Owing to excessive social commitments to offer services in nonprofit market segments, the nation’s telecommunications operator Ukrtelekom has limited possibilities for investment in the development and modernization of its own network. Thus, Ukraine is losing out to the countries of Central and Eastern Europe in its pace of telephonization. This is the conclusion of experts at the International Center for Public Policy Research who have made an analytical study to support the privatization of Ukrtelekom. According to center director Vira Nanivska, this study aimed to find out what the state must do in order to ensure successful privatization of the company.
Undoubtedly, the Ukrtelekom sales strategy will take into account the view expressed by the president of Ukraine the week before last. Leonid Kuchma pointed out that Europe’s largest telecommunication operators, including those of Germany and France, are now racking up huge losses, as are the privatized companies in other countries. In this context, he was upbeat on the failure to sell Ukrtelekom, noting that there is no market demand for it and concluded that emphasis should be put on preparing Ukrtelekom for sale rather than on selling it immediately.
The chief executive’s opinion has been confirmed by current trends in the world telecommunication market. “One should find the way and a time to privatize Ukrtelekom in order to best accomplish what is needed,” thinks Alex Sundakov, director of the New Zealand Institute of Economic Research. He believes the Ukrainian privatization of telecommunications is overly politicized and accompanied by numerous debates on how practical privatization is, which is also typical of other countries. “I don’t think you can find and apply any ideal model from the outside world to Ukraine,” he Sundakov says. In his opinion, the Ukrainians should understand that it is impossible to immediately reach all their desired goals by privatizing Ukrtelekom and that for this reason that have to be ready to give something up. According to the expert, the world is reassessing privatization processes in the field of telecommunications. A wealth of examples show it is not worthwhile to hope that privatization alone will foster more effective management of telecommunications companies. The same goals can be achieved by successful commercialization. Criticism was also leveled at another popular privatization postulate that a facility should be sold at as high a price as possible in order to gain revenues for the budget. Sundakov emphasized that it is very profitable to sell a monopoly, but privatizing a state monopoly is not a good thing to do. Many countries that chose this option lost out in the long run, for they had thereby created an unfriendly environment for the development of telecommunications.
