By Viktor MELNYK, The Day
One of the President's latest economic decrees at last materialized what
had been the subject of so much talk: it deals with the privatization of
the country's main nervous system, the state-run Ukrtelekom telecommunications
enterprise. Following this, the government also issued an instruction testifying
to its consent to Ukrtelekom buying a 49% share from the foreign founders
of the Utel Company. And on the Monday before last, the Utel Oversight
Board gathered in Rome to decide on conditions for this sale. The price
of Utel stock is by no means the only issue connected with the privatization
of Ukrtelekom. For example, it is still not clear what will be the destination
of the funds earned by privatization (the government is going to throw
them into general circulation) and what will happen to services that are
unprofitable but indispensable for the people.
The Day's questions about the particularities of this process
is being answered by Leonid NETUDYKHATA, general director of Ukrtelekom.
"Mr. Netudykhata, the future privatization of Ukrtelekom provokes
well-grounded concern: we see the experience of Russia, where not only
problems but also scandals have cropped up. How will the Ukrainian scheme
differ from the Russian one?"
"It is difficult for me today to go into detail on issues to be dealt
with by the state, for we, first of all, fulfill the tasks we are given;
we do not map out a strategy. As to the shortcomings of the Russian telecommunications
system and its privatization, we took it into account during our preliminary
work. We carried out restructuring and brought all the regional Telekoms
into a single mechanism, an integrated property complex. Ukrtelekom is
a single juridical person with one settlement account, i.e., a single technological,
financial, and organizational structure employing about 130,000 workers.
The restructuring allowed us to cut costs and make the united structure
function on the country's territory.
"The Russians do not have this today, and from this flows the serious
problems they have. When they were conducting the privatization, they did
not have a single complex, privatization was carried out by regions, so
the investors did not show much desire to invest in such scattered communications
networks. We, on the contrary, hope investors will not have major problems."
"What time-related prospects of privatization do you see?"
"The market situation is volatile: it changes from more complicated
to more attractive, this is why all the countries that have privatized
their telecommunications prepared the legal basis in advance: they passed
laws and decrees. They chose a starting moment on the basis of the demand
on their own stock market and on the markets of other countries. This is
a very complex technical procedure, independent of the date when the decree
is issued. I will not venture to foretell when this will happen. Everything
will depend on a favorable market situation, on when the right moment arrives."
"As far I understand, you have a monopoly on the telecommunications
market. Why is privatization necessary?"
"Not quite so. We only hold a monopoly on low-profile services. Ukrtelekom
is a purely state-run enterprise which solely carries the burden of social
liabilities toward the public-sector and privileged categories of the population,
along with many other things. We have undertaken certain commitments, which
market operators always refuse to assume and thus cut off sufficiently
serious market segments, especially for high-profile services, such as
mobile, satellite, international communications, and Internet access. This
is one of the reasons why we should hasten to change the position of Ukrtelekom.
Besides, world practice shows that there still should be investments in
the basic telecommunications sector, so that other operators could gain
access to all communication networks on the basis of basic commutation
stations and relay systems. This requires investments, and privatization
is one of the best ways to attract them. It is the strategic investor that
can bring in new technologies and funds."
"And what about the low-profile services? Will they lose out with
privatization?"
"There is foreign experience here also. The state sets up a fund to
support the low-profile and unprofitable sub-industries at the expense
of allocations. What kind of allocations and where from is the state's
problem, not Ukrtelekom's. The state can solve the problem this year, as
well as a year or two later. Of course, I wish it would be earlier. Such
allocations are exclusively utilized for the loss-generating areas of work,
the so-called universal access of the population to all services. This
access loses money everywhere in the world and is made up for at the expense
of those operators who work on the market."







