or medium and small businesses. Miscellaneous self employed individuals including privatedoctors, real estate agents, multi level marketing agentsrepresent a large portion of the paging customers base.  Themost promising end-user category is the corporate user.
 D.  MARKETACCESS
** **
Leading Ukrainian paging operators arelooking for opportunities to diversify and to upgrade theservices they offer.  Expensive local credit and lack ofconfidence from foreign manufacturers usually limit their growthor size.   In practice, the U.S. companies that operatein the Ukrainian market through a local partner achieve betterresults than those entering on their own.  Ukrainian companyrepresentatives who are engaged in the IT industry, usuallyposses excellent professional skills and an advanced educationallevel.
 
1. Legal environment
 
Because of the capital-intensive nature oftelecommunications development industry, foreign firms have been,and will continue to be, significant players in the market. At the same time, foreign firms are restricted in theirparticipation by stringent government regulations. Currently, no Telecommunications provider in Ukraine is 100percent foreign-owned.  Ukrainian law stipulates thatthe foreign share in a telecommunications services provider maynot exceed 49 percent.  Regardless of a foreign partner'sinvestment, only Ukrainian private or state companies are allowedto apply for the operational and frequency licenses and must holda 51 percent of the joint venture.  This provision does nothowever, regulate profit distribution, which can reflect theactual investment made by shareholders. 
 
In addition, no provider of public servicesmay receive access to the wireline networks and public switcheswithout establishing a cooperative agreement withUkrtelecom.  A lack of transparency in the tenderingprocess, erratic behavior on behalf of the government entities,and frequent changes in legislation have posed difficulties toinvestors.
 
2. Licensing
 
To launch a telecom network in Ukraine,operational and frequency license are required.  However,providing paging services is not subject to an operationallicense.  Only a frequency license is required to operate apaging system.  The State Committee for Communicationsissues the frequency license upon request and paymentreceipt.  The cost of frequency license for paging dependson the spectrum needed and is rather symbolic, equal to severalhundreds of USD.  The obvious benefit for the lack of alicensing requirement for paging operations is counter-weightedby the fact that it creates problems for businesses in taxregulations and increases competition in the market. 
 
3.  Standards and Certification
 
A 1994 GOU decree imposed compulsorycertification requirements for goods imported into Ukraine. The decree specifies telecommunications equipment as subject tocertification and regulates certification procedures. Ukrainian regulations for communications specify that allterminal telecommunications equipment is subject to mandatorycertification.  All other telecommunications equipment issubject to voluntary certification, unless the equipment is to beused for public networks.  Equipment used in public networksmust undergo mandatory certification by special testing centersunder the authority of the State Committee forCommunications.  This requirement sometimes turns into aburden, because of widespread corruption.
 
Certificates may be one of two types: (a)Certificate of Acceptance of a Foreign Certification, issued by aUkrainian certifying agency; and (b) Conformance Certificateissued by a Ukrainian agency upon certification of goods.
 
Certificates issued by foreign certificationauthorities are recognized in Ukraine only to the extent providedin international treaties to which Ukraine is a party.  Inmost cases, a foreign certificate will not be honored withoutfirst testing the product.  To apply for certification, thefollowing documents are to be submitted to the State Committeefor Communications of Ukraine:
 
-  An application stating thatthe company wishes to
   Certify imported products;
-  A description of the equipmentand its technical
   Specifications.
 
The availability of a certificate ofaccreditation from a well-known foreign testing laboratoryand protocols/summary of test results would facilitate andexpedite the issuance of a Ukrainian certificate.  Uponreceipt of these documents, the State Committee determines thelaboratory that will conduct the testing of the equipment. In most cases, this will be one of two research instituteslocated in Kiev and Odessa.  The laboratory is responsiblefor testing the equipment, and its compliance with the followingbasic requirements:
 
- Electrical and environmental safety;
- Electro-magnetic compatibility;
- Operability with national publicnetwork
  equipment.
 
In case a foreign company intends to importequipment on a recurring basis, the certifying authorities mayrequire a visit from Ukrainian standards specialists to theimporter's production facilities. The visit is to certify thatthe company in question is able to adhere to quality and safetystandards in the equipment samples submitted for testing.
 
Late in 1998, the Ukrainian authoritiesclaimed that in the future Ukraine would adhere to E.U.regulations for standards and certification.  However,meeting E.U. standards and certification process will not be aquick nor automatic process. Industry experts believe that onlycertificates issued by selected certifying centers will beaccepted unconditionally.