ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012

NATIONAL COMMISSION FOR THE STATE REGULATION OF COMMUNICATIONS AND INFORMATIZATION

KYIV 2013

NATIONAL COMMISSION FOR THE STATE REGULATION OF COMMUNICATIONS AND INFORMATIZATION

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012

KYIV 2013 Content

Chairman’s message ...... 4

National Commission for the State Regulation of Communications and Informatization...... 5

1. Situation in the area of communications and informatization...... 6 1.1. Overall situation in the area of communication and informatization of Ukraine...... 7 1.2. Situation in the telecommunications and postal services markets...... 8 1.2.1. Overall situation and tendencies...... 8 1.2.2. Situation in the market of fixed telephony...... 10 1.2.3. Situation in the market of mobile communication...... 11 1.2.4. Situation in the broadband market...... 12 1.2.5. Situation in postal services market...... 15

1.3. Developments in information society and informatization area...... 16 1.3.1. General tendencies of the information society development as a priority trend of the state policy ��16 1.3.2. Key indicators of information society and informatization development...... 17 1.3.3. Main challenges for information society and informatization area and possible solutions ways to overcome them ��25 1.3.4. NCCIR initiatives in the informatization sector area...... 26

2 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2. NCCIR principal activity...... 28 2.1. NCCIR regulatory activity ...... 29 2.1.1. NCCIR legislative initiatives...... 31 2.1.2. Development and improvement of regulatory acts in the telecommunications area...... 33 2.1.3. Preparation of the draft legislative and regulatory acts in the informatization area ��37

2.2. Approximation of the legislation of Ukraine in the area of communications and informatization to the legislation of the European Union ��38 2.2.1. Extension of the NCCIR powers...... 38 2.2.2. Analysis of the telecommunications services markets ...... 39 2.2.3. Twinning Project...... 39

2.3. Registration and licensing...... 41 2.4. Radio frequency resource usage ...... 43 2.5. Numbering resource usage...... 45 2.6. Telecommunications networks interconnection...... 46 2.7. Tariff regulation and mutual settlements...... 47 2.8. Public consultations...... 50 2.9. Consumer rights protection...... 53 2.10. State supervision in the area of communications...... 55 2.11. International cooperation and European integration...... 59

3. Work support ...... 62 3.1. Organization structure...... 63 3.2. Staffing the state regulation in the communications and informatization area ��64 3.3. Documentary support and executive discipline control ...... 66 3.4. Operational expenses and budget revenues...... 67

4. Performance of the Public Enterprise “The Ukrainian State Centre of Radio Frequencies”...... 68 4.1. Performance of radio frequency assignment and issuance of the permissions for radio electronic facilities operation ��70 4.2. Import of radio electronic facilities and radiating devices ��72 4.3. Radio frequency monitoring ��73 4.4. Realization of technical control of telecommunications networks �� 74

5. Priority tasks of the NCCIR for 2013...... 76

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 3 Dear Ledies and Gentlemen!

THE MOST CONVINCING ATTRIBUTE OF THE MODERN WORLD IS REPRESENTED BY A HURRICANE OF TECHNOLOGICAL INNOVATIONS THAT FORMS A NEW WORLD VIEW OF SOCIETY AND A NEW LEVEL OF ITS EXISTENCE. NOW WE ARE UNDER QUITE DIFFERENT CONDITIONS COMPARED TO THOSE WE WERE UNDER TEN OR EVEN FIVE YEARS AGO. BY THIS TIME WE HAVE A SOCIETY THAT DEMANDS A DIFFERENT LEVEL OF SERVICES AND QUALITY OF POSSIBILITIES FROM THE INFORMATION AND COMMUNICATIONS SECTOR

Under present conditions communica- programmes, that will give a new im- tions appear to be a basic communica- pulse to the process of national econ- tor of a person with a person and with omy development and further transfer the outer world; it is a vital element to a new level of state management for ensuring his basic needs in health and building an innovation-based protection, security, well-being etc. economic system. The processes that take place in the sector are of global social phenom- To give an impulse to the develop- ena nature. More often the process ments in the area of communications of interaction between the state and and informatization in Ukraine NCCIR Petro Yatsuk, the citizen is ensured by means of ICT began implementing a number of Chairman of the NCCIR intermediation, and civil harmony in strategic initiatives aimed at providing the country and creation of precondi- the legal framework for the devel- tions for sustained economic growth opments in this area, infrastructure depends exactly on the stability of deployment, introduction of innova- functioning of the above and the tion services and new nation-wide development of the sector. projects implementation. NCCIR principal duty is to further the interests Today the Ukrainian market of in- of the Ukrainian people in relation to formation and communications that information and communications ser- had been formed within limited time vices of high quality by setting unified period is developed and dynamic rules, unified conditions for activity of enough to meet essential needs of all business entities in the market, as the country. However, its rapid growth well as formation of the competitive requires a continuous adjustment of market in which it is the consumer the current regulatory framework and who is a barometer of quality. efficient decisions that will assure formation of the competitive conditions Our aim is to create conditions under favorable for further development which by 2020 each citizen of Ukraine with due account for citizens and in any population center will be guar- country’s interests. anteed to have secure access of high quality to a wide range of services Performance outcomes of 2012 give supplied by means of up-to-date infor- evidence of the fact that the mar- mation and communications technolo- ket has accumulated the substantial gies. Today we have every reason and potential. NCCIR sees its mission in possibility to make these ambitious managing this potential and directing plans come true. it towards the implementation of economic reforms and initiatives of the The NCCIR Annual Report for 2012 is President, as well as of nation-wide brought forward to your attention.

4 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 National Commission for the State Regulation of Communications and Informatization

The National Commission for the licensing, authorisation, regulatory State Regulation of Communications and state supervision (control) author- and Informatization is a state colle- ity in the stated area. giate authority subordinated to the President of Ukraine and accountable Petro Yatsuk wwas appointed as the to the Verkhovna Rada of Ukraine. Chairman of the NCCIR under the Decree of the President of Ukraine The National Commission for the No.1068/2011 of 23 November 2011. State Regulation of Communications and Informatization (NCCIR) was On 16 December, 2011 established under the Decree of the Liudmyla Iezhova; President of Ukraine No.1067/2011 Iryna Polishchuk; of 23 November 2011 in pursu- Oleksandr Rechkalov; ance of the Law of Ukraine On Mikhail Serdyuk; Telecommunications. The Provisions Igor Syrotenko; on the NCCIR were approved by the Olena Ulasenko same Decree. were appointed as the Members of the NCCIR by the corresponding Decrees According to the Provisions the NCCIR of the President of Ukraine. is a state regulatory authority in the area of telecommunications, informatization, radio frequency resource usage and postal services provision. The NCCIR carries out the powers of

Oleksandr Rechkalov, Olena Ulasenko, Petro Yatsuk, Igor Syrotenko, Iryna Polishchuk, Mikhail Serdyuk, Liudmyla Iezhova

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 5 1 Situation in the area of communications and informatization 1.1 Overall situation in the area of communications and informatization of Ukraine

At the end of 2012 over 16.6 thousand Today the national market of communi- business entities of various forms cationi and informatization comprises: of ownership, where more than 240 ›› 2114 operators licensed for a cer- thousand people work, performed tain type of activity in the area of their activities in the area of commu- telecommunications; nications and informatization. They ›› 43.5% of the residents of Ukraine, account for 2% of total employed having access to the Internet; population of the state, whose activity ›› 35% of the households, having produces 4.6% of gross domestic broadband access to the Internet; product of the country, 3% of of ›› 1/5 of the Ukrainian households Ukraine-wide volume of investment in having access to cable TV services; the fixed capital stock. ›› almost complete coverage of the territory of the country with mobile In 2012 the revenues from services communication, with the informed provision in the area of communica- by telecommunications operators tions and informatization amounted level of penetration of 130.3% of to 23% or some 62 billion hrn. of the the total population of Ukraine. total revenues from services provision in Ukraine, and increased by 6.7% as compared to 2011.

70 Dynamics of revenues from services 9,7 7,8 provision in the area of communications 60 145,8% and informatization 4,6 5,5 3,8 in 2006-2012, billion hrn. 141,8% 50 137,1% 2,8 52,3 135,7% 50,3 47,4 40 1,9 46,1 46,3 121,8% 40 119,4% 125,0% 30 119,6% 33,5 115,3% 121,1%

100,4% 106,1% 10 102,4% 104,0%

2006 2007 2008 2009 2010 2011 2012

revenues from communications services provision

revenues from informatization services provision

Informatization,% till the previous year

communications,% till the previous year

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 7 1.2 Situation in the telecommunications and postal services markets

1.2.1 Overall situation and tendencIES 55 DYNAMICS OF REVENUES Dynamics of revenues from Communications sector revenues, billion hrn. In 2012 a steady tendency of recent provision of 52,3 years aimed at increasing revenues in communications 50 Growth rate,% the area of communications continued services in 50,3 to develop. In 2012 revenues from pro- 2008–2012, viding services in the area of commu- billion hrn. 47,4 104,0% 46,3 nications amounted to 52.3 billion hrn. 45 46,1 That is by 4% or 1990.4 million hrn. 102,4% 106,0% more as compared to the previous year. 100,4% 40 REVENUES DISTRIBUTION 2008 2009 2010 2011 2012

Revenues from telecommunications Communications sector revenues in 2011–2012, billion hrn. services provision in 2012 increased by Share of communication services revenues in the overall volume of revenues of the 3.8% and amounted to 48 billion hrn. as communications sector in 2011–2012, % compared to 2011. Herewith the income from postal services provision increased 1,0 1,0 by 6% and amounted to 3.3 billion hrn. 1,99% 1,91% 3,3 in 2012. 3,1 6,31% 6,16% As it can be seen from the diagrams, which demonstrate the developments in the communications sector in 2012 as compared to 2011, in terms of specific services there was an increase of revenues generally due to the revenues increased by 1.8 billion hrn. from provision of telecommunications services. 46,2 48,0 91,85% 91,78% The share of telecommunications ser- 2011 2012 vices revenues in the total volume of revenues in the area of communications telecommunication services postal services other services practically remained more or less at the same level of 2011 that is 91.8%, here- 35000 with the percentage of postal services Dynamics of revenues by various types of telecommunications 30000 amounts to 6.3%. 31553,8 services in 2011-2012, billion hrn. 25000 31027,9 DYNAMICS OF REVENUES BY VARIOUS TYPES OF 20000 2011 2012 TELECOMMUNICATIONS SERVICES 15000

Analysis revenues from provision of 10000 various types of communication ser- 5000 vices in 2012 evidences the following 6527,96976,5 4179,34963,4 315,0 356,5 3481,33019,3 4749,35401,6 tendencies: 0 ›› increase of revenues from telecom- Mobile Telephone Telephone Telephone Сomputer Other tele- munications services provision; city rural national (Internet) communication services

8 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.2. Situation in the telecommunications and postal services markets

›› increase of revenues from mobile affordability of mobile communication introduction of new radio technology services provision; the demand for the telecommunica- called “digital ultra-shortwave radio ›› increase of revenues from provi- tions services is constantly increasing, communication” within the bandwidths sion of broadband Internet access that at the same time leads to increase of 150-168.5 MHz, 410-430 MHz and services; of the number of broadband subscrib- 440-450 MHz under the principle of ›› increase of revenues from ers and the amount of profit that the selection of one of the available radio IP-Telephony services provision; countries receive from this economy technology base standards, estimated ›› increase of revenues from transmis- sector. In Ukraine due to slow modern- in the Plan for the Use of Radio sion and reception of TV and radio ization of current equipment switch- Frequency Resource, independently by programmes, radio services; ing to new technologies is occurring a customer of radio frequency resource ›› decrease of revenues from national slower compared to the developed by himself. The same approach for the and international telephone services countries mostly because of the lack base standard selection was suggested provision; of regulation of the issues on access of for the development of radio technol- ›› decrease of revenues from telegra- the telecommunications operators and ogies of “digital trunk radio commu- phy and wire broadcasting services providers to buildings, constructions of nication”, with additionally allocated provision; different ownership forms for construc- the radio-frequency bands within the ›› increase of revenues from postal tion, reconstruction and operation of bandwidth of 150-168.5 MHz. services provision. in-house distribution networks, as well as ineffective pricing for operators First of all the above technologies are Mobile, fixed-line and broadband (com- and providers services that in its turn considered as a switch of customers puter) communication services remain decreases their income. from analogue technologies to modern the main segments in the market of digital services and technologies. telecommunications services, common In September 2012 the amendments share of above segments amounted to were made to the Plan for the Use of For «radio relay communication» radio 94.4% in total income from telecommu- Radio Frequency Resource of Ukraine, technology the new radio-frequency nications services provision upon the approved by Decree of the Cabinet of bands in the range of 70 GHz/80 GHz results of 2012. Ministers of Ukraine No. 815 of 9 June, are allocated, allowing telecommunica- 2006, were adopted. The amendments tion operators to construct radio relay INTRODUCTION OF NEW were based on the NCCIR proposals systems of transmission over short TECHNOLOGIES AND PROSPECTS concerning the development and distances (up to 5 km) with speeds on FOR THEIR OPERATION IN THE introduction of modern radio communi- the order of GGbit/s. MARKET cationtechnologies in Ukraine. For the “satellite radio communica- The consumers’ demand for use of In particular, the NCCIR suggested tion” radio technology the regulatory information resources during recent years actively promotes the introduction of new technologies in the Radio Frequency band Public interest telecommunications networks of technology Ukraine. First of all it is the development of subscribers’ broadband access Digital ul- 150-168,5 MHz, Transition from analog to digital technology, with the use of modern technology tra-short- 413-430 MHz, principle of selection a base standard, new solutions: fiber-optic lines (fiber to wave radio 440-450 MHz services and benefits within the framework of the home, optics to the house, and communication one radio technology optics to the group of houses), passive optical network (хPON) technologies, Digital trunk- 150-168,5 MHz Transition from analog to digital technolo- wireless technologies of Wi-Fi, WI-Max ed radio gy, principle of selection a base standard, in access, ultra broadband radio access communication all radio frequency bands, new services and technologies. benefits within the framework of one radio technology The development of modern broadband multiservice transport network based Radio relay 70 GHz/80 GHz Ultra-high speed radio relay transmission lines on unified IP-protocols reaches the new communication of direct visibility to connect the base stations level, there will be a switch of cellular of cellular communication 3G/4G and replace- networks to 3G and next generation ment in urban air communications technologies in the framework of projects of long-term development of Satellite radio 20 GHz/30 GHz High-speed satellite Internet in every place of cellular communication of CDMA2000/ communication Ukraine CDMA EV-DO (UMB) standards, as well as of GSM/UMTS (LTE, Long Term Digital cellular 900 MHz, Improvement of regulatory conditions of GSM- Evolution) standards. GSM-900/1800/ 1800 MHz, 900/1800 network planning. UMTS radio 2100 MHz Implementation of new services based on the The emergence of new communications communication Home Node B architecture on the basis of standards influenced the development femtocells for UMTS networks of telecommunication market both Ultra-wideband 57-66 GHz Ultra-high speed transmission network for in the world and in Ukraine. Due to radio access personal and household use the introduction of new services and

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 9 1.2. Situation in the telecommunications and postal services markets

conditions of using the range of 14 GHz For the radio technology “digital cellu- ›› substitution of intercity and inter- are enhanced both for VSAT-terminals lar radio communication CDMA-800” its national communication services and for SNG-stations for collecting end-date (2016) has been exempted. by mobile services and calls via the news. Internet; Also the changes were made into the ›› promotion implementation of vari- Moreover, for this radio technology the following radio technologies: “amateur ous attractive user feature packages Ka-frequency band was additionally radio communication”, “amateur satel- and tariff plans by operators; allocated, that allows providing cheap lite radio communication”, “radio data ›› increase of customer’s demand for access to the Internet for the custom- transmission”. multimedia converged telecommuni- ers with an access speed for the end cation services. user of 40 Mbps for inbound channel Tendencies and problems and 10 Mbps for outbound channel in of development of The main challenges for development any place of Ukraine. The provision is telecommunication networks of telecommunication networks are: made for operation of VSAT-terminals of Ukraine ›› insufficient provision of the pop- without operation permits. ulation, enterprises, institutions The main tendencies of development of and organizations with broadband For the radio technology GSM- telecommunication networks were: telecommunication services; 900/1800/UMTS digital cellular radio ›› introduction of broadband Internet ›› Uneven provision with telecommu- communication the conditions of access services by fixed teleph- nication services and limited user operation of Pico BTS base stations ony operators that made the main access to publicly available tele- are determined, allowing operators alternative for transformation of communications services (especially to improve the efficiency of planning one’s own business and possibilities in rural, mountainous areas and their networks and provide customers of increasing efficiency of disbursed depressed regions); with new services of Home Node B investments made to develop their ›› Need for modernization of tele- architecture. own networks; communication networks of local ›› reduction of number of fixed teleph- connection. New radio technology “ultra-wideband ony service subscribers which is radio access” is implemented in the caused by distribution of use of the frequency bands of 57-66 GHz for high- other telecommunication services speed data transmission of information among the consumers, in particular between different devices over short mobile communication services, distances within the limits of premises. data transmission networks and Internet;

1.2.2 Situation in the market of fixed telephony

DYNAMICS OF REVENUES million hrn., which was mainly due to Market performance — number increase in the tariffs for public tele- of lines, subscribers In 2012 revenues from providing fixed communications services in 2012. telephony services provision to 8339.2 Number of basic telephone sets in million hrn., that is by 4.6% more as Revenues from national and inter- 2012 decreased by 416.6 thousand and compared to arelevant figure of the national communication services as amounted to 11741.1 thousand sets, previous year. compared to 2011 decreased by 13.3% including the urban telephone network mainly due to decrease in consumption that decreased by 343.8 thousand sets At the same time, revenues from local volume through substitution by mobile and amounted to 10219.8 thousand telephony services provision increased communication services and making sets, and the rural telephone network by 18.4% and amounted to 5319.9 calls via Internet by 72.8 thousand sets and amounted

Dynamics of income from provision of fixed communication Number of basic telephone set services in 2008-2012, million hrn. in 2011-2012, thousand

10000 12500 2011 9463,4 12157,7 11741,1 10000 10563,6 10219,8 2012 9000 8812,5 7500 8339,2 8206,1 7975,6 5000 8000 93,1% -3,4% -3,3% -4,6% 104,6% 93,1% 97,2% 2500 1594,1 1521,3 7000 0 2008 2009 2010 2011 2012 Basic telephone sets, urban telephone rural telephone total network network

10 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.2. Situation in the telecommunications and postal services markets

to 1521.3 thousand sets, that makes amounted to 25.7 per 100 inhabitants regions of Ukraine. decreases by 3.3% and 4.6% less as as compared to the index of 26.7 per compared to analogical data of 2011. 100 inhabitants in 2011. The highest penetration level of provision with telephone sets is in Kyiv — The level of penetration and The density level of telephone sets in 55.1, as well as in Odessa Region density by regions different regions of Ukraine is spotty — 59.9, Zaporizhzhia Region— 30.1, evidencing of unequal possibilities of Dnipropetrovsk Region — 29.2 and The density index of fixed communi- access to universal telecommunica- the lowest one is in Trans- Carpathian cation networks in Ukraine in 2012 tion services for people from different Region — 14.8.

1.2.3 Situation in the market of mobile communication

DENAMICS OF REVENUES SIM-cards of different operators. Mobile telephony has passed into However, there are still the residents the category of the most affordable In 2012 revenues from mobile ser- having no mobile phone in Ukraine, services, and to a large extent due vices provision increased by 1.7% as mainly they are children and seniors. to lower costs for deployment and compared to 2011 and amounted to maintenance of telecommunication 31553.8 million hrn. that equals to One of the main reasons of buying networks, in comparison with fixed 65.8% in the total volume of revenue in several SIM-cards is the substantial dif- communication. the telecommunications sector. ference between the tariffs for on-net calls and off-net calls. This led to the Nowadays the number of mobile MARKET PERFORMANCE – NUMBER fact that nearly 94% of mobile telephone terminals in Ukraine is more OF SUBSCRIBERS AND LEVEL OF than 2.5 times higher than the number PENETRATION outgoing traffic falls on on-net calls. of fixed-line telephones; herewith the number of telephones that are running As of 31 December 2012 the mobile Free or cheap on-net calls are a quite under operating systems (smartphones) operators subscriptions amounted to attractive tool for an operator in the is rapidly increasing. Part of smart- 59343.7 thousand of subscribers that struggle for increasing the number of phones owners and communicators increased by 6.8% compared as of the subscriptions, since they do not incur that were registered in telecommuni- end of 2011. interconnection costs. cation networks of mobile (cellular) operators during the year increased The overall level of penetration of Such situation does not promote devel- approximately by 35 — 40% and mobile communication in Ukraine opment of the sector and does not exceeded 6 million units. is 130.3%. At the same time in stimulate efficient competition among three regions of Ukraine this figure operators since subscribers’ off-net The above in its turn has created condi- is lower than 100%, in particular, calls are limited due to their high cost. tions for the growth of public demand in Khmelnitsky Region it is 89.9%, for services with use of high-speed in Ternopil Region — 90.9% and in TECHNOLOGIES FOR MOBILE broadband radio access technologies Kirovohrad Region — 96.4%. SERVICES PROVISION such as UMTS, CDMA, andWiMAXand to a significant increase in the volumes of The situation has emerged when the The market of telecommunication ser- mobile Internet traffic. number of mobile subscriptions is vices with the operation of radio tech- higher than the number of population nologies is one of the most intensively in country. This situation refers to developing segments of the communi- the fact that one person has several cation sector.

Dynamics of revenues from mobile services provision Dynamics of mobile operators’ subscriptions changes and level in 2008-2012, million hrn. of mobile penetration in 2008-2012, million.

32000 31553,8 60 59,3 31027,9 58 31000 Penetration level 101,7% 56 121,8% 30000 55,7 29629,5 55,3 55,6 107,6% 54 121,8% 120,4% 53,9 29000 28837,9 120,1% 28481,0 52 117,5% 101,3% 96,1% 28000 50 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 11 1.2. Situation in the telecommunications and postal services markets

By means of UMTS 3G cellular com- Business entities that have a valid license for provision of munication technology it became mobile cellular services possible for subscribers to receive data transmission services and Internet access with speed up to 7.2 Mbps in No. Radio technology (type of Business entities all administrative centers of Ukraine. communication) Thus, mobile subscribers who has a high-speed Internet access can use 1 Cellular radio communication International telecommunications a wide range of multimedia services CDMA-800 LLC (high-quality video, games, large files ASTELIT LLC download, etc.). C-S-T Invest PJSC Telesystems of Ukraine PJSC For operators who provide services in GSM standard, switch to UMTS is not of 2 Cellular radio communication Kyivstar PJSC significant technical problem due to the GSM-1800 Golden Telecom LLC possibility of preserving a substantial ASTELIT LLC part of existing infrastructure. MTS Ukraine PJSC

The telecommunications networks built 3 Cellular radio communication Kyivstar PJSC with the use of WiMAX technology GSM-900 MTS Ukraine PJSC continue to deploy, which provides ASTELIT LLC fixed and mobile wireless access to the Internet. Insignificant increase in 4 Cellular radio communication Е-GSM Kyivstar PJSC the number of end users is observed at the regional and district centers 5 Cellular radio communication MTS Ukraine PJSC where regional telecommunication CDMA-450 operators work. This is due to the use of equipment that requires considera- 6 Cellular radio communication TriMob LLC ble financial costs for development of IMT-2000 (UMTS) Ukrtelecom PJSC infrastructure networks, as it involves the presence of numerous spots of access. Thus, the development of Taking into account steady growth of in the direction to terminal and 172.8 WIMAX continues in Ukraine, although Internet–traffic share as compared to Mbps — in the reverse direction. its growth rates are not great. voice services, which requires funda- mentally new speeds of mobile Internet At the same time, the further imple- During the year the telecommunication access and training by operators their mentation of promising radio technolo- network resources, using technologies own networks to satisfy the growing gies in Ukraine requires additional radio of CDMA EV-DO, have significantly needs of consumers, LTE technology frequency spectrum, which is currently increased. Interest in the development still remains the promising technology almost exhausted in commercially of this technology from the mar- for the telecommunication market of attractive frequency bands. ket players is a sign of further rapid Ukraine. The mentioned technology, development of this technology on the based on IP-technologies, envisages a telecommunications market in Ukraine. theoretical bandwidth of 326.4 Mbps

1.2.4 Situation in the broadband market

Broadband access is the access to the Unfortunately, in Ukraine the legal Subscriber base Internet at a high speed. While the minimum speed limit for broadband switched access has bitrate restric- access has not yet been defined. As a By the end of 2012, according to the tions of 56 kbit/s and fully covers the result, while filling in statistical forms, data of the statistic inquiry company phone line, the broadband technologies each of the operators, who provide this iKS-Consulting, the number of subscrib- provide faster data transfer and do not information, independently determine ers of fixed broadband Internet access monopolize the phone line. the maximum speed limit of broadband (corporate and individual) in Ukraine access. reached 6.7 million subscribers, 5.97 The International Telecommunication million customers of which are home Union (hereinafter — ITU) defined the Dynamics of income users (households). The penetration lowest speed limit for broadband ac- of broadband access to households of cess at 256 kbit/s. In addition to a high The amount of income from provision Ukraine in 2012 reached 35% (accord- speed, the broadband access provides a of broadband (computer) connection ing to the State Statistics Service of continuous connection to the Internet services in 2012 as compared to the Ukraine there were 16.9 million house- (without the need for switched connec- same period last year increased by holds at the end of 2012). tion) and the so-called “two-way” con- 226.8 million hrn. and totals to 4180.8 nection, i.e. a possibility both to receive million hrn., their share in the total in- (“download”) and transfer (“upload”) come of the telecommunications sector information at high speeds. amounts to 8.7%.

12 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.2. Situation in the telecommunications and postal services markets

In 2012 as compared to 2011 there was Broadband service technology Mobile networks, whose launch is fast- an increase in the number of subscrib- (optic, wire, wireless) er and less costly, provide the growth ers of fixed broadband Internet access of number of mobile broadband access by 0.7 million subscribers, including Today in Ukraine the broadband net- subscribers. A good example is the home users (households) by 0.67 mil- work access services are provided by experience of such operators as MTS lion subscribers. means of: Ukraine, International telecommunica- ›› Fiber-optic communication lines tions, People-net, who provide access Density of business entities — FTTx; by means of advanced technologies that provide broadband ›› Copper lines — xDSL; CDMA, and TryMob according to UMTS Internet access in the regions ›› Coaxial (TV) cable — DOCSIS; technology. ›› Satellite channels — VSAT; During 2012 there was a tendency of ›› Wireless Internet access — Wi-Fi, As for the technology WIMAX, sev- increase of operators and providers that WiMAH, UMTS, CDMA-EVDO eral operators in Ukraine were given provide broadband access services. RevA (B). licenses to provide services WIMAX, including: Also there is a slight increase of The highest level of income is observed ›› MMDS-Ukraine (frequency range of operators, and providers that render in the case of providing broadband ser- 2.5 — 2.7 GHz); broadband access services using ra- vices using fiber-optic communications ›› Intelligent Telecommunications dio-frequency resource. technology FTTx. (frequency range of 2.3 GHz); ›› Ukrainian newest technologies (frequency range of 3.4 — 3.6 GHz).

Telecommunication operators and providers At present, Intelligent Telecommunications Company No. Type of activity Increased in Overall as of launched into operation the WIMAX 2012 31.12.2012 network in several regions of Ukraine. The company provides services under 1. Telecommunications operators, 400 2114 the trademark Giraffe in 16 cities of including: Ukraine, including 13 regional centers. However, this is only a spot coverage. operators which provide Internet 59 312 services using RFR The network Ukrainian High Technologies LLC (under the brand operators which provide Internet 248 358 name FreshTel) is developing dynami- services without RFR cally. Now FreshTel is available practically everywhere in Kyiv, in many cities 2. Telecommunications operators, 197 856 of Kyiv region, and in some localities of including: Zhytomyr, Lviv, Chernihiv, Chernivtsi, Ivano-Frankivsk, Trans-Carpathian, operators which provide Internet 195 812 Mykolayiv, Donetsk, Dnipropetrovs’k, services Sumy, Rivne, Poltava, Kherson regions.

Dynamics of income from providing Internet access and Dynamics of growth of number of subscribers of fixed broadband services in 2009-2012, mln. hrn. broadband access in 2009-2012

Income from providing Internet access Subscribers, million

Including broadband access Including private subscribers (households) 5000 4673,1 8 % of penetration into the households 80% 4260,0 4180,8 3999,9 3954,0 7 6,7 70% 6,0 6,0 3515,5 109.7% 6 60% 112.1% 5,3 2864,8 2680,5 105.7% 5 50% 132.6% 2500 112.1% 4 3,6 40% 3,0 3 30% 131,2% 2,3 35,0% 1,9 2 31,0% 20% 1 18,0% 10% 11,2% 0 0 0% 2009 2010 2011 2012 2009 2010 2011 2012

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 13 1.2. Situation in the telecommunications and postal services markets

Thus, the development of WIMAX in According to the data, provided by ITU types of ownership during the con- Ukraine continues, although the growth “Measuring the Information Society struction and installation works on rates are not high. 2012”, Ukraine ranks 67th, and moved creation of infrastructure of access from the 65th position in 2011. to the Internet. The modern high speed networks are ›› Absence of mechanism of shared organized by combination of trunk The reasons for decline in the rating access to the Internet. lines with access networks, the “last are: mile” solutions. Promising and econom- ›› A low number of mobile broadband Deterrent factors of market develop- ically acceptable directions of fixed access subscribers — 5% of the ment of mobile broadband access are: telecommunication networks are the total population (poor development ›› Unfavorable macroeconomic construction of modern fiber — optic and poor number of subscribers situation in the country, which is communication lines using DWDM and of the third and fourth generation primarily expressed in reduction of CWDM technology, batch transmis- networks); purchasing power of the population. sion at the level of transport network ›› A small number of fixed broadband ›› Lack of opportunities for the devel- and the development of broadband access subscribers — 14% of the opment of UMTS-networks. networks using optical FTTx tech- total population and the lack of ›› Overload of working networks in cit- nology (including passive, PON) and interest of providers to go beyond ies and the reduction of the quality radio technologies — both the access the city borders, since large invest- of service provision. technologies for the last meters in the ments are needed in infrastructure areas of high concentration of users development for the reason of low To solve these problems NCCIR (Wi-Fi), and fixed solutions of WiMAH income of each user. provides: (LTE in the perspective) in remote areas 1. Inclusion of the services of Internet or in cases where their deployment is Problems of development of access at a speed of 2 MB/s to the faster and cheaper compared to wired broadband access market and list of public telecommunications lines. ways to solve them services. 2. Creating a Foundation of public- Ukraine’s place in the world Lack of penetration of fixed broadband ly available telecommunications according to key indicators of access is related primarily to the large services in order to stimulate the broadband access market territory of the country, different levels development of telecommunications of demand in rural and urban areas. networks to provide broadband In 2011 Ukraine entered the top ten access in rural areas and high-cost countries having the highest speed of The main problems of broadband ac- regions. Internet access, and first entered the cess market include: 3. Development and adoption of regu- ranking of subscribers of the branch ›› Lack of development of telecommu- lations that help reduce administra- organization FTTH Council Europe. nications infrastructure in rural and tive barriers to the development of According to the latest figures of the depressed regions of Ukraine. networks, building the infrastructure organization, announced at the World ›› Delay in competition for frequencies of access networks. Forum of broadband technologies, for 3G mobile networks. 4. Developing in the telecommunica- which was held in Paris in September ›› Availability of organizational bar- tions sector, together with central this year, Ukraine was ranked 16th in riers, large financial losses in the executive bodies, of the regulatory, the world in the development of FTTH construction of infrastructure of legal and technical documents that networks. access to the Internet. stimulate development of broad- ›› Availability of legal barriers in band access infrastructure. access to housing operators of all

20 Regional distribution of business entities providing Internet access services without the use of radio frequency resource

As of 31.12.2012 in 2012 15 Regional distribution of business entities providing Internet access services using radio-frequency resource

As of 31.12.2012 in 2012 10

0 Kyiv region Donetsk Kharkiv Zaporizhia Poltava Zhytomyr Sumy Khmelnytskyy Trans-Carpathian Kirovohrad Ternopil Chernihiv Crimea Kyiv Dnipropetrovs’k Odesa Luhansk Lviv Vinnytsia Mykolayiv Kherson Volyn Ivano-Frankivsk Rivne Cherkasy Chernivtsi Sevastopol

14 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.2. Situation in the telecommunications and postal services markets 1.2.5 Situation in the postal services market

The postal sector in Ukraine is undergo- Number of operators, density ing some changes under the influence in the regions of the economic and financial situation in the country as well as in the world Stated services in 2012 were provided and is characterized by reduction in by Ukrposhta USEP through the net- written correspondence volume and work, which consists of 14.7 thousand extension of activities in the segments units, particularly in rural areas the such as e-commerce, financial services number is 11 thousand. The company and the development of international employs more than 100 thousand logistics. employees, of which about 44 thousand are postmen. The total length At the same time, the process of market of postal routes is more than 356.0 continues liberalization, leading to thousand km. a permanent increase in the number of providers of postal and courier USEP Ukrposhta has formed and communications and the scope of their uses one of the densest networks of services. Sustainable development of universal postal services in the world. the industry reflects in the growth in This can be evidenced by the fact that 2012 of the income of providing ser- 88% of the population of Ukraine have vices, and consistent with the increase access to the post offices, located at a of the sector share in relation to tele- distance under 3 km from them, and communications services in the area of 99% of individuals receive mail at their communication. place of residence.

Dynamics of income USEP Ukrposhta performs its activities within the framework of imple- An indicator of the level of devel- mentation of the National Program opment of the postal services is the of Informatization of Ukraine. It is amount of income of the enterprises associated with the creation at the post for the consumption of postal services. offices of the internet access outlets This figure is considerably differenti- to ensure public access to the global ated in the regions. According to the information network. income from consumption of postal services the following groups of Also, Ukraine successfully carries out regions of Ukraine are distinguished: the activities of providing postal ser- 1. regions with very high consumption vices for special purposes (courier and of postal services — Kyiv, Donetsk, special communications). Such services Kharkiv, Dnipropetrovs’k, Lviv, Odesa, are provided to certain categories of Luhansk and Crimea; people by the State Courier Service 2. regions with high consumption of Ukraine and the State Enterprise of of postal services — Zaporizhia, special communications. Vinnytsia, Poltava, Zhytomyr, Chernihiv, Cherkasy, Khmelnytskyy, In addition, the postal services are Sumy region; provided by operators of private 3. regions of low consumption of ownership, who have received licenses. postal services — Ivano-Frankivsk, Currently in Ukraine there are 32 opera- Rivne, Kirovohrad, Ternopil, Trans- tors of non-government ownership. Carpathian, Donetsk, Kherson, Mykolayiv and Chernivtsi regions.

Such regional distribution may be explained by population number and the level of socio-economic development.

In 2012 the income of postal services comprised $3.3 billion that is 6% higher than in 2011.

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 15 1.3 Developments in information society and informatization area

1.3.1 G eneral tendencies of the information society development as a priority trend of the state policy

Formation of the Information Society According to the results of joint institutions and organizations, in Ukraine becomes a matter of public assessment by the relevant European archives and libraries, museums and concern, as the economic, political institutions it was noted that Ukraine other cultural institutions; and social potential of the country is has made a significant step in the area ›› expanding opportunities for access directly dependent on information and of information society because NCCIR in the prescribed manner to other intellectual potential of its people. The received an additional mandate for national information resources; state should regulate the process of regulation of informatization. ›› creation in Ukraine of appropriate formation of an information society. conditions for the development of And on the one hand, it should create Among the priorities for the devel- the software industry (primarily talk- conditions for free access of its citizens opment of the information society ing about tax breaks for businesses to information, while on the other hand in Ukraine should be considered the with software development). it should protect their privacy from following: unauthorized interference. ›› development of a mechanism to ensure the ability of the state appa- The areas of development of informa- ratus to examine the processes of tion society and informatization are formation of information society in governed by the following basic laws an integrated manner and set up a of Ukraine “On the Concept of National political will in the country to imple- Informatization Program”, “On the ment the National Programme for National Program Information”, “On Information Society Development in the Basic Principles of the Information Ukraine. To use on a wider scale in Society in Ukraine in 2007-2015”, “On the practice of public administration electronic documents and electronic a program-based approach as an document management», “On elec- efficient mechanism to implement tronic digital signature”, “On Personal national information policy; Data Protection”, “On access to public ›› creation of new network structures information”. and technologies, based on international standards; Ensuring efficient development of -in ›› organization and deployment of formation society, designed to enhance broad socio-political propaganda national competitiveness through supporting the country’s transition widespread adoption of information to the information society; and communication technology, human ›› expansion and improvement of development, improving living stand- providing in the Internet the ards, promote the establishment of an objective political, economic, legal, open, democratic society is a priority environmental, scientific, techni- of state policy, as stated in the Annual cal, cultural and other information Message of the President of Ukraine about Ukraine, especially the one to the Verkhovna Rada of Ukraine that is formed in the governmental “Modernization of Ukraine is our strate- authorities and local authorities, gic choice”. educational institutions, research

16 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area 1.3.2 Key indicators of information society and informatization development

Rating of Ukraine according the previous rating position 15 posi- to the indexes concerning tions up. Its ranking in 2012 was one of informatization and the best for the last 7 years. communication technologies (according to WEF) In 2012, almost all indicators for a subindex of technological readiness As reported by the World Economic improved, in particular, the following: Forum in Davos (Switzerland), accord- “Level of development of technologies” ing to the report “Global report on the (2 positions up), “Foreign Investment development of information technology and Technology Transfer” (15 positions 2012: Life in a hyperconnected world”, up), “Internet users” (4 positions up). and according to the information as of The scope of services provided by September 2012 of the analytic group The analysis of the competitiveness of companies in the area of information of the World Economic Forum (World Ukraine, conducted by the “Effective Economic Forum), despite the crisis Management” Foundation in collab- 10,0 phenomena in the global economy, oration with the World Economic +25% Ukraine’s rating according to the indica- Forum shows that relating to the key 7,5 tors pertaining to information and com- components of competitiveness of the munication technologies in comparison national economy, which influence the with the total number of countries has development of information society in 5,0 a positive dynamics and comprises: Ukraine, there is unevenness in the ICT ›› Global Competitiveness Index (WEF development in the regions. 2,5 Global Competitiveness Index), 7,8 9,7 in 2012-2013 it was ranked 73rd The analysis of the competitiveness billion hrn. billion hrn. out of 144 countries, in 2011-2012 of Ukraine’s regions in 2012 showed 0 it was ranked 82nd out of 142 that in comparison with 2011 year 2011 2012 countries, and in 2010-2011 it was five leaders has not changed: Kyiv ranked 89 out of 139 countries; continues holding a leading position The structure of the scope of services ›› Technological readiness index (WEF in the ranking, followed by Kharkiv, sold in the area of information Technological Readiness Index), in Dnipropetrovs’k, Donetsk and Kyiv 2012-2013 it was ranked 81 out of regions. 64,1 559,4 144 countries, in 2011-2012 it was 0,7% 5,8% ranked 82 out of 142 countries and Outsiders are Kirovohrad (26th position) 2308,7 in 2010-2011 it was ranked 83 out and Kherson region (27th position). It 1633,2 23,8% of 139 countries; should also be noted that the Luhansk 16,8% ›› Networked Readiness Index (WEF region worsened its ranking by 7 posi- Networked Readiness Index), in tions and was ranked the 20th. 2011-2012 it was ranked 75 out of 1227,5 142 countries (90th rating position In Ukraine there is a significant gap 12,6% in 2010 — 2011 respectively out of between the rates in regions for the 138 countries); technological readiness component. 3922,3 ›› UN electronic Government Index Thus, the top five included Kyiv, 40,4% 2012 (UN e-Government Index), Kharkiv, Odessa, Dnipropetrovs’k and in 2011-2012 it was ranked 68 Donetsk region. Kyiv is far ahead of the out of 193 countries (54th rating other regions, especially in terms of position in 2010 — 2011 out of 192 ICT use. The worst positions belong to informatization consulting 2308.7 countries). Rivne region. mln hrn, 23.8%

At the beginning of 2012 Ukraine In the regions, there is a significant software development and managed to improve its position for the imbalance on the assessments in terms consulting 3922.3 mln hrn., 40.4% following components of competitive- of efficiency of application of ICT in the ness: 112th rating position (20 scores) public sector and business. However, data processing 1227.5 mln hrn, for “macroeconomic stability”, 131st the business with varying degrees of 12.6% rating position (3 scores) for “state of success using ICT to create new busi- public and private institutions”, 116th ness and organizational models and is activity connected with data bases rating position (3 scores) for “efficiency currently a locomotive of ICT use in the 1633.2 mln hrn., 16.8% of financial markets”, in addition, in the country. ranking of countries in the Networked repair and maintenance of office Readiness Index, 2011-2012, Ukraine and computer equipment 559.4 mln was ranked 75th, having moved from hrn, 5.8%

other activity in informatization sector 64.1 mln hrn, 0.7%

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 17 1.3. Developments in information society and informatization area

Dynamics of the main amounted to $497.8 million. sector at the state authorities; absence indicators of the in the national standardization plans, informatization sector New information technologies now starting from 2010, of the object of play a dominant role in the market of standardization of IT; long terms of According to the State Statistics Service information tools and products and in standards development by the special- for the year 2011 the share of the many other areas of business and indus- ists of Technical Committees till their IT sector in GDP totaled 0.9% for 9 try. Dynamics of development of new approval and release (about 4 years), months, in 2012 it totaled to 1%. information technologies leads to the which is extremely unacceptable for need of constant update and introduc- dynamic development of the IT sector. In 2012 the scope of information sector tion of new standards. Otherwise, there services in total scope of the service is a manifestation of “double standards”, Therefore, one of the ways to solve this industry amounted to 3.27% or 9.7 bil- some of which are recognized by stand- problem may be determining of the IT lion hrn. (increase by 25% as compared ards bodies and there are formal, others sector in the national standardization as to 2011). are actually being unrecognized as a high priority area of standardization. official documents, which is a problem Within the scope of the services sold, of standardization of the IT sector. Trends in the development of 81% were the following services: the IT market ›› informatization consulting (23.8%); Today there are 26 990 standards in ›› software development and consult- Ukraine, 521 of which are effective in According to experts of the IT market in ing in this area (40.4%); the IT sector. In addition, in the IT sec- Ukraine (representatives of companies ›› activities related to databases tor 137 All-Union State standards of the SITRONICS IT Ukraine, De Novo, Inkom, (16.8%) former USSR are effective. RIM2000, SAP Ukraine, HR-holding ANCOR Ukraine) the development of Investments in the fixed assets from In Ukraine, the number of standards of IT-services market in Ukraine depends the activities in informatization area for the IT sector accounts for 1.93% of the on many external factors, economic 9 months in 2012 amounted to 428.5 total state standards, while in other conditions, foreign investment, public million hrn., accounting for 126.1% of countries this share exceeds 10% (for and legislative policy in business and the same period in 2011 and 0.2% of comparison, last year the figure was IT, on the condition of financial sector, total investments. about 2%, as of 1998 it was about 4%). the debt burden on the state and the corporate sector. Its volume in 2013 Disbursed (used) capital investment in In 2011-2012 54 standards of the was estimated by the respondents at software and database comprise 2.4 Ukrainian national standardization $320 million — a little less than 9% of billion hrn, accounting for 42.3% of system (DSTU) came into force in the the total IT market, which totals to $3.6 investments in intangible assets and information technology area, in 2012 billion. In our country traditionally the 1.33% of the total cultivated capital the development of 45 DSTU shall be lion’s share of the money falls on hard- investment by types of assets. completed and they shall be submitted ware solutions: nearly 79% of software for approval. that is more than 12%. According to the State Statistics Service, in 2012 the Ukrainian IT The main problems of standardization The change of volume and structure of companies exported computer services in the field of IT, in the opinion of the the market is possible in the process of for the value of $794.4 million. This is Technical Committee for Standardization solving a number of “sore” points of the 49.3% more than the previous year. At “Information Technology” are: lack of industry: issuing licenses for the new the same time, the import of com- comprehensive coverage of standard- communication standards (3G or LTE), puter services in 2012 grew by 22.4% ization facilities for IT; lack of budget tightening control over pirated software, to $296.7 million. Thus, the surplus financing of standardization in the IT realization of the postponed IT-projects of the state.

Volumes of IT services export Volumes of IT services import Today the technology of “cloud com- 1,2 6 0,4 5 puting” is rapidly evolving in the world. 5,9% 1,20 At the Ukrainian market in the near 4,4% future the experts predict the develop- 0,3 0,9 0,32 ment of technology “cloud computing”, 3,7% 0,29 information security systems, transfer 0,79 0,6 3,5% 3 0,2 0,23 2,5 of functions of service and support to outsourcing, increasing demand for 0,48 outstaffing; mobility system. 0,3 0,1 The most promising and favorable 0 0 0 0 trends for further development of IT 2011 2012 2013 2011 2012 2013 services will be the ones associated прогноз прогноз with outsourcing and system inte- Volumes of IT services export, Volumes of import of IT services, gration. First and foremost it is the $ billion $ billion introduction of ERP and CRM-systems; there is a noticeable tendency of growth including% to a general volume including% to a general volume of hosting services. of exported services of imported services Outsourcing demonstrates positive

18 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area dynamics. The tendency of growth in grid technologies will have in the short vocational schools have their own web this segment became sustainable in term, namely in the next three years, a sites, 50 percent of vocational schools 2012 and will continue to affect the growing influence on the development actively use local networks in training market in 2013. Alongside with out- of information technologies in Ukraine. and production, and in administrative sourcing, outstaffing will continue its and management processes. growth. According to IDC company’s forecast for December 2012 the volume of data gen- According to Ministry of Education and No less popular than before will be erated and consumed in the world dur- Science, Youth and Sports of Ukraine, IT-consulting. In the market an audit ing three years will grow approximately a national figure of mastering ICT by of systems and optimization of the by 2.5 times. The cost of their mainte- the teaching staff totals 99.6%, in 19 processes within IT are in demand. As nance per unit of volume will decrease regions it equals 100%. before the issues of information security at least by half, but overall investment remain relevant. in storage will increase by 20%. Despite Situation of Ukrainian the slower growth of the domestic IT Internet segment Also the experts note the tendency infrastructure, this process will probably of increasing interest in outsourcing touch on Ukraine. According to the same State of development of the Ukrainian of internal IT functions. The volume forecast for the year 2016, as a result of segment of the Internet is character- of vacancies increased in 2011-2012 accelerated growth the investments of ized by the following figures: and the year 2013 promises not to be the developing countries in e-infrastruc- ›› number of Internet users; an exception. Quite possibly the trend ture will catch up with those of the de- ›› degree of use of broadband of increasing interest on the part of veloped countries. One can expect that Internet access; IT professionals in labor migration to even in the state bodies due to gradual ›› market size and growth. Western Europe, the U.S. and Canada but irreversible progress of electronic will persist. In addition, the increase in documents flow the opportunity and According to the Internet Association of counter-offers to skilled IT professionals need for analytical processing of large Ukraine at the end of 2012 in Ukraine from current employers is expected, in volumes of collected data and infor- there were up to 19.7 million regular case they are ready to change jobs. mation retrieval will arise. Solving such Internet users among the population problems without parallel and distribut- aged over 15 years. By estimate of Mind The studies of IDC analysts show that a ed computation is impossible. Factum group the penetration rate of top priority for businesses today is the the Internet in Ukraine at the end of technologies for storage and manage- State of computerization of 2012 amounts to 43.5%. ment of data. It may be accounted for society by a constant increase in the volume of The rate of broadband access pene- information. One of the major trends of Information technologies cover virtually tration into the households in Ukraine the IT-market in the corporate sector all areas of modern society in Ukraine: reached 35% in 2012. In this case, the will be mobile and cloud technologies. government, financial and credit sector, all-European rate of broadband access Mobile business applications allow information services for business, sci- to the Internet for the population solving important problems and making ence, education and others. amounts to about 65% (by 2020 it decisions at any point in the globe as should be 75%). effectively as in the workplace. Cloud According to the State Statistics Service model helps to save on IT, reducing of Ukraine there is one computer per 3 According to statistical research of capital costs and operating costs. employees, 86.2% of companies have iKS-Consulting company the number of access to the Internet, 17% of workers mobile Internet subscribers in Ukraine In 2013, the expected extraordinary in enterprises regularly use a computer comprises 14.1 million people. Thus, demand for industry-specific PaaS connected to the Internet, and 36.4% the penetration rate of mobile Internet industry-specific applications (popular of businesses have a website or home can be considered satisfactory. platforms — such as services), they are page in the Internet. used in the sectors of financial services, According to the type of locality 52% of healthcare and the sector of intelligent The level of provision of secondary ed- net users reside in cities with popula- energy systems. ucational establishments of І-ІІІ levels tions over 100 thousand people, 6% with computer sets is 87.2% (up to 91% live in the cities with a population up Despite predictions of minimum use of urban schools, up to 73% rural schools). to 100 thousand people, 23% live in “cloud computing” by a wide range of cities with a population up to 50 thou- Ukrainian users, their obvious advan- The indicator of the number of stu- sand people, 19% in rural areas. tages stimulate integrators of different dents per one computer in 2011 was levels to build the infrastructure that 27 students. At present, this figure is In regional terms, according to the will provide a gradual migration of 25 students (in Europe and the U.S. on State Statistics Service during 9 months existing solutions to the model of “cloud average there are 5-7 students per one in 2012 the largest number of Internet computing”. It is possible to partially PC). subscribers was in Kyiv city (32.7%), accelerate those trends through the Odessa region (17.6%), and Donetsk creation of e-business ecosystem, which In vocational-technical schools (VTS) region. (6.7%), Dnipropetrovs’k region will reduce the need for paper docu- there are 28 thousand units of new (4.8%), Lviv region (4.3%) and Kharkiv ments and their appropriate sharing. generation computer devices (one region (3.4%). Outsiders in the devel- computer per 13 students). Connected opment of the Internet (less than 1%) The dynamics for the development of to the Internet are 868 vocational remain Rivne region, Zhytomyr region, high-performance systems in Ukraine schools, representing 99% of the total Trans-Carpathian region, Chernivtsi and in the world shows that cluster and number of vocational schools. 80% of region, Kirovohrad region, Sevastopol

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 19 1.3. Developments in information society and informatization area region, other regions (less than 3%) Ukrainians still mainly use the Internet Most of the jobs relate to software having the lowest number of subscrib- on their home desktop computers (62% developers, they are the most sought ers compared to the rest of areas. of the owners of desktops). On the after candidates not only in this pro- second place are home laptops (29%), fessional sector, but also on the labor sector on the Internet users in the re- on the third place are cell phones and market in general. In the field of IT the gions of Ukraine as of December 2012 smart phones (with their help, 13% of lowest activity level of the candidates evidences a significant bias in distribu- users access the Internet). is observed. The greatest shortage of tion of the Internet — audience in favor IT-specialists was felt at the beginning of large cities such as Kyiv (41.8%), Dynamics of the labor market of the year, by the end of the year the Dnipropetrovs’k (16.1%), Donetsk figures in informatization situation somewhat improved. (6.7%), Kharkiv (6.0%), and Lviv (5.2%). sector, production potential of ICT sector According to the Ministry of Social According to the Ukrainian Post State Policy the number of job vacancies in Enterprise Ukrposhta in 2012, the ІInformation technology is the key the IT sector submitted by employers number of post offices connected to the area of the labor market in Ukraine. to employment service in the first half Internet was 2110, which accounted for Programmers, developers, system of 2012 amounted to 2126 positions, 15% of the total number of post offices administrators today are the most comprising 0.3% of the total unem- and compared to 2011 increased by demanded professionals. For some ployed population, and did not change 1%. The number of points of common specialties there may be up to 5 open compared to the same period in 2011. Internet access at post offices in 2012 vacancies per specialist. The most popular professions in the was 30 (0.22% of total), in comparison first half of 2012, declared by employ- with 2011 year decreased by 4 units. In 2012 on the website of the ers, according to the National classifica- International HR Portal hh.ua in tion of occupations, included: software The main objectives of the Internet use Ukraine 15 396 jobs were posted in engineer (39%), system administrator by regular users in the third quarter of the field of Information Technology / (17%), computer systems engineer 2012 were: social networks — 56% of Internet/Telecom, out of them 11964 (14%), software technician (9%) and users, email — 52% of users, download- vacancies (77.7%) were offered alto- others (in the same period in 2011 such ing movies and music — 41%, search gether for IT professionals for develop- professions also were in high demand). for information — 36%, news sites and ment, testing and maintenance of the reading newspapers — 29%, online-vid- software. The most popular professions in eo — 23% and others. the first half of 2012, which were in

75 Internet subscribers by regions 66 Job vacancies for IT Professionals in 2012 (distribution by professional directions) 50 3,4% 17,6% 32,7% 25 19 17 14 4,3% 10 8 7 6 6 6,7% 0 4,8% 123456789

30,4% Programming, development Advisers for ERP systems Internet Database administrators Webmaster Banking software Web engineer Gaming software Kyiv city 32.7% Testing

Other regions (less than 3%) 10,0 30.4% Distribution of IT market specialists over the cities of Ukraine Dnipropetrovs’k 4.8% 7,5

Donetsk 6.7% 5,0 10,00 40% Lviv 4.3% 1,75 2,5 0,75 4,75 7% Odessa 17.6% 4,00 4% 19% 16% Kharkiv 3.4% 0 Kyiv KharkivLviv Dnipropetrovs’kOdesa

20 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area demand, according to the National The state of implementation of quality teaching and learning materials, classification of occupations were such priority state informatization regardless of their place of residence as software engineer (27%), software projects as components of the and learning, based on information and technician (17%), computer systems Information Society communication technologies. engineer (18%) systems administrator (14%), systems programmer (7%) and In today’s world the ICT sector harmon- According to the State Agency for others. ically combines telecommunications Investment and National Projects of and information services, manufactur- Ukraine now a national project “Open According to a survey of Exploring ing of information technology and tel- World” is implemented, aimed at the Ukraine IT Outsourcing Industry, in ecommunications, software, electronic creation of an information and com- 2012 Ukraine took the fourth place in information resources, which makes it munication network at the national the world in the number of IT pro- something more than just one of the level on the base of communication fessionals after the U.S., Russia and infrastructures and industries. technologies of the fourth generation India. Annually about 16 thousand 4G, which is scheduled to be fully professionals in the IT sector gradu- The ICT is increasingly used in envi- implemented by 2017 in all the regions ate from Ukrainian higher educational ronmental, medical, military, political, of Ukraine. Nowadays a pilot project in establishments, but only 4-5 thousand administrative, media and communica- 704 schools in Ukraine is completed, of them get employed in the special- tions, cultural, scientific and education- of which 225 are rural schools (32%), ty. 40% of IT professionals (about 10 al spheres, altering them and providing 95 are urban settlement schools (13%), thousand) work in Kyiv, 4.75 thousand social and human development of new and 259 are schools of the region- (19%) — in Kharkiv, 4 thousand (16%) properties, meanings and dimensions. al centers (37%), 126 are schools of — in Lviv, 1.75 thousand (7%) — in district centers (18%). With electronic Dnepropetrovsk, 0.75 thousand — in E-learning educational resources employed 5.5 Odessa (4%). thousand teachers and 14 thousand In order to accelerate the process of students. Also with the support of the Ukraine the training for IT sector is reforming the educational sector to Ministry of Education and Science of performed in 148 high schools. A total implement economic reform program Ukraine, Intel Company held a training licensed volume of students is 46 for 2010-2014 “Prosperous Society, of about 3.5 thousand teachers. 967 people, an average of 33% being Competitive Economy, Effective State” implemented. Total number of enrolled at the government level a number of With the purpose of individual ad- in the 2010-2011 academic years for IT extremely important state programs vanced training of teachers the curricu- areas was 15 557 people. for education was adopted, including lum “Teachers Online” is implemented, implementation of the “One Hundred developed by Microsoft Ukraine LLC, as Retraining of specialists is performed Percent” ICT in the educational process well as the course “Basics of safe han- by 17 training centers. in general schools by 2015, the main dling of ICT at a school” as part of the tasks are: to improve the regulato- program “Onlandia — children safety ry framework, equipping secondary on the Internet”. schools with ICT, creating an open network of educational resources, up- According to the Ministry of Education dating content, forms and methods of and Science, Youth and Sports of teaching information science, training Ukraine in order to provide parents and and advanced teacher training. teachers with assistance for the issues of protection of children from exposure In 2012, the computer classes were ar- to harmful information, a number of ranged in 2666 schools, which allowed manuals was developed and a list of complying with the targeted figures of recommended children’s online resourc- the “One Hundred Percent” program. es was set up to help children discover interesting, useful and secure Internet. A priority of education development is the introduction of modern information E-healthcare and communication technologies that provide improvement of the education- Nowadays the informatization of al process, availability and effective- Healthcare of Ukraine first of all means ness of education and training of young the use of information technology, generation for life in the information enabling one to quickly obtain the nec- society. essary information by medical workers.

By the order of Ministry of Education Recently in Ukraine a considerable and Science, Youth and Sports of work was carried out on the formation Ukraine as of October 1, 2012 No. 1060 of theoretical foundations and practical the Regulations on electronic educa- applications in healthcare of the ad- tional resources was adopted, the aim vanced computer technology. The new of creation of electronic educational re- concept of public policy for informati- sources is the modernization of educa- zation of healthcare Ukraine is devel- tion, producing content for educational oped and successfully implemented. space, ensuring equal access for participants of the educational process to the Nowadays the informatization of

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 21 1.3. Developments in information society and informatization area

Healthcare of Ukraine first of all means A.P. Romodanov, National Children’s corporation Microsoft, grants for free to the use of information technology, Specialized Hospital OHMATDIT, as Ukraine’s public libraries the software enabling one to quickly obtain the nec- well as other clinics of Kyiv, Lviv, at an amount of $9 million. essary information by medical workers. Rivne, Uzhghorod, Simferopol, Ivano- Frankivsk, Donetsk and Donetsk region. The initiative aims to increase access Recently in Ukraine a considerable to information and modern technology, work was carried out on the formation In 2012, ten more medical institu- equipping public libraries with comput- of theoretical foundations and practical tions in Kyiv, Lviv, Dnipropetrovs’k, er devices, training librarians to work applications in healthcare of the ad- Ivano-Frankivsk and Donetsk and with the latest technology and increas- vanced computer technology. The new Dnipropetrovs’k regions were connecting computer literacy of the population concept of public policy for informati- ed to the telemedicine network. in participating libraries across the zation of healthcare Ukraine is devel- country. oped and successfully implemented. Pursuant to paragraphs 2.28, 3.28 of the National Action Plan for 2012 Owing to Bibliomist program today free The basis for further informatization of a for implementation of economic Internet access is available in librar- health protection should be a unified reform program for 2010-2014 titled ies for 75% of residents of Ukraine’s medical information space of Ukraine. “Prosperous Society, Competitive regions, where it is technically possible Introduction of medical information Economy, Effective State” the Cabinet to connect to the worldwide web. The systems in the healthcare of Ukraine of Ministers of Ukraine approved the term of the program in Ukraine was has great importance for the effective Regulations on electronic registry of extended to October 31, 2014. management of a health protection patients (Resolution No. 546 of June establishment, for improvement of 6, 2012) and Action Plan to create an By the end of 2013 the centers of free quality and objectivity of diagnosis. electronic registry of patients to create Internet access and computer literacy Important consequences of automation an electronic registry of patients of training will be launched at the librar- are reduction of the number of diag- Vinnytsia, Dnipropetrovs’k, Donetsk ies of 157 settlements of Ukraine. nostic errors through information con- regions and Kyiv city (Decree No. 368-p trol of the diagnostic process, reduction of June 6, 2012). To date, the program fully complies of the time for registration of medical with the obligation of the interna- records, reports and more. By Decree of the Ministry of Health of tional technical assistance to Ukraine, Ukraine No. 666 of August 30, 2012, equipping 1578 libraries with the PCs To ensure technical base of informati- registered in the Ministry of Justice (5175 computers were installed) in all zation today a branch medical comput- of Ukraine on September 13, 2012, regions of Ukraine, including in remote er network UkrMedNet was created as No. 1579/21891, was approved the rural areas. 237 more libraries were a structure to provide for a number of Procedure of electronic registration of equipped with PCs with the support of regional support units. patients in Vinnytsia, Dnipropetrovs’k, central and local government. By the Donetsk regions and the city of Kyiv, end of 2013, it is planned to provide According to the American Chamber which provides for the formation of the access to the Internet and to equip with of Commerce in Ukraine in the field of registry database based on computer computers 1900 public libraries. telemedicine the only national tele- programs “UkrMedSoft: Hospital” and medicine network, “Mobile Health” “UkrMedSoft: Clinic”. According to the Ministry of Culture at project is in the process of formation, present the library industry focuses on being aimed at the development of The national project “Timely assis- the creation of electronic libraries and telemedicine in Ukraine by combin- tance” is actively implemented, aiming preservation of a network of libraries, ing advanced medical expertise and at creation of the unified regional creating conditions for strengthening modern telecommunication technol- dispatching services that use modern their material and technical base. ogies. This project is implemented by GPS-technologies in order to reduce MTS under the auspices of the Ministry the time of arrival of ambulance crews Thus, in 2012, a new integrated of Health of Ukraine and National to the patient. By Decree of the Cabinet resource — the electronic library Academy of Medical Sciences of of Ministers of Ukraine No.899-p “Culture of Ukraine” was created, Ukraine. of October 24, 2012, a preliminary intended for the general public. The feasibility study of the project was project is administered by the National The objective of the “Mobile Health” approved. Parliamentary Library of Ukraine. It is project is building up a telemedicine expected that the electronic library will network and usage of it for transferring Electronic Culture be part of the National Digital Library. data between the project participants. At the beginning of 2013 an electronic MTS Ukraine Company has built a na- Since 2009, with the support of the Bill library “Culture of Ukraine” comprises tional telemedicine network since 2009. and Melinda Gates Foundation the pro- more than two thousand documents. At the end of the first half of 2012 gram Bibliomist has been implemented, the telemedicine network comprised being a partnership program of the According to the Statistical Yearbook nineteen medical institutions, includ- International Research and Exchanges “Libraries of Ukraine in figures”, at the ing the Ministry of Health of Ukraine, Board (IREX), the U.S. Agency for beginning of 2012 in Ukraine there State Clinical Research Telemedicine International Development (USAID), were 37268 libraries. Most libraries Center in Kyiv, National Institute of the Ministry of Culture of Ukraine and fall within the area of influence of the Cardiovascular Surgery named af- the Ukrainian Library Association, in Ministry of Culture: 18 080, 2 901 of ter Amosov, Institute of Pediatrics, support of which the Bill and Melinda them are equipped with 12483 com- Obstetrics and Gynecology, Institute of Gates Foundation provided a grant puters, 377 libraries keep electronic Neurosurgery named after Academician of $25 million. The program partner, catalogue and only 2206 have access to

22 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area the Internet (in overall 9441 computers digital signature and enhanced key for 2012 to implement the economic are connected), of which 1912 have certificates are able to submit reports reform program for 2010-2014 titled electronic email. electronically to the Pension Fund “Prosperous society, competitive econo- and the State Statistics Committee of my, and effective government”. According to the information of the Ukraine. Ministry of Culture informatization Currently the implementation of of the museums is carried out in the By Decree of the Cabinet of Ministers e-government is carried on the Concept following areas: creation of electronic of Ukraine No.1007-r as of December of e-government in Ukraine, adopted systems for accounting of exhibits, 5, 2012 the concept of creation of the by Decree of the Cabinet of Ministers transformation of the museum funds electronic service “Taxpayer electron- of Ukraine No. 2250-r of 13 December in electronic form; placement of the ic office” and the Action Plan for its 2010, the Action Plan to implement the museums’ websites in the Internet, implementation were approved. Concept of e-government in Ukraine, creating on the sites of virtual museum approved by Decree of the Cabinet exhibitions, tours. According to the State Customs a of Ministers of Ukraine No. 1014-p procedure of electronic declaration was of 26 September 2011, the Action Virtual exhibitions are the most implemented, which is available to the Plan for implementation in Ukraine promising, since they provide access to public companies that are registered of the Initiative “Partnership” Open the resources of museums regardless with the customs authorities and have Government, approved by Decree of of their location and time of work. a digital signature. Use of this proce- the Cabinet of Ministers of Ukraine Such work has been only begun in the dure is possible in all customs modes. No. 220-r on April 5, 2012, and the museums of Ukraine and virtual expo- Thus in 2012, the figure of percentage Action Plan to implement the initia- sition is only in major museums such of issued electronic declarations in re- tive “Partnership” Open Government, as the National Museum of History of lation to the total number of completed adopted by Decree of the Cabinet of Ukraine, the Taras Shevchenko National customs declarations was 30%. Ministers of Ukraine No. 514-p of July Museum, and the National Art Museum 18, 2012. of Ukraine. At present, a single information space is created for sharing information To fulfill the objectives of the Concept The main problem of informatization between the State Customs and the of e-government in Ukraine the in the sector of culture has been for a State Tax Service within the framework Ministry of Economic Development pro- long time an inadequate public fund- of building up a complex multi-function vided implementation of Administrative ing, which obstructs implementation of “E-Customs” system, which operates by Services Registry in accordance with ICT in library and museum work. way of transmitting data arrays of elec- Decree of the Cabinet of Ministers of tronic copies of customs declarations to Ukraine No. 57 of January 30, 2013 Electronic Reporting the units of State Tax Service. “On Approval of the Procedure of Administrative Services Registry”, According to the State Tax Service The work on the development of a which is the only information computer of Ukraine in 2012 from January to multifunctional complex “Electronic database of administrative services pro- September the number of taxpayers Customs” system continues. In 2012 vided according to the Law of Ukraine who submit VAT reports electronically, 100 million hrn of budget funds were “On Administrative Services” by the en- reached 98%. Compared to last year allocated and directed to build a tities providing administrative services. through a centralized system 6.6 times new data center of the State Custom more documents were accepted. Service, development of departmental The law provides for the functioning telecommunications network, procure- of the unified State Portal of admin- According to tax analysts, receiving ment of software, bar code scanners for istrative services, which is the official free digital signature keys by taxpayers the TIR EPD procedures. source of information on the provision has contributed significantly to this of administrative services in Ukraine. growth. Development of e-government Currently the MEDT created a pilot version of the Unified State Portal In 2012, 148 thousand subscribers used According to the published research of of administrative services, whose the services of the accredited electron- the United Nations and the rating of features provide access to information ic key certification center that operates e-government development over the on administrative services, entities on basis of the State Tax Service of world “E-Government Survey 2012: providing such services and regulations Ukraine, who were issued 260.1 thou- E-Government for the People”, which governing the provision of adminis- sand enhanced Public Key Certificates. assess the readiness and the ability of trative services in the relevant field of state agencies in 193 countries to use public relations, administrative services The services of digital signature are ICT in the provision of public services, registry and so on. most popular among taxpayers-individ- Ukraine dropped by as much as 14 uals, comprising about 100 thousand positions and is ranked 68th. By Decree of the Cabinet of Ministers registered people. They were issued of Ukraine No.13 of January 3, 2013 131.4 thousand keys. 48.8 thousand The negative dynamics of Ukraine’s approved the procedure of keeping legal persons were registered, and rating indicates the slowdown of devel- Unified State Portal of administrative received 128.7 thousand certificates. opment of e-government technology in services was approved. Today, the comparison with other countries of the unified State Portal of Administrative Today the experts of the State Tax world. Services (http://poslugy.gov.ua) is under Service of Ukraine are working on development and is working in test improvement of this service. By the end Measures for e-governance are pro- mode. of 2012 the taxpayers who received vided for by the National Action Plan

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 23 1.3. Developments in information society and informatization area

In 2012, with the purpose of imple- administrations and city councils household appliances and electronics. mentation of measures to improve through their own websites and portals Online sales of clothing and foodstuffs electronic registration of legal entities on the Internet provide a wide range of are in the lowest demand among the and individual entrepreneurs, approved public information services, enabling consumers. by the Decree of the State Registration electronic applications of the citizens Service of Ukraine No.641 of April 19, to government through the Internet According to the research Kapersky 2012, the software “Registration portal” reception rooms, perform a variety of laboratories the users more actively was put into pilot operation, enabling interactive on-line consultation and master online purchase and tend to use to create and submit a package of surveys. However, there are regions online banking systems more often. electronic documents for the state in which at the district level the local Thus, 55% of Ukrainian Internet users registration of legal entities and natural authorities do not even have their own make purchases online, about 39% of persons — entrepreneurs in the Unified web sites. respondents work with a bank account State Register of legal entities and on a PC daily, and 29% and 17% respec- natural persons — entrepreneurs. Along with the positive dynamics of tively make payments via tablets and development of modern ICT there is a smartphones. In the context of sustainable devel- slowdown of the process of introduc- opment of the ICT in the regions the tion of new information technologies Turnover of online stores that are modern technological solutions for in the regions for the reason of limited connected to the system of receiving e-government, electronic document funding of some regional programs and payment cards online, eCommerceCon- management systems, various elements lack of coordinated actions of central nect Ukrainian Processing Center (UPC), of information and communication and local government bodies and local increased by 57% in 2012 as compared infrastructure are actively introduced as authorities, lack of the workforce. to 2011. the basis for e-democracy in governance, providing consumers, businesses, Some regions of Ukraine are charac- Number of operations, performed government institutions with quality terized by uneven development of by the cardholders in these stores, and affordable services. information infrastructure (electronic increased by 81%. The average amount information resources, registers, data- per transaction in 2012 amounted to For example, in Dnipropetrovs’k region bases, information-analytical systems), 260 hrn. In 2012, 406 new sites dealing a pilot project “Electronic region” was absence of a unified integrated system with e-commerce connected to the implemented and a portfolio in the of interdepartmental communication in system. In total 2048 online stores are amount of 53 subprojects of e-gov- electronic form (there is practically no currently connected to the system. ernance was accumulated; in Donetsk access to information of the state IAS (Donetsk) a regional center to pro- for its use by other local authorities, Promising trend of implementation of vide services to “open government” local self-government bodies). e-commerce is creation of electronic was established; in Vinnytsia region exchanges. With a view of implemen- (Vinnytsia) a network of centers to pro- E-commerce tation of the National Action Plan for vide services “Transparent Office” was 2012 as for realization of economic deployed, in Kharkiv the components of According to the information of the reform program for 2010-2014 titled an information system titled “Electronic State Statistics service the online “Prosperous Society, Competitive Kharkiv” are in the process of devel- sale of products by retailers for 2012 Economy, Effective State” the Ministry opment, in Odessa region a project for amounts to 681.4 million hrn. or 0.2% of Economic Development issued provision of services based on infor- of total retail turnover. Decree No.723 “On approval of the mation system “Electronic Region” is Contest requirements for the selection implemented, in Lviv region (Lviv) an The largest share of sales of goods over of commodity exchanges (electronic information web portals are created the Internet in the regions of Ukraine exchange sites) to organize and con- and the centers providing information pertains to Kyiv and comprises 468.2 duct electronic exchange trading for and advice to the public are launched, million hrn. or 68.7% of total online sales-purchase of coal products” of June a telemedicine network and informa- sales of goods. 19, 2012, whose goal is to ensure sale tion system “E-hospital” is implement- of coal in Ukraine in electronic stock ed, in Poltava region (Kremenchuk) a Also the irregularity of the online sales markets — commodity exchanges. number of projects are implemented on in Ukraine should be noted, in Donetsk, the basis of modern geo-information Kyiv, Dnipropetrovs’k and Kyiv region technologies; in Kyiv regional service they accounted for 88.4% or 602.4 centers “Electronic Capital” opened, in million hrn of the total sales of such Luhansk (Luhansk), Crimea (Alushta, products. Feodosia) the websites were created for provision of services; in Ivano-Frankivsk Despite its small percentage in the region (Ivano-Frankivsk) a Web portal structure of retail trade, the online of services was created and a regional sales are developing dynamically. project “Supermarket services” was Contributing to its development are launched, in Chernivtsi region the a high level of penetration of the implementation of a pilot project to Internet into the people’s lives, as well create a data-processing system of as lower prices than in the convention- regional management and more was al stores. initiated. The most high-capacity sector in At the regional level, almost all local Ukraine is a sector of online sales of

24 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area 1.3.3 M ain challenges for information society and informatization area and possible solutions ways to overcome them

The strive for the Information Society At the same time, availability, quality This approach is determined by signif- in Ukraine is documented in the nation- and complexity of electronic services icant costs of projects and their long al legislation and is declared in Section is currently quite minimal as compared period of cost recovery. 13 of the Program of Ukraine’s integra- those huge resources that are altogeth- tion into the European Union. According er spent on them by the state, indi- Given the dynamic processes of con- to this program the development of viduals and companies with their own vergence (convergence) of the areas of the information space in our country budgets. information and modern communica- is defined as the state of information tion technologies, the public policy in technologies (software and hardware Nowadays informatization projects these areas as a policy of raising the tools to access information, the tele- developed and implemented by the competitiveness of the national econo- communications component, etc.) and agencies are not agreed among them- my and material well-being of citizens, the quantitative and qualitative compo- selves, intended mainly for their own requires the development of new effec- sition of information products available needs. Also the issue of development tive approaches and principles for the in the market. of common principles and interaction development of the electronic commu- models of information systems of nications and information technologies. A characteristic feature of existing public authorities is still unresolved, information and communication the basic architecture, the models of In order to eliminate inter-region- environment (hereinafter — ICS) of functioning, protocols and standards al disparities, to improve regional the authorities is the low efficiency of for interaction of ICTs to the authorities competitiveness and accelerate the shared use of resources. Namely, lack of are not determined. development of information society the coordinated actions aimed at creation following solutions are offered: of ICS, the number of departmental The main problem for the develop- ›› strengthening inter-regional coor- data centers in the country is constant- ment of the Internet and growth of the dination of local government and ly growing, as well as the cost of their performance figures of the households local governments in the imple- creation/update/maintenance, and for connected to fixed broadband access mentation of programs (projects) of departmental communications net- to the Internet is reluctance of the informatization; works is constantly increasing, which Internet providers to implement pro- ›› improvement of interaction be- requires on the whole considerable jects on connecting small towns using tween central and local executive expenses from the budget. fiber-optic cables. bodies and local authorities in the development of information and communication infrastructure in the regions; ›› state support to less developed regions by using instruments of financial incentives; ›› increasing priority of funding of the local budgets items allocated to the development of informatization; ›› stimulate business entities providing Duplication of information in public information and telecommunication 1 72% registers (cadasters)* services to invest in regional infor- *According to overview results of 36 2 58% matization projects; state registers (cadasters) ›› creation of the fund/depository of 3 47% best regional projects, sharing of 1 — Location best practices of e-governance in all 2 — General information of a legal entity 4 42% regions of the country taking into 3 — General information of a physical account global trends. person 5 25% 4 — ERDPOU number of a legal entity, Contacts 6 22% 5 — Information of a land plots 6 — Certificate of state registration data 7 17% 7 — Type of activity, Ownership 8 14% 8 — License data 9 — Designated use of a land plot, Geo- 9 8% graphical coordinates 10 — Identification number of a physical 10 8% person Banking information (MFO) 11 — Place of work 11 6% 12 — State taxation body 12 3%

01020304050607080

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 25 1.3. Developments in information society and informatization area

Analysis of the system of state adminis- 2012 approves a list of indicators of Communication Infrastructure of tration bodies, which currently exercise development of information society Ukraine, which will satisfy the powers assigned to them in the field of and the Ministry of Education and demand of the state and society on telecommunications, information and Science, quality and affordable information development of the information socie- ›› Youth and Sports of Ukraine was services and ensure sustainable ty, performed from the perspective of charged to approve within four development of ICT; system approach, allows to conclude months the technique of formation ›› ensuring implementation of the on the ambiguity of interpretation of of the indicators of information project of creation of a Unified the principles of unified state policy society; Information and communication in the area of telecommunications, ›› unevenness of provision of the pub- platform, which shall become an information and development of the lic access to ICT. effective tool for implementation of information society and presence of administrative reform and moderni- nonconformity of functions defined by Problems that exist today are of zation of public administration; the provisions in their respect, which a complex nature, their solution ›› creation of technical audit system leads to exacerbation of currently exist- requires performing gradual system- and information technology projects ing problems in the area of information, atic transition to a qualitatively new to ensure their high quality stand- including: level of state administration that ards through their compliance with ›› dispersion of the functions of for- seeks to ensure transformation of the national standards harmonized mation and implementation of state the area of informatization from the with international ones. policy in the area of information model of consumption into the model and development of the information of output. society; ›› low level of national coordination Solution of these problems requires and interagency cooperation in the taking steps of systematic transition to implementation of national infor- a qualitatively new level of administra- matization projects, which have tion, namely: massive and decisive importance for ›› formation of the National Council for the state (absence of effective coor- Information Society Development in dination, supervision and control); Ukraine as an advisory body to the ›› lack of a systematic analysis of the President of Ukraine; area of informatization and the defi- ›› definition (creation) of the state nition of its priorities, including lack agency, whose main purpose is the of a national system of indicators formation and implementation of a for assessment of the develop- coherent policy in the field of elec- ment processes of the Information tronic communications and informa- Society. Currently, with a view of tion technologies; introduction of this system, Decree ›› ensuring implementation of the of the Cabinet of Ministers of project as for development of Ukraine No.1134 of November 28, the National Information and

1.3.4 NCCIR initiatives in the informatization area

National Information market entities, coordination entities and Communications and state supervision. Infrastructure The goal of this concept is estab- ЗGiven the development of the elec- lishing principles and directions of tronic market in Ukraine (electronic establishment, operation and devel- goods and services), whose set of opment of the national information instruments is fully determined by the and communication infrastructure in level of development of information Ukraine, setting up an appropriate and communication infrastructure system of principles and methods of of the state and the information and state regulation in this area, and iden- communication technologies on its tifying the ways of implementation base, the NCCIR initiated the devel- and expected results. opment of the Concept of National Information and Communication The main components NICI is geo- Infrastructure (hereinafter — NICI) graphically distributed national, that will provide the basic princi- regional, municipal and other corpo- ples of development and regulation rate information and communication civilized electronic market (electronic system (ICS), each of which shall goods and services) in Ukraine by provide information and communica- regulatory definition of common tion services in accordance with their objectives, establishing rules and reg- specific sectors of society it serves. ulations of interaction of electronic

26 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 1.3. Developments in information society and informatization area

The basis of national level of the NICI ›› ensure the development of compe- ›› lowering costs for maintenance of is a broadband multiservice transport tition and entrepreneurship, equal electronic services, servicing, sup- network of regional and departmental conditions for activity of the play- port, upgrade and administration of units of information and communi- ers of the market of information hardware and software; cation infrastructure, equipped with and communication technologies; ›› improvement of the efficiency of software and hardware systems activity of the state administration (software and hardware platforms Integrated information and bodies by improving information — PAP) to ensure compliance by the communication platform and information-analytical support infrastructure of the technological when dealing with strategic and functions and delivery of information In order to organize effective infor- operational objectives of socio-eco- services to users through broadband mation interaction between the nomic, scientific and technological access network. state administration bodies and development of the country; the National Commission, carrying ›› promotion of the development Each of software and hardware plat- out state regulation in the area of of the sectors of industries that forms (SHP) must have its configura- communication and information the are directly related to the devel- tion and perform functions according concept of creation (building up) of an opment, application and use of to its purpose (SHP “Governance”, SHP integrated information and commu- information and communication “Timely assistance”, SHP “Education”, nications platform was developed technologies; SHP “Health and medical care”, SHP and approved. The main objective of ›› provision of state leadership with “Trade”, SHP “Culture and Recreation”, the concept is to define the rules and up-to-date and reliable information SHP “Management of national infor- technology platform for constructing about the state of the economy and mation and communications infra- an integrated information environ- the implementation of reforms; structure” etc.). ment for automatic information ›› efficient use of budget funds by exchange of the information systems avoiding duplication of work in NICI will ensure: of public authorities. the creation, implementation and ›› operation of a unified system of modernization of information, unifi- nationwide administration, includ- Building up of such information and cation and standardization of tech- ing governance, regions and cities; communication platform will ensure: nical and technological solutions in ›› providing a wide range of diverse ›› automated information interaction new projects and compatibility in information and communication of the departmental information the modernization projects; services to institutions, organiza- systems, including direct auto- ›› development of competition and tions, businesses and the public on matic exchange of information and entrepreneurship, equal conditions a free and commercial basis mutual coordination between its for activity of the players of the logically interrelated and depend- information and communication Implementation of the Concept will ent information registers; technologies market. allow: ›› automated interagency cooperation ›› The integrated information and ›› ensuring regulatory and normative when working with individuals and communication platform shall technical base of the processes of entities on an unified, accurate and become the basis for development creation, development and oper- informative and non-contradictory and formatting of the electronic ation of national information and basis; market goods and services. communication infrastructure in ›› automated legally meaningful Ukraine, its bringing in line with interaction with state administra- European legislation; tion bodies and electronic service ›› formation of an integrated infor- of individuals and business entities mation space of society, including in the form of a “single window” for the solution of the objectives using the digital signature; of economic development, social ›› consolidation of information stored protection, health care, increasing in various departmental and public education quality, cultural level, registers, databases, and informa- realization of environmental pro- tion systems for the information tection, meeting the needs of gov- and analytical systems; ernment, law enforcement, defense ›› safety of information in accordance and national security of Ukraine; with the law on the protection of ›› ensure integration of national infor- information and personal data. mation and communication infrastructure to the global information Implementation of the Concept will infrastructure; promote effectiveness of state admin- ›› ensure information security in the istration, openness and transparency information space of the state; of government and will ensure: ›› provide all entities of modern infor- ›› creation of the conditions for mation society with high quality the effective use of national information and communication information-analytical systems and services, including the possibility information resources, ensuring of free access to regional, national high quality of information and and global information assets. communication services to users;

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 27 2 NCCIR Principal Activity 2.1 NCCIR regulatory activity

In 2012 NCCIR kept on working at the 15 NCCIR Decisions which during improvement of the legislative and 2012 approved normative legal acts, normative legal basis in the area of were registered in the Ministry of telecommunications, informatization, Justice of Ukraine, including 3 of them use of radio-frequency resource and in 2013. rendering of postal services directed to further improvement of a state Thus in 2012 the Ministry of Justice of the telecommunications services of Ukraine registered 13 NCCIR market, creation of favourable condi- Decisions. The main Decisions of tions for activity of business entities, them are: NCCIR Decision of August effective use of the limited resources, 23, 2012 No.428 On Approval of the upgrading of telecommunications Rules of Telecom Cable Ductwork services, exercise of state supervision, Leasing and Recognition of NCCIR development of information society Decision of July 23, 2009 No.1607 of Ukraine, creation and ensuring of as Invalid registered in the Ministry electronic government systems func- of Justice of Ukraine on September tioning, adaptation of the legislation 12, 2012 under No.1571/21883; of Ukraine to the legislation of the NCCIR Decision of October 25, European Union. 2012 No.540 On Approval of the Procedure of Regulation of Tariffs More than 30 normative legal acts for Telecom Cable Ductwork Leasing were developed during the year. for Telecommunications Operators Among them are: registered in the Ministry of Justice ›› Draft Laws of Ukraine — 6; of Ukraine on November 12, 2012 ›› Draft Decree of the President of under No.1901/22213; NCCIR Decision Ukraine — 1; of July 5, 2012 No.324 On Approval ›› Draft Orders and Regulations of the of the Procedure of Traffic Routing Cabinet of Ministers of Ukraine — 3; in the Public Switched Telephone ›› normative legal acts approved by Network of Ukraine registered in NCCIR Decision — more than 27. the Ministry of Justice of Ukraine on July 25, 2012 under No.1252/21564; NCCIR Decision of November 1, 2012 No.560 On Approval of the Procedure for the Register Telecommunications

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 29 2.1. NCCIR regulatory activity

Operators and Providers and Networks Maintenance and Operation ›› NCCIR Decision On Approval of the Recognition of NCCIR Decision and Local, Long-Distance and Regulations on State Regulation of November 11, 2010 No.514 as International Telecommunications of PSTN Numbering Resource in Invalid registered in the Ministry of Channels Leasing and Recognition of Ukraine as reconsideration by the Justice of Ukraine on November 22, NCCIR Decision of December 10, 2009 Verkhovna Rada of Ukraine and 2012 under No.1958/22270; NCCIR No.1789 as Invalid, On Approval of coming into effect the Law of Decision of November 29, 2012 the Licensing Conditions for Activity Ukraine On Amendments to the No.620 On Approval of the Limiting in the Telecommunications Area Certain Legislative Acts of Ukraine Tariffs for Telecom Cable Ductwork on Rendering of Mobile Telephone on Communications Regulation Leasing for Telecommunications Communications Services with (registration No.9747) were Operators registered in the Ministry the Right to Telecommunications required; of Justice of Ukraine on December 17, Networks Maintenance and Operation ›› NCCIR Decision On Approval 2012 under No.2093/22405; NCCIR and Telecommunications Channels of the Procedure of the State Decision of June 21, 2012 No.308 Leasing, On Approval of the Licensing Supervision of the Postal Services On Approval of the Limiting Tariffs Conditions for Activity in the Area Market in View of the Necessity of for Public Telecommunications of Rendering of Fixed Telephone Amendments to the Law of Ukraine Services registered in the Ministry Communications Services with the On Postal Service; of Justice of Ukraine on June 22, Use of Wireless Telecommunications ›› NCCIR Decision On Approval 2012 under No.1031/21343, NCCIR Network Access with the Right of the Licensing Conditions for Decision of November 1, 2012 No.559 to Telecommunications Channels Telecommunications Activity On Approval of the Procedure for Maintenance and Leasing and NCCIR on Rendering of Maintenance Providing Conclusions regarding draft Decision On Approval of the and Operation Services for EMC and Permits to Operate REF and Licensing Conditions for the Use of Telecommunications Networks, Radiating Devices and Recognition Radio Frequency Resource of Ukraine . On-Air Television and Radio of Certain NCCIR Decisions as Invalid Broadcasting Networks, Wired registered in the Ministry of Justice In addition the draft Law of Ukraine Radio Broadcasting and Television of Ukraine on January 3, 2013 under On Amendments to the Law of Networks. No.57/22589, NCCIR Decision of Ukraine On the Basic Principles for November 29, 2012 No.624 On the Development of Information Approval of the Basic Requirements Society of Ukraine for 2007-2015 for the Telecommunications Services and the draft order of the Cabinet Contract and Recognition of NCCIR of Ministers of Ukraine On Approval Decision of March 26, 2009 No.1420 of the Action Plan on Creation and as Invalid registered in the Ministry Provision of Electronic Government of Justice of Ukraine on December Systems Functioning were approved 24, 2012 under No. 2150/22462 and and submitted by NCCIR decisions to others. the Cabinet of Ministers of Ukraine for consideration in accordance with the The Rules of the Provision and established procedure. Obtaining of Telecommunications Services (new edition) were approved 12 normative legal acts in the area by the regulation of the Cabinet of of telecommunications, informatiza- Ministers of Ukraine of April 11, 2012 tion, use of radiofrequency resource No.295. as well as exercise of state supervision, in particular, the draft Laws The draft Decree of the President of Ukraine On Amendments to the of Ukraine On Amendments to the Certain Laws of Ukraine in con- Certain Decrees of the President nection with the Creation of Public of Ukraine on the Division of Telecommunications Services Fund, Public Authorities’ Powers in the On Joint Use of Telecommunications Informatization Area was approved at Networks Infrastructure, On a session of the Government. Amendments to the Law of Ukraine On Telecommunications as Regards 8 draft normative legal acts were also Determination and Analysis of taken as a principle and proposed for the Corresponding Markets of public discussion by NCCIR Decisions. Telecommunications Services Which Among them are: NCCIR draft Decision Are a Potential Subject of the On Approval of the Regulations on Expected Regulation and Creation of Rendering of Subscriber Numbers Effective Tools and other acts were Transference Services and Use of coordinated with the interested state Personal Numbers, NCCIR draft authorities and finalized by the results Decisions On Approval of the of consideration and public discussion. Licensing Conditions for Activity in the Telecommunications Area During the year 2012 3 draft regu- on Rendering of Fixed Telephone latory acts were not submitted to Communications Services with the Commission for consideration, in the Right to Telecommunications particular:

30 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.1. NCCIR regulatory activity 2.1.1 NCCIR legislative initiatives

Draft Law of Ukraine On The draft Law of Ukraine On Amendments to the Certain Laws of Ukraine in Connection Amendments to the Certain with the Creation of Public Telecommunications Services Fund was developed in Laws of Ukraine in Connection order to decide a question on ensuring of universal user access to the Public Switched with the Creation of Public Telephone Network and rendering of standard-quality public telecommunications Telecommunications Services services in the whole territory of Ukraine under the government-regulated tariffs. Fund The draft Law provides coordination of the legislation of Ukraine on universal access and universal services with the legislation of the European Union, in particular, the provisions of Directive 2002/22/ЕС of March 7, 2002 (Universal Services Directive) that requires ensuring of certain-quality telecommunications services availability for all users in the whole territory irrespective of geographical location at a rea- sonable price, and provides a possibility of creation of the corresponding fund in the country, establishment of transparent mechanisms of its filling and distribution of transferred means.

The proposed amendments to the Law On Telecommunications provide for a decision of the problem on ensuring of access for the population of Ukraine to the public telecommunications services by means of creation of the Public Telecommunications Services Fund as the special fund in the structure of the State Budget of Ukraine.

The norms of the draft Law provide for the amendments to Article 62 of the Law of Ukraine On Telecommunications regarding addition of the public telecommunications services with the fixed Internet access services at a rate up to 2 Mbps inclusive.

The Fund’s means will enable to: ›› remove inequality of telecommunications services ensuring and limitation of user access to the public telecommunications services (especially in rural, mountain and depressed areas); ›› raise a level of provision of users with the broadband telecommunications services and stimulate the development of broadband access in rural, mountain and depressed areas.

The part of the Fund’s means is provided for temporary recovery of expenses to the telecommunications operators for rendering of public telecommunications services, the other part is provided for partial recovery of expenses for development of the Broadband Internet Access networks in rural area.

Adoption of the draft Law will speed up the development of telecommunications market and provide a possibility of short-term overcoming of the disbalance observ- able between ICT levels in big cities and in rural area.

Draft Law of Ukraine On Joint In order to realize the tasks determined by items 1 and 2 of the instruction of the Use of Telecommunications President of Ukraine of March 21, 2012 No.1-1/645 on implementation of the state- Networks Infrastructure of-the-art telecommunications technologies that meet the international standards and securing of the civil right to free Internet access (hereinafter referred to as the instruction of the President of Ukraine) NCCIR developed the draft Law.

The developed draft Law established the fundamentals of joint use of telecommunications networks infrastructure in order to develop the Public Switched Telephone Network of Ukraine and satisfy the needs of telecommunications services users including Internet access.

The draft Law determines the powers of state and local authorities, rights and duties of business entities and other persons that own (possess) the elements of telecommunications networks infrastructure concerning the creation of conditions for joint use of this infrastructure.

The draft Law finalized in view of the findings of legal examination carried out by the Ministry of Justice of Ukraine was approved by NCCIR Decision of December 13, 2012 No.650, and is under completion in order to settle the divergences when coming to agreement about it with the interested central executive authorities specified by the Cabinet of Ministers.

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 31 2.1. NCCIR regulatory activity

Draft Laws on the Use of Radio In order to ensure efficiency of the use of radio frequency resource of Ukraine, Frequency Resource stimulate investments in the development of the telecommunications and information technologies area, efficient and free implementation of state-of-the-art telecommunications technologies by business entities in the telecommunications market and increase in volumes of telecommunications services, the draft Law of Ukraine On Amendments to the Certain Legislative Acts of Ukraine was developed.

The draft Law stipulates considerable simplification of conditions for the use of radio frequency resource by means of decrease in number of permissions and shortening of terms required for the procedures to acquire the right to use the radio frequency resource. The draft Law proposes to reserve technical documents: conclusion regarding electromagnetic compatibility for radio electronic facilities and radiating devices; technical conclusion regarding radio electronic facilities and radiating devices operation; technical conclusion regarding radio electronic facilities and radiating devices import.

This legislative initiative meets the up-to-date state policy of economic activity deregulation and simultaneous conservation of necessary regulatory mechanisms on ensuring of electromagnetic compatibility and effective use of the radio frequency resource.

Draft Laws on State According to item 3 of the regulations On the National Commission for the State Supervision Issues Regulation of Communications and Informatization, one of the NCCIR tasks is exercise of state supervision in the area of telecommunications, informatization, use of radio frequency resource, rendering of postal services.

According to the powers NCCIR developed the draft laws on required amendments to the legislation that concerned state supervision, namely, amendments to the Code of Ukraine on Administrative Offences that, in particular, provided the administrative responsibility for the breach of the telecommunications legislation at carrying out of the kinds of activity unliable to licensing, for the activity on rendering of telecommunications services without inclusion in the Register Telecommunications Operators and Providers.

NCCIR proposed the required amendments to the legislation that concerned the state market supervision: ›› amendments to the Law of Ukraine On State Market Supervision and Control of Inedible Products as regards the determination of a state market supervision body not only as a central executive body but also as a collective body (NCCIR); ›› amendments to the Code of Ukraine on Administrative Offences that empowers the NCCIR Head, Members and officials authorized by NCCIR to try cases of administrative offences concerning market supervision.

Adoption of the stated amendments is stipulated with the necessity of adjustment of a mechanism of administrative sanctions at a legislative level by the results of carried out state and state market supervision activities.

32 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.1. NCCIR regulatory activity 2.1.2 Development and Improvement of Regulatory Acts in the Telecommunications Area

Rules of the Provision Implementation of the Rules of for Telecommunications Operators and Obtaining of Telecom Cable Ductwork Leasing pro- under No.1901/22213 approved Telecommunications Services vides the whole technological network by the decision of the National (New Edition) of rendering of a service, concretizes Commission for the State Regulation of the procedure for leasing of the tele- Communications and Informatization of The above document was adopted at a com cable ductwork and interrelations October 25, 2012 No.540. session of the Cabinet of Ministers of of business entities at TCD designing, Ukraine of April 11, 2012 No.295. conclusion of contracts and use. The act coming into force improved the normative legal basis in the corre- The Rules take comprehensively into According to item 4 of Article 66 of the sponding area, enabled to establish the consideration a state of the tele- Law of Ukraine On Telecommunications uniform principles of formation of the communications services market and the tariffs for telecom cable ductwork tariffs for telecom cable ductwork leas- determine the general requirements for leasing for telecommunications opera- ing for telecommunications operators rendering and receiving of all kinds of tors are particularly subject to the state for all business entities and enabled services. Hereby the Rules concretize regulation. NCCIR and other authorized bodies to the requirements for public (universal) use the required leverage for decision services, and it has enabled to establish The telecommunications operators of urgent problems on TCD use, what the unified requirements, which do not operate and build TCD routs for their all the participants of telecommu- depend on a kind of services and a way own needs, and in case of available nications market were interested in, of their rendering. free place in the channels, they lease development of fair competition in this it to other business entities. Before market, intensification of the use of Approaches to the telecommunica- implementation of the state regulation limited resources (telecommunications tions services rendering and receiving in the sphere of tariffs for this kind of lands), stimulation of implementation applied in the new edition of the Rules services, such a lease was carried out of the state-of-the-art technologies in are directed first of all to the protection under the tariffs established on their the sphere of telecommunications. of user interests, time and purses. The own by the TCD proprietors according Rules regulate how telecommunica- to the concluded contract. Procedure for Traffic tions services should be used according Routing in the Public Switched to qualitative indices, a character of Section VI of the Rules specifies that Telephone Network of Ukraine tariffing and many other nuances. for TCD lease the customer pays the supplier according to the TCD leasing The procedure for traffic routing in the Rules of Telecom Cable contract only for the following services: public switched telephone network Ductwork (TCD) Leasing and specifications development and issue, of Ukraine determines the general the Procedure for Tariff working draft approval, TCD supplier’s provisions and organizational require- Regulation on Leasing of the technical supervision, reservation of ments as regards the procedure of Telecom Cable Ductwork TCD place, allocation of a place in the voice telephony traffic routing in the TCD channel and TCD use. public switched telephone network as In connection with the development of well as the procedure for traffic routing own networks by telecommunications Considering the above and being gov- of all kinds of voice telephony in PSTN operators and growth of competition, erned by the requirements of Articles and the procedure for routing when a burning problem of optimization of 18 and 66 of the Law of Ukraine On using abbreviated numbers. The stated the procedure of TCD use that belongs Telecommunications with the purpose document establishes the procedure to telecommunications operators of of further development of tariffs for for NCCIR control over observance of different forms of ownership has been TCD leasing for telecommunications traffic routing by telecommunications raised. Under such circumstances the operators, NCCIR developed the operators. necessity of implementation of the draft Procedure for Tariff Regulation state regulation for the use of this seg- on Leasing of the Telecom Cable The Procedure for Traffic Routing in the ment of telecommunications resources Ductwork for Telecommunications Public Switched Telephone Network of has emerged. Operators (hereinafter referred to as Ukraine approved by NCCIR Decision the Procedure). of July 5, 2012 No.324 registered in the The Rules of Telecom Cable Ductwork Ministry of Justice of Ukraine on July 25, (TCD) Leasing were approved by NCCIR Taking into account the importance of 2012 under No.1252/21564. Decision of August 23, 2012 No.428. the problem of creation of a fair tool They were registered in the Ministry for determination of the cost of TCD Basic Requirements for the of Justice of Ukraine on September 12, leasing services, NCCIR involved the Telecommunications Services 2012 under No.1571/21883 (hereinafter market participants — telecommunica- Contract referred to as the Rules). These Rules tions operators and providers who own determine the conditions for TCD leas- or use TCD — in work at the develop- In order to meet the requirements ing for telecommunications operators ment of the draft Procedure. of Article 63 of the Law of Ukraine and providers to other business entities On Telecommunications regarding for their own needs or rendering of On November 12, 2012 the Ministry the NCCIR establishment of the basic telecommunications services. of Justice of Ukraine registered the requirements for the telecommunica- Procedure of Tariff Regulation on tions services contract and considering Leasing of the Telecom Cable Ductwork the amendments to the legislation,

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 33 2.1. NCCIR regulatory activity in particular, adoption of the Law The draft Rules determine the condi- Completion of development of the of Ukraine On Amendments to the tions for access of telecommunications above Regulations and implemen- Certain Acts of Ukraine on the National operators and providers to houses and tation of the subscriber numbers Commissions for the State Regulation constructions to execute the corre- transference service according to the of Natural Monopolies in the Sphere of sponding works and use of house distri- above NCCIR Decision was planned: Communications and Informatization, bution networks in order to render the for mobile communications networks Securities and Financial Services telecommunications services to users. — up to 30.11.2013 and for fixed local Markets and the Rules of the Provision telephone communications networks and Obtaining of Telecommunications The above draft Decision was submit- — up to 31.12.2014 if there was the Services approved by the decision of ted to the Ministry of Justice of Ukraine corresponding technical feasibility of the Cabinet of Ministers of Ukraine of for legal examination. switching stations and points. April 11, 2012 No.295, NCCIR developed the draft Basic Requirements Rules for Activity in the The issue of numbers transference and for the telecommunications services Field of Telecommunications use of personal numbers lies in giving contract. (Activity of Rendering the an opportunity to each subscriber to Internet Access Services) select freely the service provider owing The basic requirements for the tel- to the implementation of still inacces- ecommunications services contract In order to provide the efficiency of sible services of numbers transference were approved by NCCIR Decision activity in the field of telecommunica- and use of a personal number. As the of November 29, 2012 No.624 and tions (activity of rendering the Internet European practice shows under such registered in the Ministry of Justice access services and/or services in the circumstances the operators will try of Ukraine on December 24, 2012 Internet) and creation of equal condi- to create the advantages for servicing No.2150/22462 directed to ensuring tions for entry to the telecommunica- and attraction of new subscribers, and of balance of the interests between tions market for all business entities provide them with the best conditions telecommunications operators and and bringing the norms of the effective for communications in the telecommu- providers and telecom services users, normative legal act to conformity nications networks. and also to ensuring of realization of with the requirements of the Law of the rights of telecom services users Ukraine On Telecommunications, the Subscriber numbers transference stipulated by Article 32 of the Law of experts of the Department together is permissible between the mobile Ukraine On Telecommunications, in with the representatives of other NCCIR communications networks, and in the particular, concerning the state protec- organization departments developed fixed communications networks the tion of their rights, timely and qual- the draft Rules for Activity in the subscriber number is transferred within ity receiving of telecommunications Field of Telecommunications (Activity the same numbering area. During the services, free receipt of comprehensive of Rendering the Internet Access realization of services it is necessary information on contents, quality, cost Services). After taking the stated draft to give an opportunity of transfer and and procedure of rendering of telecom- as a principle and public discussion it acceptance of calls of international, munications services from a telecom- was approved by NCCIR Decision on long-distance, local telephone communications operator, provider. July 12, 2012 No.346 and submitted for munications and in the networks in endorsement to the interested execu- which it is stipulated, SMS and MMS Rules of Telecommunications tive authorities. By the end of the year exchange, and the establishment of Operators and Providers’ 2012 the State Service of Ukraine for connection with the transferred sub- Access to the Housing Regulatory Policy and Entrepreneurship scriber number and personal number Facilities of All Forms of Development led public discussions of shall be carried out in real time. Ownership for Organization the draft with the representatives of and Execution of the the market. Limiting Tariffs for Public Corresponding Works to Telecommunications Services Ensure Internet Access for Regulations on Rendering Users of Subscriber Numbers One of the principles of tariff formation Transference Services and Use is orientation to cost price and estab- The purpose of adoption of the decision of Personal Numbers lishment of a real level of tariffs, which of the Cabinet of Ukraine On Approval is a condition for achievement of the of the Rules of Telecommunications In pursuance of the requirements of the balance of interests of telecommuni- Operators and Providers’ Access to Law of Ukraine On Amendments to the cations operators and users, decrease the Housing Facilities of All Forms Law of Ukraine On Telecommunications of price disproportions in the levels of of Ownership for Organization and on Extension of the List of Services, tariffs for telecommunications services, Execution of the Corresponding Works NCCIR Decision of 29.11.2012 No.619 in particular, cross backing of some to Ensure Internet Access for Users approved the draft Normative Legal kinds of services at the expense of is settlement of relations between Act On Taking NCCIR Draft Decision others and between the categories of telecommunications market subjects, On Approval of the Regulations on users, prevention of the establishment owners of property complexes, local Rendering of Subscriber Numbers of dumping or discriminatory prices authorities at execution of the cor- Transference Services and Use of and support of rendering of unprofit- responding works to ensure Internet Personal Numbers As a Principle (here- able services. So cost price of services access for users and use of house dis- inafter referred to as the Regulations). increases constantly owing to inflation- tribution networks being an important ary processes, in particular, regarding component of telecommunications the fuel, material and power supply networks. expenses, and consumption decreases, the services of fixed (local) telephone

34 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.1. NCCIR regulatory activity communications, first of all, rural com- of mobile communications services subscriber REFs and stationary REFs for munications have been unprofitable for rendered by the Ukrainian State Center which it was not necessary to receive the last years for telecommunications of Radio Frequencies, and by the results conclusions regarding REFs ЕМС. operators who render them. of which the decision on amendments to the normative documents as regards The main areas of improvement the In this connection, NCCIR prepared the quality indices of mobile communi- procedure are aimed at achievement of the propositions on a tariff change cations services will be made. the maximum possible positive results for public telecommunications ser- due to the minimum required expend- vices discussed with the represent- In order to receive the information iture of user resources of the radio atives of the Joint Representative necessary for realization of NCCIR frequency resource of Ukraine, namely: Body of Trade Unions and the Joint powers from telecommunications 1. exclusion of data which is not direct- Representative Body of Employers operators and ensure comprehensive ly connected with the electromag- within the Working Group (a trilateral and recurrent informing the users netic compatibility calculations and advisory body) on Development and on the quality levels of telecommu- an issue of use of radio frequency Improvement of Limiting Tariffs for nications services rendered by tel- resource of Ukraine from application Public Telecommunications Services ecommunications operators, NCCIR forms; (NCCIR Order of May 4, 2012 No.52 On approved the List of Quality Indices 2. data from the Single State Registry Approval of the NCCIR Working Groups for Fixed Telephone Communications of Legal Entities and Individual List and Composition) and agreed with and Mobile Communications Services, Entrepreneurs (www.irc.gov.ua) is the Ministry of Economic Development Whose Levels are Subject to Obligatory used for checking information on a and Trade of Ukraine. Promulgation by Telecommunications business entity; Operators in 2014 by Decision No.670 3. a holographic protective element is By the results of work the agreement of December 20, 2012. removed from the form of conclu- on tariff review within the limits sion and permission, a norm of a meeting the scheduled scale laid in the Normative Legal Acts on Radio strict reporting form is excluded; calculations of main predictive macro- Electronic Facilities and 4. procedure for receipt of operating economic indices of the economic and Radiating Devices Licensing, permissions for subscriber radio social development of Ukraine for the Registration, Use and electronic facilities is improved; year 2012 (10%). Operation 5. the form of an operating permission includes the parameters necessary Thus in order to bring the tariffs for In view of more than three-year experi- for a user of the radio frequency public telecommunications services ence of application of the Regulations resource of Ukraine to calculate nearer to a level of their cost price for the Issue of Permissions for Import the sum of monthly charge for the under the conditions of conservation of Radio Electronic Facilities and use of radio frequency resource of of services availability for users, NCCIR Radiating Devices to Ukraine approved Ukraine according to Article 321 of adopted the Decision of June 21, 2012 by NCCIR Decision of February 5, 2009 the Tax Code of Ukraine; No.308 On Approval of Limiting Tariffs No.1338 registered by the Ministry of for Public Telecommunications Services Justice of Ukraine in accordance with The Procedure includes a list of station- registered in the Ministry of Justice the established procedure and for ary radio electronic facilities (with the of Ukraine on June 22, 2012 under bringing the norms of the effective specified conditions of their establish- No.1031/21343, and it came into force normative legal act to conformity with ment and technical characteristics) for on July 1, 2012. Article 29 of the Law of Ukraine On which provision of conclusion regarding Radio Frequency Resource of Ukraine, electromagnetic compatibility is not Telecommunications Services the NCCIR experts together with the required. Quality representatives of the Ukrainian State Center of Radio Frequencies developed Having considered the experi- The tentative lists of quality indices, the Procedure for Import and Issue ence in application of the effective whose levels would be subject to of Permissions for Import of Radio Licensing Conditions for Activity in obligatory promulgation by telecom- Electronic Facilities and Radiating the Field of Telecommunications munications operators in 2014, was Devices to Ukraine taken as a principle on Rendering of Fixed Telephone approved by NCCIR Decision of April 27, under NCCIR Decision of October 4, Communications Services with the 2012 No.221. 2012 No.497. Today additional consul- Right to Telecommunications Networks tations are carried out with the public Maintenance and Operation and The corresponding procedures (meth- organizations that have sent their com- Leasing of Local, Long-Distance and ods) for testing of the quality indices ments and propositions to the draft. International Telecommunications of mobile communications services in- Channels approved by NCCIR Decision cluded into the tentative list by means NCCIR Decision of November 1, 2012 of December 10, 2009 No.1789 reg- of practical tests during the European No.559 approved the Procedure for istered in the Ministry of Justice of Football Championship and during the Providing Conclusions regarding Ukraine on January 13, 2010 under month after termination of the cham- EMC and Permits to Operate REF No.19/17314 in order to diminish reg- pionship were subject to approbation and Radiating Devices registered in ulatory pressure on business entities under the above Decision. the Ministry of Justice of Ukraine on and to bring the norms of the effective January 3, 2013 No.57/22589. The normative legal act to conformity According to the Decision of September above procedure improved provision of with the requirements of the Law 14, 2012 No.465 NCCIR has been conclusions regarding ЕМС and oper- of Ukraine On Telecommunications, processing the results of work on ating permits, established the features NCCIR developed the draft Licensing measurement of the quality indices of issue of operating permissions for Conditions for Activity in the

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 35 2.1. NCCIR regulatory activity

Field of Telecommunications on In order to diminish regulatory pressure In pursuance of this task NCCIR Rendering of Fixed Telephone on business entities and to bring the developed the draft Procedure of Communications Services with norms of the effective normative legal State Supervision in the Field of the Right to Telecommunications act to conformity with the require- Telecommunications that determined Networks Maintenance and Operation ments of the Law of Ukraine On the mechanism of state supervision and Leasing of Telecommunications Telecommunications, the Procedure over telecommunications market, rights Channels taken as a principle by for the Register Telecommunications and duties of the persons authorized NCCIR Decision of November 22, Operators and Providers was approved to exercise state supervision over 2012 No.607, the draft Licensing by NCCIR Decision of November 1, observance of the telecommunications Conditions for Activity in the 2012 No.560, and NCCIR Decision of legislation, and also the rights and du- Field of Telecommunications on November 11, 2012 No.514 was recog- ties of business entities to be checked, Rendering of Mobile Telephone nized as invalid. The stated Decision grounds for scheduled and off-schedule Communications Services with was registered in the Ministry of Justice checks, procedure and results of these the Right to Telecommunications of Ukraine on November 22, 2012 checks. The procedure was approved by Networks Maintenance and Operation under No.1958/22270. NCCIR Decision of December 13, 2012 and Leasing of Telecommunications No.649 registered in the Ministry of Channels taken as a principle by In order to create the equal conditions Justice of Ukraine on January 10, 2013 NCCIR Decision of December 13, of entry to the telecommunications under No. 92/22624. 2012 No.651 and the draft Licensing market for all business entities and Conditions for Activity in the Field of bringing the norms of the effective NCCIR also developed the draft Telecommunications on Rendering normative legal act to conformity with Procedure of State Supervision over of Fixed Telephone Communications the requirements of the Law of Ukraine the Use of Radio Frequency Resource Services with the Use of Wireless On Telecommunications, the NCCIR of Ukraine in Public-Frequency Bands Telecommunications Network Access experts developed the draft regulation that determined the mechanism of with the Right to Telecommunications of the Cabinet of Ministers of Ukraine state supervision over the use of radio Channels Maintenance and Leasing On Amendments to the Regulation frequency resource in public-frequency taken as a principle by NCCIR Decision of the Cabinet of Ministers of Ukraine bands, procedure of scheduled and of December 27, 2012 No.683. of June 16, 2004 No.773 On Amount off-schedule checks and results of and Procedure of Payment Acceptance these checks, rights and duties of the The Licensing Conditions determine for Issue, Reissue, Issue of License authorized officials as well as rights the list of organizational, qualifying Duplicate, Copy of License of Activity and duties of business entities to be and other special requirements to be in the Field of Telecommunications checked. The procedure was approved fulfilled by business entities when and Its Prolongation. After taking the by NCCIR Decision of December 27, carrying out the activity in the field of stated draft as a principle and public 2012 No.684 registered in the Ministry telecommunications. discussion it was approved by NCCIR of Justice of Ukraine on January 22, Decision on February 23, 2012 No.93 2013 under No.175/22707. The documents are placed on the and submitted for endorsement to the NCCIR official website for public interested executive authorities. Today In order to determine the order in discussion. correspondence is carried on with the mutual relations between subjects of Ministry of Finance of Ukraine in order telecommunications market and NCCIR According to Articles 14, 36 of the to specify certain positions. as regards the measurement of tele- Law of Ukraine On Radio Frequency communications networks parameters Resource of Ukraine NCCIR Draft Normative Legal Acts on State at carrying out of the actions on control Decision On Approval of Licensing Supervision Issues over quality of telecommunications Conditions for the Use of Radio services, telecommunications networks Frequency Resource of Ukraine was As a result of the amendments, functioning and operation, observance taken as a principle by the Decision of which were introduced by the Law of the procedure of traffic routing in the December 20, 2012 No.666. of Ukraine On Amendments to the public switched telephone networks Certain Acts of Ukraine on the National by telecommunications operators and The Licensing Conditions are the nor- Commissions for the State Regulation creation of conditions for implemen- mative legal act that contains the list of Natural Monopolies in the Sphere of tation of the effective state control of organizational, qualifying and other Communications and Informatization, by means of the technical facilities special requirements to be fulfilled in Securities and Financial Services over observance of the requirements case of economic activity that provides Markets, to the Law of Ukraine On of the telecommunications legisla- RFR use for rendering of telecommuni- Telecommunications, the Law of tion by the market subjects, NCCIR cations services except for the distribu- Ukraine On Radio Frequency Resource developed the draft Regulations for tion of television and radio programs in of Ukraine and NCCIR creation whose Measurement of Telecommunications the radio broadcasting service. powers include state supervision over Networks Parameters with the Purpose observance of the telecommunications of State Supervision in the Field of The draft Decision was promulgated on legislation by the subjects of the mar- Telecommunications approved by the NCCIR official page in the Internet ket, use of radio frequency resource of NCCIR Decision of November 22, 2012 in order to receive comments and Ukraine in the public-frequency bands, No.608. propositions from physical persons and the necessity of development of nor- legal entities, their associations. mative legal acts on state supervision has emerged.

36 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.1. NCCIR regulatory activity 2.1.3 P reparation of the draft legislative and regulatory acts in the informatization area

In 2012 in pursuance of the instruction In addition in 2012 developed were: No.1/1-1759 on ensuring of implemen- of the President of Ukraine of July 3, ›› The draft Law of Ukraine On tation of information and computing 2012 No.1-1/1759 on implementation Amendments to the Legislative Acts technology in all spheres of public life, of information and computing tech- in the Sphere of Informatization of realization of the Open Government nology in all spheres of public life, Ukraine whose purpose was ensur- Partnership Initiative on the devel- realization of the Open Government ing of stable realization of the state opment of electronic government in Partnership Initiative on the devel- policy in the sphere of informati- Ukraine, the draft Order of the Cabinet opment of electronic government zation directed to coordination of of Ministers of Ukraine On Action Plan and corresponding instructions of the implementation of information and on Creation and Support of Functioning government in Ukraine, NCCIR devel- computing technology in the state of the Electronic Government Systems oped and submitted the draft Law of management and all spheres of (hereinafter referred to as the Action Ukraine On Amendments to the Law of public life, ensuring of system devel- Plan) were developed. Ukraine On the Basic Principles for the opment and implementation of elec- Development of Information Society tronic government technology, and The Action Plan was directed to the of Ukraine for 2007-2015 for consid- also enhancement of an institutional development of electronic democ- eration to the Cabinet of Ministers of status of the General State Customer racy for the sake of achievement of Ukraine. of the National Informatization the European quality standards of Program. In particular, the amend- electronic state services, openness The purpose of adoption of the draft ments to the Law of Ukraine On the and transparency of the authority for Law is improvement of quality of life National Informatization Program citizens, public organizations, busi- for citizens, creation of ample oppor- and the first part of Article 48 of the ness, and also creation of the basis for tunities for person’s satisfaction of Budget Code of Ukraine as regards participation of citizens in adoption of needs and free development, ensuring determination of the state authority state decisions, intensification of influ- of competitiveness of Ukraine, devel- with the functions of the General ence on formation and realization of opment of economic, sociopolitical, cul- State Customer of the National the state policy, decision of state and tural and spiritual spheres of public life, Informatization Program were local questions, intensification of trans- improvement of government system stipulated. parency and accountability of state on the basis of ICT use, the prevention ›› The draft Decree of the President authorities to the citizens and ensur- of threats arising in the information of Ukraine On Amendments to the ing of performance of the tasks and society. Certain Decrees of the President actions stipulated by the Decree of the of Ukraine whose purpose was President of Ukraine of March 12, 2012 The proposed changes provide, in distribution of the powers of state No.187/2012 On the National Action particular: authorities in the sphere of infor- Plan for 2012 on Implementation of the ›› correction of basic strategic pur- matization according to the Law Economic Reforms Program for 2010- poses, mechanisms and normative of Ukraine On the Concept of the 2014 “A Rich Society, A Competitive securing of the development of National Informatization Program Economy, An Effective State”. information society in Ukraine till and increase in efficiency of per- 2020 proceeding from its present formance of the functions by the The first step on the way to adjustment state of development; National Commission for the State of the Ukrainian space of identifiers ›› necessity of improvement of the Regulation of Communications and was the draft Regulations on the national system of parameters for Informatization by means of amend- Procedure of Formation of Space for estimation of the development of ments to the regulations for the Identification Codes of the Objects of information society and correspond- Ministry of Education and Science, Ukrainian segment of the World Space ing mechanisms of its monitoring Youth and Sports of Ukraine, the of Object Identifiers developed by in view of the all-European param- State Agency for Science, Innovation NCCIR. The purpose of development eters determined by the European and Informatization of Ukraine, the of this document was adjustment of strategy of economic development National Commission for the State the process of formation of space of “Europe 2020: Strategy for Smart, Regulation of Communications and identification codes for the objects of Sustainable and Inclusive Growth”; Informatization, and also to the the Ukrainian branch of world space ›› implementation of the new princi- Decree of the President of Ukraine of object identifiers, determination of ples for development of information of December 9, 2011 No.1085 On functions of the National Registration society in view of formation of the Optimization of the System of Body, description of procedures for models for consumption and produc- Central Executive Authorities. object identifiers reception, registration tion by means of determination and and recording. increase of ICT specific weight in the In order to ensure the performance of structure of modes of production; actions directed to the development ›› determination of institutional sup- of electronic government in Ukraine, port for coordination of activity of the National Commission for the State the state authorities on the develop- Regulation of Communications and ment of information society; Informatization in pursuance of the ›› necessity of creation of the cyber instruction of the First Vice-Prime security national system; Minister of Ukraine of July 12, No.2012 27289/1/1-12 to the instruction of the President of Ukraine of July 3, 2012

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 37 2.2 Approximation of the legislation of Ukraine in the area of communications and Informatization to the legislation of the European Union

In order to improve the legislation in the sphere of communications, creation of conditions for satisfaction of consumer demand in the state-of-the-art and quality telecommunications services, NCCIR carries out activity within its competence on bringing the legislation of Ukraine in the field of telecommunications to conformity with the legislation of the European Union.

2.2.1 Extension of the NCCIR powers

In pursuance of item 9 of Section І of application of the legislation on state The finalized draft Law of Ukraine On the Action Plan on Performance of the regulation in the field of telecommu- Amendments and Additions to the Law Nationwide Program for the Adaptation nications, regulates analysis of the of Ukraine On Telecommunications of the Legislation of Ukraine to the telecommunications services markets on Determination and Analysis Legislation of the European Union and its stages, extends the off-schedule of the Corresponding Markets of approved by the order of the Cabinet check bases, determines regulatory Services in the Sphere of Electronic of Ministers of Ukraine of March 28, obligations for telecommunications Communications which are a Potential 2012 No.156-p (hereinafter referred to operators and providers with an essen- Subject of the Expected Regulation as the Action Plan) in 2012 and with tial market advantage in the market of and Creation of Effective Mechanisms the purpose of promotion of develop- certain telecommunications services, in view of the received comments was ment of the open and fair competitive strengthens the importance of license approved and submitted in accord- telecommunications market on the through setting the impossibility of its ance with the established procedure basis of balancing of state, telecom- reception during the established term by the letter of December 28, 2012 munications operators and providers by business entity whose license was No.01-8535/14 for consideration to and telecommunications services users’ cancelled under separately determined the Cabinet of Ministers of Ukraine by interests by means of establishment reasons, terms for NCCIR consideration NCCIR Decision of December 27, 2012 of the market activity rules, the draft of tariffs (tariff plans) on rendering of No.685. Law of Ukraine On Amendments to the telecommunications services to users Law of Ukraine On Telecommunications submitted for coordination by telecom- In pursuance of item 11 of Section ІІ on Determination and Analysis of the munications operators and providers of the Action Plan NCCIR carried out Corresponding Markets of Services of who had an essential market advantage actions to support the draft Law of the Electronic Communications Branch in the markets of certain telecommuni- Ukraine On Amendments to the Certain which are a Potential Subject of the cations services. Acts of Ukraine on Regulation of Expected Regulation and Creation of Communications registration No.9747 Effective Mechanisms was developed. The above draft Law considers the of January 24, 2012 in the Verkhovna provision of Directive 2002/21/ЕС of Rada of Ukraine. On August 5, 2012 The above draft Law of Ukraine the European Parliament and Council of the above draft Law was adopted at specifies NCCIR powers on develop- March 7, 2002 on the joint legal frame- the second reading and as the Law ment of the Rules of the Provision works for electronic communications in whole. On September 4, 2012 the and Obtaining of Telecommunications networks and services that regulates President of Ukraine submitted his Services, imposition, change, cancel- the activity of regulatory bodies propositions to the Law which were lation or reservation of validity of the inclusive on analysis of the markets of registered in the Verkhovna Rada of regulatory obligations for telecommu- telecommunications services and the Ukraine of the VII convocation on nications operators and providers with principles of application of regulatory December 12, 2012 under No. 0991 an essential market advantage in the obligations. market of certain telecommunications services, giving of explanations on

38 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.2. Approximation of the legislation of Ukraine in the area of communications and informatization to the legislation of the EU 2.2.2 Analysis of the telecommunications services markets

According to the powers established working at the development of the Considering this the NCCIR experts by the legislation one of the NCCIR draft Procedure for Analysis of the according to the Laws of Ukraine key tasks in the field of telecommu- Markets of Certain Telecommunications On Telecommunications and On nications is analysis of the markets of Services and Definition of Information and in view of EU direc- telecommunications services by the re- Telecommunications Operators with an tive documents, the draft Procedure sults of which it is established whether Essential Market Advantage (hereinaf- for Submission of Reports and Other the corresponding market is effectively ter referred to as the Procedure). Information on Activity Performance competitive. If it is established that in by Telecommunications Operators and the market there is ineffective com- The purpose of adoption of the Providers (hereinafter referred to as the petition, operators with an essential Procedure is improvement of the Procedure) was developed. market advantage are determined, and normative legal basis in the field the well-founded decisions on appli- of telecommunications as regards The purpose of adoption of this cation of regulatory actions to them the establishment of organizational Procedure is improvement of a mech- are made in order to provide effective principles and a clear and transparent anism of submission of reports and competition. mechanism for analysis of the mar- information on activity performance kets of telecommunications services by operators and providers carrying NCCIR analyzes the markets of tele- including determination of the markets, out activity in the markets of certain communications services by a principle estimation of a competition state in the telecommunications services, and also of the preliminary (expected) regulation certain markets of telecommunications the establishment of forms of such (ex-ante) that stipulates an estimation services, determination of telecommu- reporting. of the future development of the mar- nications operators with an essential ket taking its state into account during market advantage in the markets, The draft Procedure was taken as the analysis. where economic competition is absent, a principle by NCCIR Decision of and imposition of the corresponding December 27, 2012 No.686 and prom- Ex-ante regulation enables to prevent regulatory obligations on such oper- ulgated on the NCCIR official website the use of market power in the future ators to improve the conditions for in order to carry out public discussion by operators with an essential market competition. and receive comments and propositions advantage in the market by imposing from the participants of the telecom- the corresponding regulatory duties on To analyze the markets a timely, objec- munications market. them. tive and reliable information base on a state and development of the market of The draft procedure passes examina- In view of the norms of the national certain telecommunications services is tion by the experts of the Commission legislation and EU directive docu- required. for Telecommunications Markets (СМТ) ments, the NCCIR experts have been within the Twinning Project.

2.2.3 T winning Project

Since March 2012 NCCIR began project partners are independent Ensuring the interstate procedure for realization of the Twinning Project regulatory bodies in the sphere of conclusion of international technical “Supporting Enhancement of NCCIR electronic communications of Spain, support contracts, the project was Regulatory and Legal Competence of Latvia and Sweden, namely: the registered in the Ministry of Economic the Regulation of Communications. Spanish Telecommunications Markets Development and Trade of Ukraine. Commission which is a senior partner From the beginning of the project the ЗThe overall goal of the project is and junior partners are the Latvian NCCR beneficiary was replaced with enhanced regulation of telecommu- Public Utilities Commission and the NCCIR as well as the permanent adviser nications sector in Ukraine according Swedish Post and Telecom Authority. of the project. to EU experience, best practice and corresponding EU acquis. The project is directly aimed at further development of effective regulation close to EU 2009 standards, additional enhancement of NCCIR possibilities of regulating the telecommunications market according to the rules and best practices applied in the independent regulatory bodies of the EU countries.

The project has been provided for 21 month, and will be completed by the end of 2013.

According to the Contract the NCCIR

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 39 2.2. Approximation of the legislation of Ukraine in the area of communications and informatization to the legislation of the EU

Considering the plans in the field of tel- Discrepancies between the Normative Markets and reception of the corre- ecommunications within the European Legal Basis of Ukraine and EU Member sponding recommendations on its integration aspirations of Ukraine, the Countries in the Sector of Electronic improvement was in the completion project included the three components: Communications was received. The stage. The draft report on the require- proximity of the legislation, imple- document analyzed functional aspects ments for data gathering to analyze the mentation of stimulating regulation of activity of the regulatory body of telecommunications markets was re- and organizational development and Ukraine, in particular application of ceived. Training visit I was made to the development of human resources. regulatory actions, support of finan- Spanish Telecommunications Markets cial independence; existing licensing Commission during which the detailed During realization of the first compo- system, guarantee of access, protection propositions and recommendations on nent the existing normative legal basis of users and an issue of networks neu- market data gathering and processing, of Ukraine in the sphere of electronic trality, management of radio-frequency analysis of the telecommunications communications was estimated on its spectrum issues. markets determined as priority. conformity with EU acquis communaitaire, and by the results of this work Except for the comparative analysis of As regards Component 3, the NCCIR the propositions to amend and supple- the legislation of Ukraine and EU, the draft Organizational Plan was devel- ment the national sectoral legislation report included recommendations on oped according to the schedule of were prepared. the development of necessary amend- works. In December 2012 the training ments and additions to the existing visit to Sweden was made. According to the second direction legislation which would meet EU NCCIR receives the support on deter- acquis communaitaire and consisted in Further Action Plan mination of the telecommunications enhancement of NCCIR responsibility markets, their analysis, determination (with granting of the corresponding According to the plan of works of the of operators with an essential mar- additional powers) in the sphere of Twinning Project within Component ket advantage and imposition of the regulation of the above areas. 1 on the basis of the Report on corresponding regulatory obligations Divergences the Roadmap for Further on them, and also formation of prices Twinning Project Intermediate Improvement of the Legislation of and calculation of interconnection cost Results Ukraine shall be developed. It will price, determination and implementa- become a substratum for the develop- tion of separate account. The main result within Component 1 ment of amendments and additions to of the Twinning Project is a working the normative legal field in the sphere In order to improve the aspects of variant of the Report on the Revealed of regulation of electronic communica- NCCIR organizational and person- Divergences between the Normative tions of Ukraine according to EU acqius nel management, the corresponding Legal Bases of Ukraine and EU in the communautaire. organizational plan of the Commission Sector of Electronic Communications including personnel training and submitted by the Latvian experts and, The obligatory results to be obtained development issues shall be devel- by the end of the accounting period it for Component 2 by the results of oped within the third component. The was in the stage of completion. Twinning Project performance are revi- attention was also paid to increase of sion of the list of telecommunications efficiency of NCCIR cooperation with Besides, in October the NCCIR experts markets for preliminary regulation, other state authorities, establishments made a training trip to the Public carrying out of regulatory analysis of and citizens. Utilities Commission (Latvia, Riga). the markets determined as priority, and revision and development of the Estimation of the Existing As regards Component 2 the recom- corresponding regulatory acts accord- Legislation of Ukraine in the mendations on regulation of retail pricing to determination of operators with Sphere of Communications and es, determination of business markets, an important market advantage in the Informatization by Foreign rendering of a universal service and markets and imposition of regulatory Experts segmentation of geographical markets obligations on them. The work in the were received from the Spanish ex- areas of cost price calculation and Within implementation of the perts. Processing of the draft Procedure determination and implementation of Project the Report on the Revealed for Analysis of Telecommunications separate accounting will also begin.

Within Component 3 of the Twinning Project it was planned to carry out a comparative assessment of the NCCIR current organization, development of human resources and career growth and to develop a basis for formation of the draft plan for improvement of professional training and development of human resources in NCCIR.

40 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.3 Registration and licensing

According to the first part of During licensing NCCIR is guid- Article 42 of the Law of Ukraine On ed by the Laws of Ukraine On Telecommunications NCCIR carries Telecommunications, On Radio out registration of business entities Frequency Resource of Ukraine and the in the sphere of telecommunications, following normative documents: keeps the Register Telecommunications 1. Licensing conditions for telecom- Operators and Providers. munications activity on rendering of fixed international, intercity, local According to the Law of Ukraine On telecommunications services with Telecommunications NCCIR licenses the right to telecommunications net- such kinds of telecommunications works maintenance and operation activity: and telecommunications channels 1. rendering of fixed telecommu- leasing approved by NCCIR Decision nications services with the right of December 10, 2009 No.1789 reg- to telecommunications networks istered in the Ministry of Justice of maintenance and operation and Ukraine on January 13, 2010 under telecommunications channels (local, No.19/17314; intercity, international) leasing; 2. Licensing conditions for telecom- 2. rendering of fixed telecommuni- munications activity on rendering of cations services with the use of fixed telecommunications services wireless access to telecommuni- with the use of wireless access to cations network with the right to telecommunications network with telecommunications channels (local, the right to local, intercity, interna- intercity, international) maintenance tional telecommunications channels and leasing; maintenance and leasing approved 3. rendering of mobile telecommuni- by NCCIR Decision of July 29, 2010 cations services with the right to No.348 registered in the Ministry telecommunications networks main- of Justice of Ukraine on August 16, tenance and operation and telecom- 2010 under No.688/17983; munications channels leasing; 3. Licensing conditions for telecom- 4. rendering of maintenance and op- munications activity on mobile eration services for telecommunica- telecommunications services with tions networks, on-air television and the right to telecommunications net- radio broadcasting networks, wired works maintenance and operation radio broadcasting and television and telecommunications channels networks. leasing approved by NCCIR decision of January 26, 2006 179 regis- According to the Law of Ukraine On tered in the Ministry of Justice of Radio Frequency Resource of Ukraine Ukraine on February 17, 2006 under NCCIR licenses the use of radio fre- No.145/12019; quency resource of Ukraine. 4. Licensing conditions for telecommunications activity on rendering of maintenance and operation services for telecommunications networks, on-air television and radio broadcasting networks, wired radio broadcasting and television networks approved by NCCIR Decision of November 11, 2010 No.513 registered in the Ministry of Justice

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 41 2.3. Registration and licensing

of Ukraine on November 30, 2010 Registration and Licensing of Providers, among them were 400 under No.1200/18495. Kinds of Activity and Proceeds operators and 197 providers. The 5. Licensing conditions for the use to the State Budget Register Telecommunications Operators of radio frequency resource of and Providers is placed on the NCCIR Ukraine approved by NCCIR Decision For 2012 NCCIR issued, reissued and website. of August 19, 2005 No.53 regis- prolonged 448 licenses for activity tered in the Ministry of Justice of in the sphere of telecommunications. As of the end of 2012 in Ukraine there Ukraine on October 20, 2005 under Among them NCCIR issued 286 licenses are 1769 operators who carry out activ- No.1237/11517. for kinds of activity in the sphere of ity in the sphere of telecommunications telecommunications to the sum of on the basis of the licenses for kinds of Licensing of Use of Radio 7,668.70 thousand UAH. 84 licenses activity. Frequency Resource of were reissued to the sum of 13.94 Ukraine and Proceeds to the thousand UAH, 179 copies of licenses State Budget were issued to the sum of 30.43 thousand UAH, 78 licenses were prolonged The radio frequency resource is used to the sum of 2,161.48 thousand UAH. on the basis of the licenses for use of the radio frequency resource and gives The total proceeds to the State Budget the right to a business entity to carry from the payment for issue, reissue, out the activity that provides RFR use issue of duplicates, copies of licenses for rendering of telecommunications for activity in the sphere of telecom- services. munications and their prolongation for the year 2012 made 9,874.55 thousand Other general users use the radio UAH. frequency resource on the basis of licenses for voice channels issued by the During 2012 597 business enti- National Television and Broadcasting ties were included in the Register Council, and/or permissions for the use Telecommunications Operators and of radio electronic facilities issued by the Ukrainian State Center of Radio Frequencies. Telecommunications Operators and Providers

For 2012 582 applications of business No. Kind of Activity Increased for Total as of entities on acquisition of the license for 2012 31.12.2012 RFR use were registered and processed. In the accounting period NCCIR adopt- 1 Issued, Reissued and Prolonged 448 2199 ed 47 decisions on an issue of licenses Licenses for Kinds of Activity, among for RFR use. 389 licenses for RFR use them are: were issued. Proceeds to the state Local telephone communications 110 647 budget made 175,037.391 thousand Intercity telephone communications 6 30 UAH. International telephone communications 1 8 International and intercity telephone As of December 31, 2012 there are 536 1 6 communications operators in Ukraine. They carry out Telephone communications with the use telecommunications activity with the 8 27 of wireless access use of radio frequency resource. Mobile telephone communications 0 20 Telecommunications networks mainte- At present the whole radio frequency 322 1432 nance and operation resource allocated for implementation of GSM and CDMA digital cellular 2 Entered in the Register 597 2970 radio communications is exhausted. Telecommunications Operators and Thus proceeds to the State Budget of Providers, among them are: Ukraine for licensing for RFR use in Telecommunications Operators, 2009, 2010 and 2011 gradually de- 400 2114 among them are: creased. In 2012 considerable proceeds to the budget were received owing to render Internet services with RFR use 59 312 prolongation of licenses for GSM and CDMA digital cellular radio communi- render Internet services without RFR use 248 358 cations. Proceeds to the state budget render other services 93 1444 for the use of radio frequency resource Telecommunications Providers, among increase steadily at the same time 197 856 them are: render Internet services 195 812 do not render Internet services 2 44 3 Entered in the Register of Postal 35 Service Operators

42 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.4 Radio frequency resource usage

Use of Radio Electronic The procedure for keeping the Register Facilities and Radiating was improved, and the forms of appli- Devices in the Territory of cation documents to be submitted for Ukraine receipt of the corresponding NCCIR decisions, in particular, application Since January 15, 2012 the new forms on determination of a possibility Procedure for the Register of Radio of application of new-type REFs or RDs Electronic Facilities and Radiating in the territory of Ukraine, on entry in Devices that could be used in the terri- the Register of new-type REFs or RDs, tory of Ukraine in the public-frequency on amendments to the Register, to bands was implemented. the form of REFs or RDs Performance Characteristics Card were also simpli- The new Procedure brings the legis- fied. lation of Ukraine nearer to the basic principles determined in the Directives NCCIR Decision of January 12, 2012 of the European Parliament and of the No.18 (with amendments) approved Council 1999/5/ЕС on Radio Equipment 49 generalized use conditions owing and Telecommunications Terminal to which the number of applications Equipment and the Mutual Recognition addressed to NCCIR on reception of of Their Conformity, 2000/299/EC on NCCIR individual decisions about deter- Creation of Initial Classification of Radio mination of a possibility of REFs appli- Equipment and Telecommunications cation was reduced. The manufacturers Terminal Equipment and Associated use these generalized use conditions Identifiers in view of the requirements placed on the NCCIR website to under- of the Technical Regulations of Radio stand which regulatory requirements Equipment and Telecommunications for REFs are suggested in Ukraine, Terminal Equipment approved by the and understanding of REFs operation decision of the Cabinet of Ministers of conditions is considerably facilitated for Ukraine of June 24, 2009 No.679. users in the territory of Ukraine. If REFs meet these generalized use conditions, The form of keeping the Register the applicant does not need to turn to was improved in view of the neces- NCCIR in order to receive an individ- sity of implementation of electronic ual decision or confirmation in NCCIR documents circulation and electronic on REFs availability in the territory to keeping the Register, possibilities Ukraine, and it is enough to refer to of information interchange with the these conditions. automated systems of the interested central executive authorities, general- ization and analytical data processing and others. The Register under the new form was approved by NCCIR decision of February 15, 2012 No.68.

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 43 2.4. Radio frequency resource usage

The use conditions or NCCIR individual REFs Number under Radio Technology, Division of New-Type REFs Entered in decisions required for an applicant to Whose Availability was Determined the Register (Production with REFs confirm REFs conformity in the sphere in 2012 Functions) by Kinds of use of radio frequency resource were generalized by means of certification, and since 2013 — by means of declaration of conformity with the 8 30 120 requirements of the Radio Equipment 203 and Telecommunications Terminal 1 64 3 1 Equipment Technical Regulations 1 30 approved by the decision of the Cabinet 1 11 6 of Ministers of Ukraine of 24.06.2009 21 No.679. 2 2 8 The number of adopted decisions on 24 40 107 10 individual applications to determine 8 13 13 311 26 55 1 declared REFs or RDs availability or 1 2 unavailability is: ›› 23 decisions on determination of availability of radio electronic Analog ultra-short wave radiotele- Cellular radio communication facilities (261 new types) in the phone communication territory of Ukraine; Short-wave radio communication ›› 2 decisions on determination of Analog short-wave radiotelephone unavailability of radio electronic communication Ultra-short wave radiotelephone facilities (11 types) in the territory communication of Ukraine. Direct analog ultra-short wave radiotelephone communication Trunking radio communication For 2012 997 new-type REFs and RDs were entered in the Register. Digital trunking radio communica- Indirect radio communication tion The new Procedure for keeping the Digital wireless telephony Register also provides an administrative Security and fire control system service recipient’s order of the method radiometry Wide-band radio access of receiving the message on adopted NCCIR decisions — to e-mail and/or Multiservice radio access Multichannel distribution systems postal address within Ukraine. Transfer data radio communication Mobile satellite radio communication Radio relay communication RRL of the line-of-sight transmission Radio-frequency rolling-stock identi- systems The Number of Messages which the fication devices at the railway Recipients of Administrative Services Telemetry, telecontrol and data Ordered to Receive to E-Mail or Postal Radiometry and radio control transfer Address Satellite radio communication Short radius of action of identifica- REFs entry (entry of amendments) tion and recognition systems in the REFs and RDs Register Digital cellular radio communication IMT-2000 (UMTS) Radio microphone and auxiliary Determination of new-type REFs acoustic radio equipment availability Digital cellular radio communication E-GSM, GSM-900, GSM-1800 Radio equipment of wireless personal audio systems Digital cellular radio communication CDMA-800, CDMA-450 Traffic and transport safety control

Broadband radio access and multi- Combined production 95 service radio access

Analog vocal speech

5 67 33

e-mail post

44 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.5 Numbering resource usage

The basic areas of NCCIR activity on the to 573 applications in 2012. In 2012 use of numbering resource are: the permissions for the use of 7,601.7 ›› enhancement of efficiency of the use thousand numbers of local telephone of numbering resource allocated to networks, 159 codes of SPC-7 network operators; signaling points, 6 codes of operators ›› systematization and regulation of of global telecommunications services abbreviated numbers of mobile and 5 national identification codes of communications networks; the fixed communications networks ›› further simplification of licensing were reissued. system for the use of numbering resource in the order established by NCCIR received 164 applications on the legislation. return of numbering resource. The number of operators that returned In 2012 NCCIR registered and pro- numbering resource during the cessed 875 operators’ applications in year made 35, 15 operators of them comparison with 8435 applications returned numbering resource with and 1017 applications in 2011 and capacity of 612.8 thousand numbers 2010 respectively. 74 applications on in connection with their decisions to allocation of numbering resource were terminate the activity on rendering of submitted by 50 operators. telecommunications services to users.

For 2012 at the sessions NCCIR adopted In order to protect the user rights and 818 decisions on numbering resource exclude the termination of rendering on the basis of which 487 permissions of telecommunications services NCCIR were issued to operators required for planned and carried out a necessary set the activity on rendering of telecom- of actions directed to settlement of the munications services with the use of stated problem within the legislation of numbering resource. Thus, 25 600 Ukraine. So during 2012 NCCIR carried numbers of local telephone systems, out a number of consultations, confer- 41 codes of SPC-7 network signaling ences of conciliation and negotiations points, five abbreviated numbers and to determine the operators that would one national identification code of keep on rendering the telecommunica- the fixed communications network tions services to users, the operators with exchange capacity up to 800 000 that made a decision to terminate the numbers (code «897» is allocated for activity on rendering of services with Kyivstar PrJSC) were allocated to opera- the use of pre-allocated numbering tors by NCCIR decisions. resource.

Proceeds to the general fund of the The actions used by NCCIR enabled State Budget for allocation of number- to provide timely informing of users ing resource made 1,175.2 thousand not later than three months prior to UAH for the accounting period. the date of termination of rendering of telecommunications services and Considering that during the year the make the corresponding decisions that legislation for the state regulation of determined the operators capable of numbering resource did not change, the organizational and technical provision operators had the decreased number with further rendering of services to of reasons to turn to NCCIR in order users with the preservation of the num- to reissue permissions for the use of bers pre-allocated to subscribers. numbering resource from 8220 in 2011

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 45 2.6 Telecommunications networks interconnection

Interconnection of telecommunications For the accounting period NCCIR networks for the period from the 1st carried out 12 meetings and nego- of January till the 31st of December, tiations with the operators, gave 57 2012 was regulated according to the explanations, made 14 decisions on Law of Ukraine On Telecommunications the regulation of interconnection of and the Rules for Interconnection of telecommunications networks. Public Switched Telephone Networks approved by the decision of the NCCIR gave 74 written answers to the National Commission for the State applications of telecommunications Regulation of Communications of operators and providers and other busi- Ukraine of December 8, 2005 No.155 ness entities on giving explanations registered in the Ministry of Justice about the interconnection of telecom- of Ukraine on January 27, 2006 under munications networks. No. 71/11945 (amended). For the accounting period the Astelit With the corresponding decisions LLC, Ukrtelecom PJSC and TriMob LLC NCCIR processed and approved 281 telecommunications operators turned propositions with a total capacity of to NCCIR for prejudicial settlement of 2071 of Е1 flow (among them are 28 disputes at interconnection of telecom- additional ones at the expense of unde- munications networks. clared interconnection with a capacity of 184 of Е1 flow). The Krymtel LLC telecommunications operator turned to NCCIR to regulate Propositions arrived from such tele- the relations with the Ukrtelecom PJSC communications operators determined as regards cancellation of the inter- by NCCIR as the operators with an connection contract. According to the essential market advantage in the operator’s application, NCCIR made a corresponding markets. number of decisions on protection of the user rights of the above operator. The above propositions were listed in the Catalogue of Propositions for 2012 and placed on the NCCIR website in accordance with the established procedure.

46 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.7 Tariff regulation and mutual settlements

Tariff Regulation in the Field nications services as increase of tariffs of Telecommunications for them was artificially suppressed in accordance with increase of expenses According to the Law of Ukraine On for the last 10 years. Telecommunications the authority for the state regulation in the field of Thus, tariffs for use of one phone for a telecommunications is the National rural subscriber compensate only 30% Commission for the State Regulation of of expenses for rendering of services. Communications and Informatization. Today telecommunications operators have to compensate for unprofitability Within the powers NCCIR carries out of services for such a branch as rural tariff regulation in the field of telecom- telecommunications supporting high munications by means of establishment indices of profitability of other services of the limiting or fixed tariffs for: redistributed owing to such a tariff pol- ›› public telecommunications icy to the operators who have no similar services; burden. Quality of communications ›› telecommunications channels worsens through stress of money, and leasing for telecommunications decrease in number of phones in the operators that occupy a monopo- village is observed through their disuse. listic (dominating) position in the market of these services; Considering that the cost price of ›› settlement rates for the services of public services increases constantly traffic transmission to the tele- owing to inflationary processes, in communications networks of the particular regarding the fuel, material telecommunications operators with and power supply expenses, and con- an essential market advantage in sumption decreases, the fixed (local) the certain market of traffic trans- telephone communications services, mission services or telecommuni- first of all, rural communications have cations operators who occupy a been unprofitable for the last years monopolistic (dominating) position for telecommunications operators who in the telecommunications market; render them. ›› telecom cable ductwork leasing for telecommunications operators. In this connection NCCIR prepared propositions on changes of tariffs Tariffs for Public for public telecommunications ser- Telecommunications Services vices discussed with the representatives of the Joint Representative According to the powers deter- Body of Trade Unions and the Joint mined by the Law of Ukraine On Representative Body of Employers Telecommunications the National within the Working Group (a trilateral Commission for the State Regulation of advisory body) on Development and Communications and Informatization Improvement of Limiting Tariffs for carries out tariff regulation of public Public Telecommunications Services telecommunications services. (NCCIR Order of May 4, 2012 No.52 On Approval of the List and Composition of Despite the increase of tariffs for the NCCIR Working Groups). services of local communications in 2011, they remained unprofitable for In order to make the tariffs for public telecommunications operators. It con- telecommunications services closer cerned, in particular, rural telecommu- to a level of their cost price under

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 47 2.7. Tariff regulation and mutual settlements conditions of preservation of availabil- Ukraine (hereinafter referred to as Considering the above and consider- ity of services for users, NCCIR made the Law) the powers of the National ing that the effective Tariffs do not a decision of June 21, 2012 No.308 Commission for the State Regulation of stipulate concrete articles to determine On Approval of the Limiting Tariffs for Communications and Informatization the cost for development (provision) of Public Telecommunications Services include establishment of tariffs for conclusions for possibility and condi- registered in the Ministry of Justice works (services) of the Ukrainian State tions of use of radio frequency resource of Ukraine on June 22, 2012 under Center of Radio Frequencies State of Ukraine for TV and radio broadcast- No.1031/21343 that came into force on Enterprise (hereinafter referred to as ing needs, and also calculation of a July 1, 2012. UCRF). theoretical zone of consistent reception of radio electronic facilities of TV and The result of change of the Limiting According to the legislation UCRF car- radio broadcasting, NCCIR adopted the tariffs for Public Telecommunications ries out effective use of radio frequency Decision of June 7, 2012 No.281 On Services is their stage-by-stage bring- resource of Ukraine in the interests of Approval of Tariffs for the Ukrainian ing to conformity with the principles of all user categories and groups, creation State Center of Radio Frequencies State tariff regulation determined by the Law of conditions for implementation in Enterprise Works (Services) connected of Ukraine On Telecommunications i.e. Ukraine and further development of with the development of conclusions bringing the tariffs for these services telecommunications technology with for possibility and conditions of use of to a level of their cost price under con- the use of radio frequency resource, radio frequency resource of Ukraine ditions of preservation of availability ensuring of electromagnetic compat- for TV and radio broadcasting needs of services for users, and also increase ibility of radio electronic facilities of registered in the Ministry of Justice of proceeds to the State Budget of any purpose used in public-frequency of Ukraine on June 26, 2012 under Ukraine and improvement of the results bands, and also special-purpose REFs. No.1070/21282. of telecommunications operators’ financial and economic activity. In order to observe the requirements UCRF formed proposed tariffs according of the legislation on the procedure of to the Procedure of Tariff Regulation Tariffs for Telecom tariff establishment NCCIR approved for the Ukrainian State Center of Radio Cable Ductwork Leasing the Procedure for Tariff Regulation Frequencies State Enterprise Works for Telecommunications for UCRF State Enterprise Works (Services). Operators. (Services) (hereinafter referred to as the Procedure) by the Decision of March 29, Tariff Regulation in the According to the powers deter- 2012 No.169 registered in the Ministry Sphere of Postal Service mined by the Law of Ukraine On of Justice of Ukraine on April 20, 2012 Telecommunications the National under No. 588/20901. According to the powers determined by Commission for the State Regulation of the Law of Ukraine On Postal Service Communications and Informatization The Procedure determines a mecha- NCCIR forms price policy and regulate carries out tariff regulation of the tariffs nism for tariff formation and establish- tariffs for universal services of postal for telecom cable ductwork leasing for ment for UCRF works (services), reasons service. telecommunications operators. for review and procedure of tariff change for the stated works (services). The universal services of postal service NCCIR calculated the tariffs for include the services on sending of post- telecom cable ductwork leasing Today effective are the tariffs for cards, letters, small parcels, sekograms for telecommunications operators Ukrainian State Center of Radio — ordinary and recommended; parcels in view of the requirements of the Frequencies State Enterprise works without statement of value with weight Procedure for Tariff Regulation (services) connected with the use of up to 10 kg. on Leasing of the Telecom Cable radio frequency resource of Ukraine Ductwork for Telecommunications and allocation of numbering resource Rendering of universal services of Operators approved by NCCIR Decision approved by the decision of the postal service in the whole territory of October 25, 2012 No.540 regis- National Commission for the State of Ukraine by state-regulated tariffs tered in the Ministry of Justice of Regulation of Communications of is provided by the national operator Ukraine on November 12, 2012 under Ukraine (hereinafter referred to as whose functions were imposed on the No.1901/22213. NCCR) of December 11, 2008 No.1256 Ukrposhta Postal Service Ukrainian registered in the Ministry of Justice of State Enterprise according to the order On November 29, 2012 Limiting Tariffs Ukraine on December 25, 2008 under of the Cabinet of Ministers of Ukraine for Telecom Cable Ductwork Leasing No1238/15929 (amended and supple- of January 10, 2002 No.10-p. for Telecommunications Operators were mented). approved by NCCIR Decision No.620 For the last time the Limiting Tariffs for registered by the Ministry of Justice of At the same time Article 24 of the Law Universal Postal Service were reviewed Ukraine on December 17, 2012 under was amended as regards the powers of in October 2011, and Amendments No.2093/22405 and came into force on the National Television and Broadcasting to the Limiting Tariffs for Universal January 1, 2013. Council of Ukraine (hereinafter referred Postal Service were approved by NCCR to as the National Council), namely: Decision of October 6, 2011 No.540 Tariff Regulation in the according to item 4 of this Article of the registered in the Ministry of Justice of sphere of Radio Frequency Law the National Council orders devel- Ukraine on October 12, 2011 under Resource opment of conclusions for possibility No.1178/19916. In view of the present and conditions of use of radio frequency economic situation the issue of review According to the Law of Ukraine resource of Ukraine for TV and radio of the universal postal service tariffs in On Radio Frequency Resource of broadcasting needs. 2012 did not raised.

48 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.7. Tariff regulation and mutual settlements

Mutual Settlements Operators with an Essential Market Advantage approved by NCCR Decision One of the main issues of regulation of of August 25, 2011 No.444 regis- interaction between telecommunica- tered by the Ministry of Justice of tions operators is creation of mutually Ukraine on September 13, 2011 under advantageous, equal, transparent No.1078/19816. According to the conditions of activity in the field of requirements of the above Procedure telecommunications; ensuring of NCCR analyzed the markets of traffic rendering of access and interconnec- termination services and determined tion services with the observance of operators with an essential market cost-effectiveness principles, attrac- advantage in the markets of traffic tion of investments and innovations termination services in the fixed and as well as maximum benefit for end mobile communications networks. users, ensuring of defrayal of operators’ expenses for rendering of the corre- In view of the data received from the sponding services. telecommunications operators on the current cost price of interconnection For a long time the controversial services NCCR approved the Settlement questions on economic conditions for Rates for the Services of Traffic interaction of telecommunications Transmission to Telecommunications operators raised often in the telecom- Networks of Telecommunications munications market. By their results the Operators with an essential market contracts between telecommunications advantage in the traffic transmission operators were not concluded, mutual markets approved by NCCR Decision of settlements were not carried out, there December 1, 2011 No.687 registered in was a constant threat of separation the Ministry of Justice on December 16, to the Public Switched Telephone 2011 under No.1462/20200 and came Network that could influence on quality into force on January 1, 2012. of telecommunications services and significant violation of user rights. In addition the Procedure for Mutual Settlements between In order to settle the relations between Telecommunications Operators telecommunications operators the Law was brought to conformity with of Ukraine On Amendments to the Law the amended Law of Ukraine On of Ukraine On Telecommunications Telecommunications (NCCIR Decision concerning the Market of Traffic of July, 9, 2009 No.1586 registered Transmission Teleservices of December in the Ministry of Justice of Ukraine 2, 2010 No.2751-VI was adopted. It on September 21, 2009 under determines traffic transmission market, No.880/16896 amended by the stipulates improvement of the nor- Decision of December 1, 2011 No.686 mative legal basis in the sphere of registered in the Ministry of Justice of telecommunications. At the same time Ukraine on December 16, 2011 under the Commission received the powers No.1461/20199). to carry out organizational and legal support of traffic transmission services, Owing to the work performed by the and also to determine the markets of regulator regarding establishment of traffic transmission teleservices, to settlement rates for traffic transmission carry out their analysis, to determine services for 2012 the economic condi- telecommunications operators with an tions for interaction did not make prob- essential market advantage, to estab- lems, therefore the telecommunications lish settlement rates for the services operators concluded interconnection of traffic transmission to the telecom- contracts without NCCIR assistance. munication networks of telecommunications operators with an essential market advantage in the markets of traffic transmission services or telecommunications operators that occupy a monopolistic (dominating) position in the telecommunications market.

To secure stability in the telecommunications market of Ukraine during interconnection of the different operators’ networks, the Commission developed the Procedure for Analysis of Markets of Traffic Transmission Services and Determination of Telecommunications

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 49 2.8 Public consultations

In 2012 NCCIR paid much attention to public representatives that was held on ensuring of transparency and open- December 7, 2012. ness of its activity. According to the Regulations on NCCIR approved by The Commission guided by the the Decree of the President of Ukraine corresponding provisions approved of November 23, 2011 No.1067/2011, the structure and management of and the NCCIR Rules in order to ensure the NCCIR Scientific and Technical effective work of the Commission and Council and the NCCIR Scientific Expert attract civil society institutes to giving Council with the Decision of December regular consultations on the issues of 27, 2012 No.689. The personnel of regulation in the sphere of infocommu- the NCCIR Scientific and Technical nications, Decision No.30 determined Council was formed from highly skilled the necessity of creation of NCCIR representatives of scientific institutes, consultative and deliberative bodies, higher educational establishments namely: the Scientific and Technical and other establishments, enterprises Council, the Scientific and Expert and organizations whose activity was Council and the Public Council. connected with the sphere of telecommunications. The NCCIR Scientific and The purpose of the NCCIR and deliber- Technical Council united scientists and ative bodies activity is ensuring of an experts who had long-term operational effective dialogue of the Commission experience in the telecommunications with the representatives of business area and strong relations with the circles, users of services, public associa- representatives of world community. tions, scientists, mass media etc. and These deliberative bodies were formed implementation of effective feedback. for consulting, scientific and expert The Commission approved the NCCIR support in case of decision of problem Public Council structure and manage- questions that raised during the regu- ment with the Decision of December lation in the sphere of communications 13, 2012 No.656. The corresponding and informatization, propositions on propositions were submitted to the improvement of the legislation in the NCCIR Head by the initiative group sphere of international cooperation according to the Regulations on Public in case of adoption of new normative Council and by the results of the legal acts and amendments to the decisions of the general meeting of the existing ones developed by NCCIR.

50 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.8. Public consultations

According to the Regulations on NCCIR an inquiry about acquisition of pub- in 2012 the Commission provided lic information promulgated on the promulgation of information on its official website of the Commission activity, carried out actions on adjust- with the following normative legal act, ment of a dialogue with the public the Decision of July 5, 2012 No.325 and creation of conditions for partic- On Approval of Forms for Making ipation of citizens in the process of an Inquiry about Public Information formation and realization of the state Acquisition registered in the Ministry policy. With the purpose of appro- of Justice of Ukraine on July 20, 2012 priate performance of this function under No.1224/21536. The Regulations NCCIR adopted the Decision of May on Public Information Accounting 31, 2012 No.267 On Approval of the System in NCCIR was approved by Procedure of Participation of Citizens the NCCIR Head’s Order of October of Ukraine and Foreign Citizens, 24, 2012 175/nk (нк). It establishes Representatives of Subjects of the general requirements for preserva- Communications and Informatization tion and access to public information Market, Public Organizations and by means of creation, functioning Mass Media in the Sessions of the and keeping the public information National Commission for the State accounting system being in the NCCIR Regulation of Communications and possession. The List of Kinds of Public Informatization (hereinafter referred Information Managed by NCCIR was to as the Procedure) registered in the approved by the NCCIR Head’s Order Ministry of Justice of Ukraine of June of November 16, 2012 No.201/nk (нк). 22, 2012 under No.1047/21359. The Since November, 2012 NCCIR provides above Procedure regulates an issue document registration, stable work of of organization of participation of the accounting system, promulgation of citizens of Ukraine and foreign citi- information in the accounting system zens, representatives of subjects of the on the NCCIR official website; giving communications and informatization access to the accounting system on market, public organizations and mass inquiries and a possibility of search, media in the sessions of the National view, reception of electronic copies for Commission for the State Regulation of users from the accounting system in Communications and Informatization whole or its part. in the form of public hearing on NCCIR invitation. According to the approved During 2012 the majority of NCCIR Procedure 52 persons — the represent- Decisions on approval of normative atives of core public organizations and legal acts was adopted after prom- mass media participated in the NCCIR ulgation of their drafts on the NCCIR sessions in 2012. official website for public discussion and consideration of public opinion. In pursuance of the Law of Ukraine On In total more than 20 draft normative Access to Public Information NCCIR legal acts in the sphere of communi- created mechanisms for realization cations and informatization approved of the right of everyone to access to after their completion by the results public information, personal right of public discussion were promulgated to collect, keep, use and distribute in 2012. NCCIR propositions on tariff information freely in order to ensure change for public telecommunications transparency and openness of its services were discussed with the repre- activity. Thus NCCIR Decision of June sentatives of the Joint Representative 21, 2012 No.310 On Implementation Body of Trade Unions and the Joint of the Law of Ukraine On Access to Representative Body of Employers Public Information in the National within the Working Group (a trilateral Commission for the State Regulation of advisory body) on Development and Communications and Informatization Improvement of Limiting Tariffs for was registered in the Ministry of Justice Public Telecommunications Services. of Ukraine on July 10, 2012 under No.1160/21472. This decision approves To increase efficiency of public the procedure of preparation and sub- consultations and partnership with mission of inquiries about public infor- businessmen in the sphere of commu- mation managed by NCCIR. During the nications and informatization during year 2012 the Commission gave timely the year NCCIR held repeatedly bi- and answers to 48 inquiries about public trilateral meetings and exchange of information received from citizens, views concerning improvement of legal legal persons and public associations regulation in the sphere of telecom- without a status of legal entity. munications, informatization, use of radio frequency resource, rendering of NCCIR approved the forms for making postal services etc. with the manage-

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 51 2.8. Public consultations ment of key public associations of the state authorities, local bodies with technology were discussed. The branch such as the Ukrainian Union citizens and business; Commission proposed basic areas of Manufacturers and Businessmen ›› On May 7, 2012 NCCIR concluded of cooperation on the improvement (UUMB), the Internet Association of the Memorandum of Partnership of legal regulation in the sphere Ukraine, the Association of Information and Cooperation with UUMB. The of telecommunications, informa- Technology Enterprises of Ukraine, the document included the issues of tization, use of radio frequency American Chamber of Commerce in cooperation on simplification of resource, rendering of postal Ukraine, the Telas Ukrainian Association access to the market of telecommu- services for creation of the com- of Communications Operators and nications services, adjustment of petitive market according to the other public associations. During the the list of administrative services, requirements of time and advanced year 2012 NCCIR received 40 official improvement of the procedure regulatory practices. inquiries or propositions from the of issue, reissue, cancellation of Ukrainian Union of Manufacturers and permits etc.; Such joint actions and public consulta- Businessmen, 32 — from the Internet ›› On June 25, 2013 NCCIR together tions contribute to the improvement of Association of Ukraine and 17 — from with the National Agency of priority areas of further work of NCCIR the Telas Ukrainian Association of Ukraine on Civil Service held the as a regulator in the sphere of commu- Communications Operators concerning round-table conference Uniform nications and informatization, acceler- the basic areas of regulatory activity of Information and Communications ated overcoming of so-called “digital the Commission on decision of prob- Platform of State Authorities gap” between the city and the village lem questions etc. NCCIR gave sound of Ukraine: Aspects of State as well as to the equal provision of all answers on the essence of the appeals Management. The final docu- levels of the population with at least in accordance with the terms estab- ment of the round-table confer- public telecommunications services lished by the legislation. ence underlined the necessity according to the Law of Ukraine On of development and proposition Telecommunications. The Head and members of the for public discussion of the draft Commission gave answers to the Concept of Uniform Information inquiries of public representatives, and Communications Platform of mass media during the briefings at the State Authorities as a normative Presentation of NCCIR Annual Report, legal act; other public actions on NCCIR initia- ›› On September 27, 2012 with tive and actions on market subjects’ support of NCCIR the International initiative. So, with NCCIR support a Forum ADCAIP-2012 took place number of joint actions took place. The (Around Data Processing Centers, issues on coordination of actions and Around IP) whose organizer was cooperation of official institutions, a the A-KOM Academy Training and private sector, diplomatic environment, Consulting Center. During this international financial organizations, action the important issues on nongovernmental organizations were development of cloud calcula- discussed for the development of econ- tions, engineering aspects of data omy and communications and informa- processing centers (DPC), cable tization branch. They were: networks of engineering systems of ›› On February 27-28, 2012 with buildings and their complexes, local support of Intel Corporation computer networks, data storage, and United States Agency for administration and information International Development (USAID) security networks and systems, NCCIR held a practical seminar IT services for business etc. were concerning creation of the Public discussed; Telecommunications Services Fund ›› On September 28, 2012 NCCIR sup- at which the issue on ensuring of ported the Third Ukrainian Internet universal service, strategic plan- Governance Forum (IGF-UA) ning as well as process of develop- devoted to the issues of regulation ment of the corresponding policy in the Internet, mechanisms of and analysis of the following steps partnership of authority, business was considered. By the results of and Internet community in the the meeting both parties came to development of information soci- an agreement on the necessity and ety, tools of counteraction to cyber- format of further cooperation; crime and Internet piracy, gave ›› On April 10, 2012 NCCIR and the coverage of the ways of implemen- Administration of State Service tation of electronic commerce and of Special Communication and electronic document circulation; Information Protection of Ukraine ›› During the year 2012 NCCIR par- held the round-table conference on ticipated in the meetings with the Realization of Uniform Information representatives of member com- and Communications Platform of panies of the American Chamber the State Authorities of Ukraine of Commerce in Ukraine at which devoted to the search of new forms the issues of development of and ways of interaction of the information and communications

52 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.9 Consumer rights protection

During the year 2012 2436 appeals The individual appeals made 99.0% Appeals Arrival to NCCIR during 2012 from individuals and organizations (2411 appeals). There were 25 collec- were submitted for NCCIR consider- tive appeals (1%). During the year 2012, ation. In comparison with 2011 the 2651 citizens (in view of collective 260 number of appeals increased by 1.5. appeals) turned to NCCIR. 10,7% 348 32 14,3% 1,3% The stated increase in number of 727 appeals that made 29.8% of the 26 appeals was caused by information and total number were received from the 1,1% advertising action of the Government citizens who had privileges established Contact Center Public Institution. by the legislation — invalids of the Great Patriotic War and the citizens 348 appeals of the total number of who demanded social protection and appeals arrived directly to NCCIR, 26 support. appeals arrived from the Administration 1770 72,7% of the President of Ukraine, 32 appeals Explanations and required information — from the Secretariat of the Cabinet were given to 1281 appeals (52.6%) of Ministers Ukraine, and 1770 appeals sent in the form of applications, peti- arrived from the Government Contact tions. 892 appeals (36.6%) had positive Directly to NCCIR — 14.3% Center Public Institution (through the decisions. 22 (0.9%) were sent to other government telephone hot line of the proper authorities. 32 appeals (1.3%) Administration of the President of Cabinet of Ministers of Ukraine). 260 were rejected in view of the Laws of Ukraine — 1.1% appeals were directed to NCCIR consid- Ukraine On Telecommunications and eration through other bodies, establish- On Appeals of Citizens. 209 appeals Secretariat of the Cabinet of Minis- ments and organizations. (8.6%) were in the stage of consid- ters of Ukraine — 1.3% eration by the end of the accounting 1737 appeals of the total number of period. Government Contact Center Public appeals (71.3%) made applications, Institution (through the government petitions, 670 appeals (27.5%) — com- The appeals on rendering of fixed tele- telephone hot line of the Cabinet of plaints, 29 appeals included propo- communication services made a major Ministers of Ukraine) — 72.7% sitions that made 1.2% of the total portion of 44.2% (1076 appeals) in the number. total number of appeals. The major- Through other bodies, establishments and organizations — 10.7%

Dynamics of Appeals Arrival during 2009-2012 Structure of Appeals by Kinds of Services for 2012 (Number of Appeals) (Number of Appeals)

3000 1 — Fixed telephone communication; 1200 2436 1076 2 — Mobile communication; 3 — Telegraphic communication; 4 — Wire broadcasting; 5 — Access to the Internet; 900 2000 6 — On-air broadcasting; 7 — Services for the 1587 needs of television and broadcasting; 1307 600 8 — Postal service; 9 — RFR use sphere; 464 10 — Other issues 1000 881 371 300 271 99 56 70 1 2 20 0 0 2009 2010 2011 2012 1 2 3 4 5 6 7 8 9 10

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 53 2.9. Consumer rights protection

ity of appeals from consumers of the ment with withdrawal of money from The diagram shows the structure of stated kind of services was as regards their personal accounts, organization of appeals by kinds of services for 2012, long-term absence of communication, rendering of services, absence of access and in comparison with the years 2011, disagreement with the amount of to services (coverage, phone number 2010 and 2009. payment in invoices for telecommu- blocking) and tariff plan (conditions) nications services, organization of changes. During the year 2012, 322 citizens rendering of telecommunications ser- turned to the NCCIR Public Reception. vices, poor-quality telecommunications, In the appeals on rendering of wire Besides, during the year 2012 13 procedure of invoice reception, phone broadcasting services (371 appeals appeals were received by phone 569- connection (disconnection). or 15.2%) the majority of consumers 71-01 through the telephone hot line complained about long-term absence for appeals of citizens that had been 19% (464 appeals) of the total num- of rendering of services and disagree- working on each Wednesday from 11 ber made appeals on organization of ment with tariffs for wire broadcasting a.m. to 1 p.m. The NCCIR experts gave rendering of mobile communications services. the corresponding explanations for the services. In their appeals the consumers issues the citizens touched upon in the touched upon the issues on disagree- 271 appeals (11.1%) were in connection telephone mode. with rendering of Internet access ser- Results of Appeals Consideration vices. The consumers touched upon the In the course of consideration of issues on connection to the Internet, appeals, NCCIR processed thoroughly poor-quality granting and long-term the information of telecommunica- absence of access to services, disagree- tions operators and providers on the ment with the amount of payment in issues touched upon by the citizens. In invoices, organization of rendering of addition, during the year 2012 within 892 Internet access services. the realization of state supervision over 36,6% telecommunications market, during 56 appeals (2.3%) were received from the scheduled checks on observance 1281 52,6% the postal service consumers. The of the telecommunications legislation appeals touched upon the issues on by market subjects, the NCCIR officials organization of rendering of services, checked 196 telecommunications oper- 32 209 1,3% search of postal items, disagreement ators and providers on the procedure of 8,6% with the amount of postal service organization of work with the appeals 22 tariffs and the procedure of tariff appli- of citizens. The corresponding meas- 0,9% cation. ures were taken by the results of these checks. Given explanations, required infor- 70 appeals (2.9%) touched upon the mation; use of radio frequency resource. The majority of appeals touched upon the Sent to the other proper authority, procedure of REFs and RDs use (regis- establishment or organization for tration) and use of ІМЕI codes, legit- consideration; imacy of REFs installation and REFs radio frequency interference. Rejected (petitions, inquiry, com- plaint);

In the stage of consideration (decision) by the end of the accounting period

Resolved positively Structure of Appeals by Kinds of Services for 2009-2012 (Number of Appeals)

1 — Other issues; 2 — Propositions to legislation; 3 — RFR use sphere; 1076 4 — Postal service; 5 — Services for the needs of television and broadcasting; 6 — On-air broadcasting; 7 — Access to the Internet; 8 — Wire broadcasting; 863 9 — Telegraphic communication; 10 — Mobile communication; 11 — Fixed telephone communication 736

464 487 2009 2010 2011 2012 371 271 203 156 159 198 116 140 99 71 70 98 81 65 46 52 37 54 56 60 25 0 0 0 6 31 17 22 20 20 1 3 3 2 27 1 1 2 1

1 2 3 4 5 6 7 8 9 10 11

54 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.10 State supervision in the area of communications

Відповідно до пункту 3 Положення are included in the Register of In compliance with the provisions of telecommunication providers and Paragraph 1 of the Enactment of the operators — 250; National Commissions for the State 2. users of RFR of Ukraine: Regulation of Natural Monopolies in ›› economic entities rendering tele- the Sphere of Communication and communications services under the Informatization one of the objectives license for using RFR — 533; of NCCIR is the state supervision in the ›› users of RFR for television and field of telecommunications, informa- radio broadcasting needs — 1593; tization, the use of radio frequency ›› technology users — 6166. resource, rendering postal services. In total: 8292 RFR users

To perform the tasks of the sate Among them, 1237 economic entities supervision, a special structural entity of the telecommunications market and — the Department of State supervi- 251 users of RFR were subject to a sion — was established in NCCIR. The scheduled inspection. peculiarity of the state supervision activities in 2012 was that NCCIR paid In 2012, the number of carried out much attention to performing sched- state supervision measures for the uled inspections of telecommunications activities of the communication mar- operators and users of radio frequency ket entities is: resource rendering services to a large ›› regarding the observance of legis- number of customers on a national lation on the telecommunications scale and whose activities influence by telecommunications market greatly the quality of telecommunica- entities tion services rendered to consumers. ›› regarding the observance of the In this connection, almost a quarter legislation on RFR of Ukraine of the total time duration of the state — 987; supervision activities was spent on ›› regarding sales of radio electronic scheduled inspections of four telecom- facilities (REFs) — 21; munications market entities and users ›› regarding the observance of the of the radio frequency resource (RFR) legislation on RFR of Ukraine by of Ukraine (limited liability companies separate units of economic entities “International telecommunications”, of the telecommunications market “Golden Telecom”, “Astelit” and the and RFR users — 50. private company “Kyivstar”). In total: 1335 measures.

Carried out state supervision The number of carried out in 2012 the measures and revealed state supervision measures distributes violations by types of inspections as follows: ›› scheduled inspections of activities On the reporting period following par- of the telecommunications market ticipants of the telecommunications entities, users of radio frequency market and users of RFR of Ukraine resource of Ukraine — 522 and their performed their activities: separated units — 50; 1. entities of the telecommunications ›› unscheduled inspections of market that are included to the activities of the telecommunica- licensing register of telecommunications market entities and users tions operators — 1714; of radio frequency resource of telecommunications providers that Ukraine — 155; and their separated

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 55 2.10. State supervision in the area of communications

units — 50; at that, 74 % — by Carried out in 2012 the state super- 2. 637 violations of legislation on the applications. vision measures concerning telecom- use of RFR of Ukraine, including: munications market entities rendering ›› requirements of the Law of Ukraine To remedy the violations in the field telephone communication services On Radio Frequency resource of telecommunications and use of distribute as follows: — 143; radio frequency resource of Ukraine by ›› The telecommunications market ›› special conditions of license — 25; economic entities and natural persons entities that operate at more than ›› licensing conditions — 163; that are not included in the Register of 50% of the territory — 8; ›› work without permits for operation telecommunication providers and oper- ›› The telecommunications market — 229; ators and render telecommunications entities that operate at less than ›› the Regulations on Provision of services using RFR without a license 50% of the territory — 188; Conclusions on Electromagnetic and operate the REFs without permits Compatibility — 19; to operate, 608 joint measures were Carried out in 2012 the state supervi- ›› the procedure of REFs and RDs organized and carried out to prevent, sion measures regarding users of RFR sales — 5; detect and remedy the violations of that operate REFs under permits to ›› other violations — 34. legislation in the field of communi- operate distribute as follows: cations and use of radio frequency ›› licensees on the telecommunica- Following the state supervision meas- resource of Ukraine with law enforce- tions market — 157; ures we drew up: ment and other public authorities. ›› distributors of television and radio ›› 1285 inspection acts and In total: 1335 measures. broadcasting programs — 18; certificates; ›› technology users — 151. ›› 520 reports on committing In total: 326 measures. administrative offenses under the Articles of the Code of Ukraine on In addition, in 2012 the Department of Administrative Offences (hereinaf- State Supervision worked on creating a ter referred to as CAO): database of manufacturers and suppli- ›› art. 145 — 215 (violations of licensing ers of telecommunications equipment, conditions); Comparative data for 2012 and 2011 on REFs and radiating devices (RD) sellers. ›› art. 146 — 237 (violation of the rules the total number of the state supervision on sales, operation of REFs and RDs measures by kinds of activity Increasing the percentage of carried and also of the use of radiofrequency out state supervision measures in the resource of Ukraine); field of using RFR is due to increas- ›› art. 147 — 3 (violation of the rules ing the number of subjects rendering on protecting communication lines or services of access to the Internet using structures); 10,5% a broadband signal (radio access) with ›› art. 148-2 — 53 (violation of the pro- the violations of legislation, that indi- cedure and conditions of rendering cates the growth of consumer demand telecommunications services in the for this kind of services and as a result, networks of public use); the interest of telecommunications ›› art. 148-4 — 2 (using technical facili- 34,2% 55,3% market entities in making profits when ties and equipment applied in public rendering such services in spite of the telecommunications networks without violation of the law requirements. a documentary proof of conformity); ›› art. 164 — 1 (violation of economic On performing the state supervision activities procedure); measures the following was revealed: ›› art. 188-7 — 9 (non-performance of 2011 1. 517 violations of legislation on tele- legal requirements (binding guide- communications, including: lines) of officials with regard to rem- ›› requirements of the Law of Ukraine edy the violations of legislation). On telecommunications — 204; 1,6% ›› license conditions — 151; During 2012, to remedy revealed vio- 21,6% ›› special license conditions — 4; lations following the state supervision ›› the Rules of Interconnection measures we issued: between Public ›› 136 binding guidelines with regard Telecommunications Networks to remedy the violations in the field — 19; of communications; ›› the Rules of the Provision and ›› 96 orders to remedy the violations Obtaining of Telecommunications of licensing conditions of the use of 76,8% Services — 32; radiofrequency resource of Ukraine ›› the Provisions for Quality of and to remedy the violations in the Telecommunications Services — 12; field of telecommunications; 2012 ›› the Provisions of State Regulation of Numbering Resource of Public In pursuance of binding guidelines TC market entities Telecommunications Network of (orders), during 2012, 72 % of the total Ukraine — 24; number of revealed violations were REFs sellers ›› other violations — 78. remedied.

RFR users

56 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.10. State supervision in the area of communications

Measures of the state of legislation on the frequency The joint measures together with supervision of the resource of Ukraine were issued; officers of MIA resulted in: telecommunications market ›› 63 orders to remedy the violations ›› discontinuing operation of 310 ille- of licensing conditions of the use of gally operating transmitters; During 2012 277 measures of the state radiofrequency resource of Ukraine ›› seizing 148 illegally operating REFs supervision over the observance of tel- were issued. and RDs; ecommunications legislation by market ›› discontinuing sales of 100 mobile subjects were carried out. As a result of consideration of cases phones; of administrative offenses related to ›› drawing 131 reports on an admin- Basing on inspection findings: violations of legislation in the field istrative offense under Article 146 ›› 160 reports on an administrative of communications that were fixed of the CAO by authorized officials of offense were drawn up under CAO by reports on administrative offenses NCCIR; by operators of the telecommunica- under the Articles 145, 146, 188-7 ›› according to the results of the judg- tions market (under art. 145 — 96, of CAO, 173 court resolutions were ments, the courts gave 47 resolutions under art. 147 — 3, under art. 148-2 made. As a result of the application of of penalty applications for the overall — 53, under art. 148-4 — 2, under administrative penalties (fines) under amount of 32.3 thousand UAH. art. 164 — 1; under art. 188-7 — 5); the mentioned resolutions the State ›› 74 binding guidelines with regard Budget of Ukraine received UAH 213.91 Among the 602 economic entities that to remedy the violations of legisla- thousand. applied during 2012 to the NCCIR for tion on telecommunications were including them into the register of issued; Sanctions and penalties as a operators, telecommunications provid- ›› 33 orders to remedy the violations result of state supervision ers there are entities that applied for of licensing conditions in the field including them into the register as a of telecommunications were issued; Upon consideration of reports on result of the joint measures. administrative offences for which According to the results of considera- penalties are provided in Articles 145, Processing consumers’ tion of cases of administrative offenses 147, 148-2, 148-4, 188-7 of CAO, 238 requests regarding the related to violations of legislation on resolutions on the imposition of fines quality of services telecommunications that were fixed amounting to UAH 360.77 thousand by reports on administrative offenses were given. In pursuance of resolutions The measures of state supervision under the Articles 145, 147, 148-2, 148- for 2012 the State Budget of Ukraine under consumers’ requests were carried 4, 188-7 of CAO, 126 court resolutions received UAH 324.53 thousand of paid out to establish the facts of the viola- were made. As a result of the applica- fines. tions of legislation on telecommunication of administrative penalties (fines) tions by telecommunications operators under the mentioned resolutions the The materials of 242 cases under art. rendering telecommunications services State Budget of Ukraine received UAH 146 of CAO were forwarded to courts. and by users of RFR of the violations of 168.87 thousand. According to the results of court legislation on radio frequency resource judgments on the cases of administra- of Ukraine and to take on their results Upon consideration of 1 case on admin- tive violations under art. 146 of CAO, relevant measures of administrative istrative offenses under Art. 164 of CAO administrative sanctions in the form influence on officials responsible for the court imposed an administrative of penalty were applied for the overall committing them. penalty of a fine total UAH 340. amount of, of which 7 cases with the confiscation of REFs and RDs in the Upon written applications about the Measures of state supervision number of 14 units. violations of legislation, standards and over the use of radio other normative documents in the fields frequency resource of The total amount of fines paid during of telecommunications and the use of Ukraine in radio frequency 2012 is UAH 397.76 thousand. radio frequency resource of Ukraine public bands under the Decisions of NCCIR there Joint measures and their were 130 unscheduled inspections During 2012 1,008 measures of state results held: 64 unscheduled inspections of the supervision over legislation on the telecommunications market entities, of radio frequency resource of Ukraine To remedy the violations of legisla- which 4 — upon the requests of natural and the observance of business entities tion in the field of communication by persons and 66 unscheduled inspec- realizing REFs and RDs under the set economic entities and natural persons tions of the users of RFR, of which 1 procedure of sales were carried out. who are not subjects of the telecom- — upon the request of a natural person, munications market and users of RFR and 1 — upon the request of a deputy Basing on inspection findings: under the law, to protect RFR licen- of Ukraine. ›› 360 reports on committing an sees from subjects who illegally use administrative offense by officials the radio frequency resource, NCCIR There were 5 unscheduled inspections of RFR users and economic entities organized and held 608 joint measures held upon the complaints regarding who realize REFs and RDs were to prevent, detect and remedy the services quality filed to NCCIR. drawn up, under penalties provided violations of legislation in the field of in CAO (under art. 145 — 119, under communications and use of radio fre- The main issues discussed during art. 146 — 237, under art. 188-7 quency resource of Ukraine with law inspections were the issues of accuracy — 4); enforcement bodies and other public of the payment charged for the services ›› 62 binding guidelines with authorities (hereinafter referred as the rendered in roaming, legality of the regard to remedy the violations joint measures). construction and operation of mobile

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 57 2.10. State supervision in the area of communications base stations of telephone communi- on improvement and reduction of NCCIR on the implementation of state cation and observance of legislation in and duration of the activities of state supervision measures, the level of Law while providing broadband access to supervision. At that, the decrease in observance in the field of communica- the Internet. the number and duration of planned tion in 2012 remains practically at the activities was not to lead to worsening level of 2011. Organization of state market quality of telecommunication services supervision rendered to consumers of telecommunications services and increasing the To implement the Sector Policy number of violations. Support Programme ‘Promoting mutual trade by removing technical The concentration of state regulatory barriers to trade between Ukraine and and supervisory functions in a single the European Union” and pursuant to public body, namely that of NCCIR, the Law of Ukraine On State Market significantly contributed to conduct- Supervision and Control of Non-food ing actions of state supervision at the Products on ensuring an equivalent appropriate level and assuming meas- level of protection of citizens within ures on their results. the internal market and uniform regulatory framework for economic entities, Analysis of the results of state super- NCCIR developed a draft action plan on vision for 2012 shows, that there is an the implementation of the law. average of 1.6 violations per action. Over the same period of 2011 there In pursuance of this plan, initiated were 1.3 violations. by NCCIR, the relevant resolutions of the Cabinet of Ministers of Ukraine It should be noted that a significant concerning the list of bodies of the number of them were committed on state market control, the scope of the market of broadband Internet their responsibility and the Technical access, including those using broad- Regulations for radio equipment and band signal (radio access), reflecting telecommunications final (terminal) among consumers the demand for this equipment were amended. kind of service and requires a greater attention to this service area, as cur- In pursuance of the Resolution of rently, the legislation does not regulate the Cabinet of Ministers of Ukraine the possibility of imposing penalties for of December 26, 2011 No 1410 On administrative offenses on individual approval of the Development Procedure entrepreneurs, under Article 145 of the and Revision of Sectoral Plans of CAO Market Supervision, Monitoring and Reporting on Their Performance, pro- The above data indicate that reduc- posals to the State Customs Service of ing the number of State Supervision Ukraine were submitted to the Plan of actions hardly led to a decrease in the product control for 2013. number of detected violations in 2012 compared to the same period in 2011, NCCIR approved the Sector Plan of as a considerable number of unsched- State Market Supervision for 2013 by uled inspections of reporting were held its Decision of November 22, 2012 № in 2011. 613. The number of remedied violations in Evaluation of Law 2012 of the total number of revealed performance in the field of violations is 72%. The number of communications remedied violations in 2011 of the total number of revealed violations is 79%, Planning and implementing measures which may be also due to the large of state supervision in the field of number of remedied violations regard- telecommunications and the use of ing non-provision of reporting which radio frequency resource of Ukraine were revealed in 2011. in radio frequency bands of public use on observance of legislation in Among the economic entities that these areas by the telecommunications applied during 2012 to the NCCIR for market entities and by the users of RFR, including them into the register of NCCIR followed the requirements of operators, telecommunications provid- the Decree of the President of Ukraine ers there are entities that applied for of March 12, 2012 No187/2012 On the including them into the register as a National Action Plan for 2012 to imple- result of the joint measures for legali- ment Economic Reform Programme zation of their activities. for 2010-2014 Prosperous Society, Competitive Economy, Effective State So, thanks to the work conducted by

58 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.11 International cooperation and European integration

During 2012 NCCIR performed its inter- development, obtaining an objective of ITU. One of the most important events national activities within the bounds of analysis of trends in the development has become the regular (12th) Global ensuring the fulfillment of the conferred of telecommunications of the CIS and Symposium for Regulators (GSR) of ITU, on the Commissions tasks. Eastern European countries and an held in October in Colombo (Sri Lanka). exclusive expert assessment of the One of the main activities was active situation in the telecommunications At the same time during the year the participation in the sectoral international market directly from the leaders of the priority area of NCCIR was to prepare and regional organizations, including: industry. More than 200 participants the position of Ukraine to ITU World the International Telecommunication from 15 countries took part in the event, Radiocommunication Conference 2015 Union (ITU), the European Conference of including representatives of leading (WRC-15), under which the following Communications Administrations (CEPT), international and regional branch organ- activities were carried out: the Regional Commonwealth in the Field izations and global telecommunications ›› representatives of the Commission of Communications (RCC) and others. companies, the first persons of nation- took an active part in the activities The work in this direction was aimed at al regulators of the CIS and Eastern of the Interagency Working Group promoting the development of communi- European countries. on preparation for ITU WRC-15; cation and informatization branch, public ›› in September on the base of UCRF interest defence and fulfillment of the Besides organizing the Forum, the the first meeting of the RCC Working tasks and functions assigned to the NCCIR. representatives of NCCIR took an active Group on radio frequency spectrum part in the following ITU events: the management was held, in which the As part of membership in the ITU, the World Radiocommunication Conference representatives of Communications highest formal institution in the field of 2012 (WRC-12) — January — February, Administrations of 7 RCC mem- communication, NCCIR performed the Geneva (Switzerland), the World ber countries took part, and in following activities. Telecommunication Standardization December — the meeting of RCC Assembly (WTSA-12) — November, Working Group on preparation for In 2012, an important event for the Dubai (UAE), the World Conference the Radiocommunication Assembly region was the Interregional Forum on International Telecommunications and World Radiocommunication of ITU “Current Regulatory Issues in (WCIT -12) — December, Dubai (UAE), Conference of 2015, which was the Area of Telecommunications and the World Radiocommunication Seminar attended by the representatives of Radio Frequency Resource Usage for 2012 (WRS-12) — December, Geneva Communications Administrations of CIS Countries and Europe”, which was (Switzerland). 9 RCC member countries; organized and held by NCCIR together ›› NCCIR delegation took part in the with ITU on September 11-13, 2012 in Also, NCCIR continued activities within meeting of the Joint Task Group Kyiv. The forum has become a platform the framework of international coopera- 4-5-6-7 agenda items of the World for practical experience exchange of ICT tion of regulatory bodies in the structure Radiocommunication Conference

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 59 2.11. International cooperation and European integration

(WRC-15), 1.1 and 1.2 of the ITU ›› the participation of NCCIR dele- European integration Radiocommunication Bureau in gation in the 7th meeting of the November in Geneva (Switzerland). UN Internet Governance Forum ВAs part of the preparation for the sign- IGF 2012 “Internet Governance ing of the Association Agreement be- NCCIR also took an active part in the for Sustainable Human, Social tween Ukraine and the European Union elaboration of positions within regional and Economic Development”, that (hereinafter referred to as Agreement) associations (CEPT, RCC): took place in November in Baku during the mentioned period a compre- ›› during the participation in the activ- (Azerbaijan). hensive analysis of the provisions the ities of CEPT, UCRF focused on re- Draft Agreement was made. This docu- searches carried out by the Working One of the most successful events ment was provided necessary measures Group Frequency Management in 2012 may be considered the 25th in the context of the reform of indus- (WGFM), the Group on preparation Congress of the Universal Postal Union tries, including institutional changes. for WRC-15 (CPG) and the Working (UPU) that took place in October in Group on numbering and networks Doha (Qatar), in the delegation of We ensured the coordination of work (WGNaN); NCCIR which took part. The congress on the implementation of “Information ›› in November, in UCRF the 38th assembled plenipotentiaries of the 156 Society” measures of the Ukraine — EU meeting of the Project CEPT Group UPU member countries. One of the Association Agenda. on radio frequencies monitoring major events of the Congress was the and observance of legislation (FM election of the Director General of UPU In pursuance of the priority of the PT 22) was held, in which the International Bureau and his Deputy, as Ukraine — EU Association Agenda on representatives of Communications well as members of UPU — Council of strengthening the independence and Administrations of 26 CEPT member Administration and Postal Operations administrative capacity of the national countries took part. Council. As a result of effective meas- regulator in the communication industry ›› the NCCIR specialists made a major ures undertaken by Ukraine’s diplomatic we launched the practical implementa- contribution to RCC activities. In corps and active campaigning on the tion of Twinning project “Supporting en- September they organized and part of the delegation of Ukraine during hancement of the Regulatory and Legal held in Kyiv the 6th meeting of the informal meetings and negotiations at Competence of the National Commission Commission on Coordination of all levels, Ukraine was elected into both for Communications Regulation of the Activity of Regulatory Bodies executive boards of UPU, that certainly Ukraine regarding Telecommunications in the Field of Communications in improves the image of the state among Sector Regulation”. The purpose of this RCC. Besides organizing events, the UN institutions. project is strengthening of the inde- NCCIR representatives took part in pendence and administrative capacity of the work of the joint 47th session Thus, it can be noted that the geogra- the national body in the field of commu- of the Board of the Communications phy of active cooperation within the nications regarding the telecommuni- Administrations Heads of the telecommunications industry has spread cations regulation. During the reporting Regional Commonwealth in the field on 20 countries: Azerbaijan, Armenia, period a number of expert missions of Communications and the 18th Belgium, Croatia, Great Britain, Jordan, were held in the following areas: legis- session of the Coordination Council Kyrgyzstan, Korea, Latvia, Moldova, lative approximation, implementation for Informatization of the CIS states Norway, Poland, Slovenia, Turkey, of incentive regulation, organizational attached to RCC. Sweden, Switzerland, Sri Lanka, Spain, development and human resource Qatar, UAE development. Three meetings of the Within the spread of responsibilities of Project Supervisory Board were held. the national regulator on IT industry Besides this, during the reporting during the reporting period the follow- period NCCIR experts participated in The experts of NCCIR were involved in ing international events on ensuring the preparation of telecommunications performing tasks and activities from the development of the information society chapters within the preparation of free chapter “Information Society” of the in Ukraine were made: trade agreements with a number of Association Agreement between Ukraine ›› the participation of NCCIR delega- countries that are trade and economic and the EU. Besides the expert work our tion in the World Summit on the partners of Ukraine, namely: Canada, officers were involved in the negotia- Information Society (WSIS) Forum, Israel, Lebanon, Montenegro, Serbia, tions within the governmental delega- held in May in Geneva (Switzerland); Turkey etc. tion in the work of the Subcommittee №

60 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 2.11. International cooperation and European integration

7 “Science and Technologies, Research to strengthen bilateral cooperation with a project of evaluation of the telecom- and Development, Education, Culture, regulatory bodies of CIS countries. munications market development in Public Health, Information Society and Ukraine. To this document “The EBRD Media of the Cooperation Committee Thus, on April 5, a Memorandum of co- Assessment 2012: Recommendations Ukraine — EU”. operation in the field of communications for Policy Development, Legal and regulation between NCCIR and Public Regulatory Framework,” a draft of which One of the mainstreams of regional Services Regulatory Commission of the was submitted at the Second EBRD cooperation for NCCIR in the framework Republic of Armenia was signed. In pur- Regional Electronic Communications of European integration processes is suance of its provisions, the represent- Conference in Jordan (Amman) in engaging in activities of the EU Initiative atives of NCCIR made a working visit to September 2012, a number of propos- “Eastern Partnership”: the Armenian regulator for negotiations als were sent for updating information ›› the representative of NCCIR took with its leaders, exchange of experience about the state of the sector of informa- part in the seventh meeting of the in the field of regulation of electronic tion and communication technologies thematic Platform 2 on Economic communications markets. (ICT) in Ukraine and the results of NCCIR integration and convergence with in the area of perfecting and improving EU policies which was held in As part of continuing cooperation with the regulatory environment of telecom- May in Brussels (the Kingdom of regulatory bodies of the partner coun- munications industry and electronic Belgium); tries visits were paid to the Republic communications. The report provided an ›› in the framework of the thematic of Turkey and the Republic of Latvia. evaluation of the telecommunications Platform 4 on Contacts between In particular, our officers paid a visit to development state and a preparation of people of the Eastern Partnership the Public Utilities Commission of the the summarized recommendations for EU imitative on September 11, 2012 Republic of Latvia for learning expe- every country taken apart and for groups in Chisinau (Republic of Moldova) rience of approval and use of quality of countries divided according evalua- countries-participants signed a assurance system of telecommunications summaries and similarity of ICT Memorandum of Understanding of tions services in public telecommunica- development level. the Eastern Partnership Network tions networks in November and took of Electronic Communications part in a seminar on telecommunica- In addition to these events during Regulators (hereinafter referred to tions regulation of the Information and the past year NCCIR was involved in as Network). Communication Technology Authority international activities at the level of of Republic of Turkey in May and Governmental management. Thus, in Also, in May, representatives of NCCIR November 2012. November NCCIR Chairman Petro Yatsuk took part in the regular Forum of took part in official visit of the Prime the European Commission project on In addition to regional cooperation Minister of Ukraine Mykola Azarov to Observatory for monitoring of electronic NCCIR participated in activities out- the Kingdom of Norway (Oslo) within communications and information society side Europe. On the invitation of the the Ukrainian government delegation. services in the Enlargement countries Korean part, the NCCIR delegation The main results of the visit were the (Dubrovnik, Croatia) and regional Event visited the Global e-Government Forum: opening of the Ukrainian-Norwegian for executives in the field of Information “Smart e-Government for a Better business forum in the Telenor Head Society “Renaissance for eGovernance in Future”, held in October in Seoul (the Office and the meeting with the lead- Central and Eastern Europe” held in March Republic of Korea). The main result of ership of the Telenor Company and its in Bled (Slovenia). It should be noted that the Forum was the proclamation of the affiliated Ervy Company. the very fact of invitation to these events Seoul Declaration for the Future of the indicates an understanding of Ukraine’s Internet Economy. As preparation for As part of improving interaction with European prospects by representatives of the project of the European Bank for participants in the markets of telecom- regulators in EU member states. Reconstruction and Development (EBRD) munications and electronic goods and assistance for 2012-2013 for NCCIR services we continued cooperation both Bilateral cooperation on the development of the electronic with some international companies communications sector in Ukraine, works operating in the Ukrainian market, and During 2012, NCCIR and the Polish state were carried out with the EBRD repre- the groups of companies, such as the Office of Electronic Communications sentatives regarding the future of the American Chamber of Commerce in (OEC) realized the project of bilateral project. In July 2012 EBRD completed Ukraine. cooperation “Further support of the Ukrainian electronic communications regulator in the light of ICT and information society development”. As part of its execution in July and October two working visits of representatives of NCCIR to Warsaw were made (July and October) and OEC expert missions were received (May and November). NCCIR and the President of OEC signed the Declaration of Cooperation in the field of communications regulation (20.11.2012).

Taking into consideration a number of common issues, very useful for NCCIR is

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 61 3 Work Support 3.1 Organization structure

The structure of the National Commissions for the State Regulation of Communication and Informatization

Chairman of NCCIR Members of NCCIR (6)

The structure of The National Head of the Commission Staff Commissions for the State Regulation of Natural Monopolies in the Sphere of Communication and Informatization Regulation and Licensing Work Support is formed according to the prior- Department Department ity guidelines and powers determined by the Enactment of The National Commissions for the State Communications Department International Affairs Department Regulation of Natural Monopolies in the Sphere of Communication and Informatization which was confirmed Development of Information Society Financial Support by the Presidential Edict of November and Informatization Department 23, 2011 № 1067/2011. The structure has the total number of 15 structural entities (8 departments, 2 directions, HR and Civil 3 divisions, 2 sectors) and also 4 Department of Coordination Service Division officials who are not affiliated with of Nationwide Projects on the entities: the assistant to the Head, Informatization the Advisor to the Head of NCCIR and Consumers and Citizens chief officers: for industrial safety Appeals Division service and for internal auditing pro- Economic Analysis cedure). Department Documentary Supply The public enterprise “The Ukrainian and Control Division State Centre of Radio Frequencies” is Legal Support also included into NCCIR management Department field. Information Security Sector State Supervision Department Corruption Prevention and Detection Sector Chief Expert of Internal Auditing Adviser to the Head

Chief Expert of Work Safety Service Assistant to the Head

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 63 3.2 Staffing the state regulation in the communications and informatization area

ЕAn effective state regulation in the closed down National Commission field of communications and informati- for Communications Regulation of zation is possible on the conditions that Ukraine and the State Inspectorate NCCIR staff be highly qualified. of Communications; selection from among candidates of persons having The satisfaction of needs of skilled experience in the communication field personnel and forming staff of NCCIR and appropriate professional training; as a newly formed state agency keeping gender equality and reasona- were the priorities of personnel ble balance between ambitious youth policy of the National Commission seeking work in promising area, and for Communications Regulation and experiences of people who have given Informatization. years of hard work to the development of communication industry. Having the staff listing of 375 units and actual designation of 8 persons The diagram shows the distribution of as of January 1, 2012, we man- employees according to their records of aged to staff 83% of NCCIR staff list public service. (310 persons). Forming the staff we focused upon adhering to a principle For engaging young people into the of maximal retention of talent pool civil service, we started the practice of and personnel field experience of the concluding agreements on cooperation between NCCIR and educational insti- Distribution of employees according Distribution of NCCIR employees by their tutions, including the State University to their records of public service education of Information and Communication Technologies and The Kyiv National Economic University named after Vadym Hetman. 48 15,5% 80 78 Currently, highly skilled experts 25,8% 25,2% 23 work on the staff of the National 7,4% Commissions for the State Regulation of Natural Monopolies in the Sphere of Communication and Informatization. 189 50 They professionally solve the tasks 61,0% 45 16,1% assigned to the Commissions. 14,5% 67 21,6% 40 The following numbers characterize the 12,9% qualitative composition of the team of specialists.

up to 5 technical From 310 NCCIR workers 147 civil servants (47%) are women and 163 (53%) from 5 to 10 economic are men.

from 10 to 15 legal The average age of NCCIR civil servants is 42. from 15 to 25 liberal 297 (96%) employees have completed more than 25

64 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 3.2. Staffing the state regulation in the communications and informatization area their higher education, 65 (21%) of Three persons passed their stage of Within a framework of the Twinning them have master’s degrees. vocational training according to the component “Supporting enhance- professional program of the prepara- ment of the Regulatory and Legal By their education, 62% of civil tion regarding the European integration Competence of the National servants have higher technical, 16% and European cooperation of Ukraine at Commission for Communications — economic, 7% — legal, 15% — lib- the Higher Qualification Institute of the Regulation of Ukraine regard- eral education. There is a tendency of Kyiv National University of Trade and ing Telecommunications Sector increasing the number of employees Economics. Regulation” 4 NCCIR workers, including with technical and economic education. 2 Commission members, took part Two NCCIR workers participated in in a learning visit to the city of Riga 52 (17%) workers have two earned the workshop “Prices and Tariffs (Latvia); 6 NCCIR workers, includ- degrees including 16 cases at Setting in Telecommunications/ ing 1 Commission member — to the the National Academy of Public ICT”, organized by the International Spanish Telecommunications Market Administration under the President of Telecommunications Union together Commission; 4 NCCIR workers, includ- Ukraine in “Public Management” and with the Odessa National Academy of ing 1 Commission member — to the city “ Society Development”. 12 people go Telecommunications named after O. S. of Stockholm (the Kingdom of Sweden). into further academic studies to earn a Popov. In the framework of the realization of second degree; 5 people — to com- NCCIR and the Polish state Office of plete their higher education. 9 NCCIR On the ground of concluded service Electronic Communications co-pro- civil servants were conferred the PhD agreements, 28 civil servants of NCCIR ject “Further support of the Ukrainian degree. followed the courses, including: electronic communications regulator in ›› based on the programs of work- the light of ICT and information society Therewith, refresher training remains shops “Government Purchases”, development” 2 NCCIR administrative a priority guideline of NCCIR personnel “Novelties in the Field of Office officers (including the Head of the development. Work and Archiving of Ukraine”, Commission Staff) passed a two-week “Requirements in Financial, study course (Warsaw, Republic of During 2012, the Commission members Budgetary and Tax Reporting of Poland) (I category of posts) and workers of State-Financed Establishments 12 entities that hold positions of II-V for 2012” and “Remuneration of Three NCCIR workers participated categories of civil servants have passed Labour”; in the World Radiocommunication their stage of vocational training. In ›› on training courses in using Seminar (WRS-12) (ITU total, we organized stages of vocational “Telecommunication Alarm Radiocommunication Bureau, Geneva) training of 48 NCCIR workers who were Sequence Analyzer TASA, version students and participants of 53 learn- 3.7” and on the program “MySQL Professional team gains were marked ing events. Data Base”; by state awards. Thus, the NCCIR ›› based on the program of “Public Chairman was awarded the Order of Thus, 18 NCCIR workers followed the Speaking and Oratory”. Merit (3rd Class), the title of “Honorary courses of 8 programmed workshops Services Sector Worker of Ukraine”; at the Management Development An attention was paid to the study one civil servant was awarded with Institute of the National Academy of the international experience of Honorary Diploma of the Cabinet of of Public Administration under the telecommunications regulation and the Ministers of Ukraine, four NCCIR work- President of Ukraine: development of information technol- ers were awarded with valuable gifts of ›› Policy analysis. Analytical ogies. In particular, two government the Supreme Soviet of Ukraine. document preparation; officials of NCCIR participated in the ›› Psychology bases of efficient workshop on the regulation of informa- management; tion technologies in Istanbul (Republic ›› Standards of business speech as a of Turkey). 2 specialists took part in the part of the administrative culture. seminar on regulation of telecommu- Speech etiquette in professional nications organized by the Information activity; and Communication Technology ›› Political and socio-economic pro- Authority of Republic of Turkey. cesses in Ukraine; ›› Human resource management in the bodies of public and local authorities with due consideration of the new legislation requirements concerning the civil service; ›› Rendering public services and the evaluation of their quality; ›› European integration of Ukraine; ›› Applications of new educational technologies in refresher training system.

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 65 3.3 Documentary support and executive discipline control

In 2012, the NCCIR overall documents activities in the telecommunica- circulation amounted to 21565 doc- tions sector — 1272; uments, of which incoming — 11909, ›› applications for allocation, renewal outgoing — 8579, interoffice corre- of license for using numbering spondence — 1077. resources — 875; ›› clarification requests —367 ; NCCIR received 47 assignments from ›› letters with suggestions and com- the President of Ukraine and the ments to the draft normative legal Administration of the President of acts developed by NCCIR — 62; Ukraine, 421 assignments from the ›› other — 2368. Cabinet of Ministers of Ukraine, 52 Distribution of incoming correspondence documents from the Supreme Soviet of A target date of performance is set to by sender Ukraine, 12 interpellations and applica- all justified documents submitted to tions of the Deputies, 183 documents NCCIR, in compliance with the law. from educational institutions, 2483 of 1,06% other correspondence. In total 4441 In order to increase the level of bodies’ 9,48% documents, that is 37% of the total executive discipline at NCCIR, a weekly 0,27% number of incoming correspondence. report on the target dates of perfor- 1,17% mance of documents submitted to the Most of the correspondence was Commission is given at the operational 24,43% received from economic entities (3892 meeting in the office of the Chairman 55,91% documents) and telecommunications of NCCIR. operators (3574 documents), that is 63% of the total. In addition, as far as legal acts exe- 3,56% cution, assignments of the President In compliance with the Law of Ukraine of Ukraine, the Cabinet of Ministers 4,12% On access to public information NCCIR of Ukraine, applications from tele- received 49 requests for public infor- communications operators and other mation in 2012. documents are concerned, a proactive The President of Ukraine and the monitoring is held. There is a system of Administration of the President of Mainly such documents came in from a weekly reminder to structural units Ukraine telecommunications operators and that the deadline of the documents economic entities: under control expires in a week. The Cabinet of Ministers of Ukraine ›› notification of an entity wishing to conduct activities in the telecom- In 2012, in NCCIR there were 6564 The Supreme Soviet of Ukraine munications sector — 1016; documents under control, of which ›› applications for issuance, reissu- 5645 documents were performed in People’s Deputies of Ukraine ance, renewal, issuance of a copy time that is 86%. Other controlled doc- or duplicate of license for using uments, under objective circumstances, executive authorities radio frequency resource (RFR) of were performed insignificantly out of Ukraine, for a license for additional time. judicial authorities bandwidth — 984; ›› applications for determination of educational institutions applicability of radioelectronic facilities and radiating devices on other territory of Ukraine — 522; ›› applications for issuance, reissu- ance, renewal, issuance of a copy or duplicate of license for conducting

66 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 3.4 Operational expenses and budget revenues

The amount of planned revenues Under the Law of Ukraine On the State to the state budget under the Law Budget of Ukraine for the year 2012, of Ukraine On the State Budget of according to the Program 5561010 Ukraine for the year 2012 according to “Management and Administration the codes charged with control over in the Sphere of Communication the collection (withdrawal) of pay- Regulation and Information” for ments to the budget in 2012 com- the year 2012 the financing of the prises 3,113.4 million UAH. National Commissions for the State Regulation of Natural Monopolies in The actual amount of revenues to the the Sphere of Communication and State Budget of Ukraine in 2012 com- Informatization is approved equal to prises 2, 458.6 million UAH, including 35, 177.9 thousand UAH. by code: ›› 22011400 “Payment for issuing, According to the referred above renewal, extension of licenses Program, the received funding level for use of the radio frequency was equal to 34,808.0 thousand UAH. resource of Ukraine and for issuing duplicates of such licenses” — 175.2 million UAH; ›› 22011700 “Payment for issuing, renewal, extension of licenses for performing activity in the field of telecommunications and for issuing copies and duplicates of such licenses” — 9.9 million UAH; ›› 22012200 “Payment for allocation of the numbering resource” — 1.2 million UAH; ›› 19070000 “Fee for use of the radio frequency resource of Ukraine” — 840.5 million UAH; ›› 24140600 “Fee for use and rendering services of cellular mobile communications”– 1, 431.8 million UAH.

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 67 4 Performance of the Public Enterprise “The Ukrainian State Centre of Radio Frequencies” The State self-supporting enterprise The enterprise is empowered of: of “GeoMon” terrestrial terminals, the Ukrainian State Centre of Radio ›› production support of radio which has no analogues in the CIS Frequencies (hereinafter referred to frequency resource management and the Eastern Europe, was also as UCRF), established in accordance systems in Ukraine (radio designed. with the Law of Ukraine On Radio frequencies assignment, Frequency Resource of Ukraine, is assignment of calls, registration In addition, the company has set under the National Commissions of radioelectronic facilities and up automated information system for the State Regulation of Natural radiating devices, issuance of for recording mobile terminals Monopolies in the Sphere of permissions); on territory of Ukraine, allowing Communication and Informatization, ›› preparing findings regarding practically resolving the problem of and act with the authority of Laws of possibilities and conditions of smuggling mobile phones. Ukraine On Radio Frequency Resource using radio frequency resource of of Ukraine, On Telecommunications Ukraine; UCRF is also proud of its Certification and other normative legal acts of ›› radio frequency monitoring of Centre of the European level. In Ukraine. using radio frequency resource of the field of UCRF, international Ukraine; cooperation the priority activity is to UCRF is ranked among the enterprises ›› ensuring the electromagnetic ensure the international coordination of strategic importance to the compatibility of radio electronic of Ukraine’s and other countries’ radio economy and security of the country. facilities (REFs) and radiating frequency assignments and expanding devices; participation in the International Nowadays, UCRF is a powerful ›› technical control of Telecommunication Union, of which modern state enterprise that provides telecommunications networks. Ukraine is a member, and in other effective and efficient use of the radio international telecommunications frequency resource of the state in the In addition, UCRF takes part in organizations. interests of all categories of users for international protection and economic, social, informational, and coordination of radio frequencies, as The high level of the company cultural development of the country, well as in the work of international specialists allowed UCRF to get the strengthening its defence capability. organizations that exercise level of membership in such renowned management and regulation in the international organizations as the field of telecommunications. Radiocommunication Sector of the International Telecommunication The structure UCRF includes 25 Union and the European affiliates, which are located in all Telecommunications Standards regions of Ukraine and Autonomous Institute. Republic of Crimea. In forrecent years, according to the As estimated by international statistics the Ukrainian State Centre of experts, one of the best in Europe Radio Frequencies, headed by Ph.D. in and the best in the CIS technical Technical Sciences Pavlo Slobodianiuk, radio control system, equipped with has been recognized the best state modern automated complexes of enterprise in Ukraine and awarded the national and foreign production, which State Enterprise of the Year Certificate. allows to control the use of radio frequency resource by radio electronic facilities of all used in Ukraine radiotechnologies, was created in UCRF.

A geolocation radio monitoring system

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 69 4.1 Performance of radio frequency assignment and issuance of the permissions for radio electronic facilities operation

The positive dynamics of growth of The reduction of provided in 2012 the implementation of measures for the provided findings regarding the findings on possibilities and conditions development of a nationwide digital possibility of licensing radio frequency of using radio frequency resource of terrestrial TV broadcasting network and resource of Ukraine is due to an Ukraine for TV and radio broadcasting the lack of free frequency resources. increased number of applications of is due to completion, in general, in license granting from economic entities 2010-2012, of calculations on per- Increase of the number of provided in to use the radio frequency resource of formance of the assignment of the 2012 findings on electromagnetic com- Ukraine. President of Ukraine No 181/66519-01 patibility of radio electronic facilities is of October 14, 2010/10 612 to ensure due to increase of the number of relevant applications from users of radio frequency resource of Ukraine. Works in preparing and providing findings regarding possibilities of licensing radio frequency resource of Ukraine and findings regarding possibilities and conditions International coordination of of using radio frequency resource of Ukraine for television and radio broadcasting radio frequencies assignments needs. During 2012, 2,572 radio frequencies No Name of Works 2009 2010 2011 2012 assignments were coordinated for radio electronic facilities of Ukraine and 1. Findings regarding possibilities of licensing 173 208 275 500 12,218 for radio frequencies assign- radio frequency resource of Ukraine, prepared ments for radio electronic facilities of and provided to NCCIR other countries.

2. Findings regarding possibilities and conditions 387 874 950 107 There were also held bilateral of using radio frequency resource of Ukraine meetings with technical experts of for television and radio broadcasting, pre- Telecommunication Administrations of pared and provided to The National Television Romania and Slovakia on the coordi- and Radio Broadcasting Council nation of frequency assignments for terrestrial radio electronic facilities in the border areas. Works on radio frequencies assignment Participation in activity No Name of Work 2009 2010 2011 2012 of the International Telecommunications 1. Provided findings on electromagnetic 26094 15732 14247 34205 Union (ITU), the European compatibility of radio electronic facilities Conference of Postal and Telecommunications 2. Issued licenses for fixed radio electronic 35488 46883 51274 49957 Administrations ( CEPT) and facilities operation the Regional Commonwealth in the Field of Communications 3. Issued licenses for radio electronic facili- 105779 101701 98864 94748 (RCC) ties of decentralized assignment ПDuring 2012, the representatives of 4. Coordinated radio frequencies assign- 4438 4261 4532 2572 UCRF took part in 27 events of inter- ments for radio electronic facilities of national organizations in the field of Ukraine communication (ITU — 15, CEPT — 8, RCC — 4). In general, while participat- 5. Coordinated radio frequencies assign- 4966 8563 8368 12218 ing in this year’s international forums, ments for radio electronic facilities of the representatives of UCRF made 16 other countries reports and directed 9 official contribu- tions in accordance with the estab-

70 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 4.1. Performance of radio frequency assignment and issuance of the permissions for radio electronic acilities operation lished procedure to the labour bodies In addition, it should be noted that the ensured REFs checking for compliance of ITU and CEPT. Conference Preparatory Group (CPG) with issued licenses for the opera- assigned the UCRF representative tion and labelling by UEFA stickers of As for the participation in the to the post of the CEPT Coordinator radio equipment for admission stadi- International Telecommunication for agenda item 8 of WRC-15. On ums areas. A special UCRF “hot line” Union (ITU), it should be mentioned November 06-09, 2012, in UCRF the processed 729 user calls on using radio that the full membership of UCRF in 38th meeting of the Project CEPT frequencies and operating REFs during ITU Radiocommunication Sector has Group on radio frequencies moni- EURO 2012. provided an opportunity to present toring and observance of legislation practical experiences and research (FM PT 22) was held, in which the At preparatory stage of EURO 2012 results of UCRF at nine events of representatives of Communications UCRF radio monitoring facilities this organization. In addition, the Administrations of 26 CEPT member detected and removed effects of 87 experts of UCRF provided the nec- countries took part. sources of interference, and directly essary consulting support during during the tournament they detected the participation in the work of the Management of the radio 18 cases of interference and illegal delegation of Ukraine at the ITU World frequency spectrum and exploitation of REFs. The frequency Radiocommunication Conference radio monitoring during the monitoring system that consisted of 8 (Geneva, January 23 — February 17, preparation and holding of fixed and 18 mobile stations of radio 2012) and ensured the Interregional the E U R O -2012 control and 13 portable finders allowed Forum “Current Regulatory Issues in a reliable control during EURO 2012 of the Area of Telecommunications and Carried out by UCRF detailed planning all the radio frequency bands speci- Radio Frequency Resource Usage for use of the spectrum, simplification of fied for the use by UEFA, tournament CIS Countries and Europe” organized at the procedure of issuance of permissive participants and the media. During the the Center on September 11-13, 2012 documents for the temporary use of preparatory stage and the holding of together with NCCIR and ITU. radio electronic facilities, ensuring the EURO-2012, the total number of REFs, instrumental verification of radio elec- checked by UCRF radio monitoring The contribution of UCRF to studies tronic facilities and radio monitoring, means, comprised 9,000. of the Regional Commonwealth in operative removal of radio frequency the Field of Communications (RCC) interference, as well as the close coop- The activity of UCRF on radio fre- is important. The specialists of UCRF eration with UEFA and the Office of quency spectrum management and ensured the discharge of their govern- Electronic Communications of Poland radio monitoring during the preparation ing duties in a number of RCC labour ensured a continuous work of a large and holding of EURO 2012 was highly bodies, including Vice-Chairman of the number of different devices and radio appreciated by both UEFA and the Regulatory Commission of using radio communication equipment necessary Secretary General of ITU Mr. Hamaduna frequency spectrum and satellite orbits, for successful holding in Ukraine of the Toure, who during a visit to the final Chairman of the Working Group on UEFA European football Championship match acquainted with the organization radio frequency spectrum management final in 2012. of UCRF events on NSC “Olympiysky” and the Chairman of Technical Expert and visited UCRF to participate in sum- Group on the Use of Radio Frequency In total, UCRF received 3773 applica- marizing the results of relevant works Resource of synchronous audio tions from 83 companies, according to on preparation and holding of EURO- broadcasting networks of RCC mem- which it issued 3,569 permissions to 2012 in Ukraine. ber countries in the MW / LW ranges. foreign users for the radio electronic On September 13-14, .2012 in UCRF facilities operation during Euro 2012. the first meeting of the RCC Working Created in broadcasting compounds Group on radio frequency spectrum and media centres of all 4 stadiums management was held, in which the special UCRF technical control points representatives of Communications Administrations of seven RCC member countries took part, and on December 17-21, 2012 — the meeting of RCC Working Group on preparation for the Radiocommunication Assembly and World Radiocommunication Conference of 2015, which was attended by the representatives of Communications Administrations of 9 RCC member countries.

During the participation in the activities of the European Conference of Postal and Telecommunications Administrations (CEPT) UCRF focused on researches carried out by the Working Group Frequency Management (WGFM), the Group on preparation for WRC-15 (CPG) and the Working Group on numbering and networks (WGNaN).

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 71 4.2 Import of radio electronic facilities and radiating devices

The legal bases of UCRF issuance of During 2012 UCRF granted 7082 import the referred regulatory procedures. Two import license for radio electronic licenses for radio electronic facilities mobile phone manufacturers (Samsung facilities from abroad to Ukraine are and 94 licences for models of ter- and LG) continue from 2010 direct stipulated in Articles 14, 16 and 29 of minals that are imported to Ukraine supplies of mobile phones in Ukraine, the Law of Ukraine On Radio Frequency in authorized delivery mode directly as it is in Europe, which contributed, Resource of Ukraine and normative by manufacturers. According to the among other things, to the creation legal acts regulating the procedures for obtained licences economic entities of necessary conditions for support the import of electronic means, includ- were licensed to import 8,927 thousand of products by their manufacturer ing mobile phones. As a protection of mobile terminals. Assumed measures and quality improvement of terminals the Ukrainian market from substandard, allowed ensuring revenues to the State supplied by these manufacturers on the unauthorized for use, and smuggled Budget of Ukraine, from taxes and market of Ukraine. into Ukraine mobile phones and other customs duties just from the import end user equipment of mobile net- of mobile phones about 1.1 billion Lack of laws and regulations on the works (terminals) these legislative acts UAH in 2012 vs. 62 million in 2008. mandatory shutdown of terminals of provide recording of unique identifi- By increasing the import of other REFs not confirmed origin in Ukraine leads to cation codes (IMEI codes) of terminals overall revenues to the State Budget of a delay in full implementation of reg- imported from abroad and operated Ukraine in 2012, amounted to about 1.5 ulatory market supervision procedures in networks of mobile operators in billion UAH due to the value added tax. and breakthrough on a problem of Ukraine. realization and operation in Ukraine of As a result of introduced legisla- mobile phones smuggled into Ukraine The material support of implementa- tive procedures of protection of the and important social problem solving — tion of control procedures of mobile Ukrainian market from smuggled termi- the theft of mobile phones. terminals import from abroad is an nals and through collaboration with the automated information system for State Customs Service of Ukraine, we recording terminals in Ukraine (AISRTU) succeed, for three consecutive years, carried out by UCRF at its own expense. to maintain a significant imported ter- The first stage of the system was set minals market share of Ukraine on the into commercial operation on May 29, legal level (including market analysts’ 2009. estimates) about 92 — 95%, vs. 5 — 7% in 2008 — before the introduction of

9988949 10000000 8975000 8927400

7500000

4594288 5000000 4068090 2589115 2500000 Imported terminals 1130619 671670 644487 237787 other imported REFs 0 2008 2009 2010 2011 2012

72 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 4.3 Radio frequency monitoring

Radio frequency monitoring is organ- The application of modern means ized in compliance with the require- of TRC and proper organization of ments of laws. radio frequency monitoring measures increases the efficiency of preventive During 2012, technical radio control measures regarding violations in mak- covered 157,997 units of radio elec- ing use of radio frequency resource, Number of measurements tronic facilities and radiating devices, which in its turn reduced, during the in the course of which 1,522,219 reporting year, the number of appli- 1698875 1722492 1800000 radiation measurements were carried cations from users for detection and 1522219 1422542 out. Decrease vs. the previous year elimination of radio interferences 1350000 of the number of measurements is sources effects. due to amendments to regulations of planning technical control of relay During 2012, UCRF performed on set 900000 communication stations. time 889 applications for detecting and eliminating radio interferences The further fitting out of UCRF sources effects. 450000 radio frequency monitoring units by specialized radio control stations and For logistical and functional support 0 intensification of work on detection of performance of tasks of radio 2009 2010 2011 2012 of illegally operating devices have frequency monitoring an automated increased the number of detected vio- radio frequency monitoring system Number of violations lations during the reporting period. was created in UCRF. As of December 31, 2012 within the UCRF technical 11745 12000 11322 During 2012, 11,745 violations in the control system there are 129 mobile 10609 use of radio frequency resource were and 194 fixed stations of radio control, 9000 revealed, including: deployed in all regional centres and in 8056 ›› the use of radio electronic facilities another 81 localities of Ukraine. The (REFs) without permissive docu- central control console ensures the 6000 ments — 9,648; feature of guidance of 143 fixed radio ›› the use of REFs in violation of the control stations. conditions on the license for the 3000 operation — 2,097. Created up to date automated radio frequency monitoring system pro- 0 During reporting period, undertaken vides qualitative performance of the 2009 2010 2011 2012 measures corrected 9,785 violations tasks of technical radio control in all of use of radio frequency resource, of developed in Ukraine radio frequency Number of performed applications them together with the Department of ranges. 1140 State Supervision (hereinafter referred 1200 to as DSS) and with the bodies of MIA — 1,458. 907 918 889 900 UCRF provides to NCCIR and DSS the results of technical radio control (TRC) 600 in order to prepare findings for making relevant decisions by NCCIR and exercising state supervision over the use 300 of radio frequency resource.

0 2009 2010 2011 2012

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 73 4.4 Realization of technical control of telecommunications networks

One of the main tasks of UCRF activity In 2012, UCRF held 1212 activities of is taking measurements (technical con- measurements (technical control) of trol) of telecommunications networks telecommunications networks under that aim to detect violations of the 193 contracts with interested tele- laws of Ukraine related to the illegal communications operators, as well as pass of international telephone traffic. during participation in commissions of the Department of State supervision The specialists of the direction of tel- of the National Commissions for the ecommunications and UCRF affiliates, State Regulation of Natural Monopolies under contracts with telecommunica- in the Sphere of Communication and tions operators, perform measurements Informatization and on requests of law (technical control) of telecommunica- enforcement authorities. In the course tions networks, including those related of these activities, 673,992 violations to the traffic routing in telecommunica- on the networks of operators were tions network of Ukraine. revealed and registered by measurement protocols. To perform these works in UCRF relevant units, staffed with qualified specialists and equipped with modern measuring devices, were created. In addition, for the automated control of signaling traffic a fragment of public telecommunications network measurements system of Ukraine has been established and is functioning on the base of UCRF. It includes the Center of measurements and local points of measurements deployed in technical sites of certain telecommunications operators in different cities of Ukraine.

74 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 4.4. Realization of technical control of telecommunications networks

In order to stop violations and respond One of the promising directions of appropriately against violators, UCRF activity is testing (measuring) operators were given Protocols of the quality of telecommunications measurements on which rendering services. Appropriate test trials by telecom services to users-violators monitoring real traffic on the networks was terminated or restricted. Law some fixed operators were carried out enforcement agencies were submitted by Telecommunications Department of materials concerning 6029 violations UCRF during and after the European of the order of routing, which resulted football championship Euro-2012. in 11 criminal cases initiated under Art. 361 of the Criminal Code of Ukraine The dynamics of events of measure- “Unauthorised intervention in the work ments (technical control) of telecom- of computers (PCs), automated systems, munications networks and detected computer networks or telecommunica- violations at carrying out of events tions networks.” of measurements (technical control) of telecommunications networks in The dynamics of events of measure- 2008–2012 are shown in the charts ments (technical control) of telecom- attached. munications networks and detected violations at carrying out of events of measurements (technical control) of telecommunications networks in 2008- 2012 are shown in the charts attached.

1300

1225 1212

1150 1125 1136 1104

Dynamics of events of measurements 1075 1030 (technical control) of telecommunications networks in 2008-2012 1000 2008 2009 2010 2011 2012

673992 700000

525000

350000 268950 268666 296200

Dynamics of detected violations at 160316 175000 carrying out of events of measurements (technical control) of telecommunications networks in 2008-2012 0 2008 2009 2010 2011 2012

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 75 5 Priority tasks of the NCCIR for 2013 Among the priorities of NCCIR for 2013, should be defined the following

In the field of telecommuni- 6. Ensuring convergence of telecom- hensiveness and coherence of cations: munications networks and services. information society development 7. Ensuring competition, invest- in Ukraine. Institutional ensuring 1. Providing conditions for accelerat- ment attractiveness in the case of of coordination of activity of state ing the development of telecommu- competitive allocation of scarce bodies on the development of the nications networks and increasing resources, the improvement of reg- information society. the list and volumes telecommuni- ulation mechanisms of the telecom- 4. Improvement of the system of indi- cations services provided to broad munications market. cators of the information society layers of population 8. Ensuring the protection of the development in Ukraine and the 2. Support of implementation of interests of Ukraine in the field of system of state statistical observa- state-of-the-art radio technologies communications through partic- tions. in the bands released as a result ipation in the activities of ITU, 5. Development of national informa- of conversion, radio frequency CEPT, RCC and other international tion and communication infrastruc- refarming, searching for additional organizations. ture and its integration with the ways of releasing radio frequency global infrastructure. resource. In the field of mail service 6. Ensuring public access to ICT and 3. Ensuring development of broad- electronic information resources. band data transfer networks. Ensuring effective functioning of the Ensuring the ability of providing Participation in forming state postal services market and the legal administrative services and attract- policy aimed at the development regulation of issues regarding: ing citizens to participate in state of broadband Internet access in ›› exercising state supervision in the government through the creation Ukraine. field of mail service; of a single integral distributed, nor- ›› Increasing penetration level of ›› procedure of entry of economic enti- malized informational and commu- broadband access using stationary ties to register of postal operators; nicational environment. infrastructure on performance of ›› acquiring by NCCIR the right to 7. Bringing the current administration the assignment of the President of receive of postal operators their of domain .UA to the best world Ukraine of March 21, 2012 No 1-1/645 reporting, information and documents standards and submitting appro- on introduction of state-of-the-art necessary for the performance of its priate amendments to the Law of technologies in the telecommunica- functions; Ukraine On Telecommunications. tions sphere that meet international ›› providing courier services. 8. Development of norms, standards standards, ensuring the right of free and regulations of IT. public access to the Internet. In the informatization field 9. Conducting a complex study of ›› Increase of efficiency of rendering the IT market in order to introduce services of mobile broadband access 1. Determination of the mechanism mechanisms of regulation of the using technologies 3G and 4G. of regulation of electronic market. information technologies market 4. Ensuring effective use of radio Participation in the formation of for creating conditions for a com- frequency resource. an electronic market (e-market of petitive environment taking into 5. Continuation of the process of goods and services) in Ukraine, account the best world practices. liberalization of the telecommu- providing its further efficient func- 10. Implementation an international nications market. Simplification of tioning. Support of increasing the system of object identifiers the market entry and activity in diversity and number of adminis- the telecommunications market by trative electronic services to the gradually moving from licensing to public and businesses provided by registration. ICT. 2. Creating favourable conditions for attracting investments in the development of information and communication technologies. 3. Ensuring consistency, compre-

ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012 77 UKRAINIAN STATE CENTRE OF RADIO FREQUENCIES State Enterprise

Kyiv, 15th km, Peremogy Avenue, E-mail: сепtre@uсrf.gov.ua + 380 44 422-81-03 www.ucrf.gov.ua

The quality management system applicable at the enterprise guarantees appropriate quality of services, which UCRF renders to the different categories of consumers. The quality management system has been certificated by the Ukrmetrteststandart State Enterprise Certification Body on conformity with the requirements DSTU ISO 9001:2009.

The basic kinds of UCRF activity according to the legislation are: • assignment of radio frequencies, issue of permissions for the use of radio electronic facilities and radiating devices in the public-frequency bands; • preparation of conclusions for making the corresponding decisions as regards the issue of licenses of the use of radio frequency resource of Ukraine by the National Commission for the State Regulation of Communications and Informatization; • preparation of conclusions on the direct order of the National Television and Radio Broadcasting Council of Ukraine concerning a possibility and conditions for the use of radio frequency resource of Ukraine for television and radio broadcasting; • preparation of permissions for import of radio electronic facilities and radiating devices; • radio frequency monitoring of the use of radio frequency resource of Ukraine according to the legislation, taking measures on detection and elimination of the effect of RFI sources; • exercise of technical control over telecommunications networks.

The Ukrainian State Centre of Radio Frequencies is a member of: • International Telecommunication Union (ITU) • European Telecommunications Standards Institute (ЕТSІ) • European Conference of Postal and Telecommunications Administrations (СЕPТ) • Regional Commonwealth in the Field of Communications (RCC) UCRF at EURO-2012

UCRF began preparation for EURO-2012 on the basis of the NCCIR instruction of 25.12.2009. UCRF main tasks were determined, the working group was formed, interaction with UEFA and with the Polish radio frequency body - Office of Electronic Communications (UKЕ) - was adjusted.

UCRF thorough planning of the use of radio frequency spectrum, simplification of the procedure for issue of permits, exercise of REFs instrument check and radiomonitoring, RFI efficient elimination as well as close interaction with UEFA and UKЕ secured a free work of a great number of radio communications facilities required for successful holding EURO-2012.

Under the simplified procedure for temporary assignment of radio frequencies to foreign users for the period of holding the championship, UCRF received 3773 applications from 83 companies and issued 3569 permits for REFs use.

The special technical control stations created in the language compounds and media centres secured an instrument check on observance of the conditions for ЕМС and radio equipment marking with UEFA stickers by REFs users in order to get access to stadium zones.

In a stage of preparation for EURO-2012 and during the championship, the effect of 104 RFI sources was detected and efficiently eliminated with the use of UCRF radiomonitoring facilities.

The experts of UCRF Call-Centre by hot line phone processed over 700 appeals on obtaining permissions for the use of different radio equipment, procedure for testing its technical parameters and access to stadiums. The answers were given in the Ukrainian, English and Russian languages.

UEFA and Hamadoun Touré, the Secretary-General of the International Telecommunication Union, who visited Ukraine and UCRF, appreciated highly the work of the experts of the Ukrainian State Centre of Radio Frequencies directed to ensuring of the effective use of radio frequency spectrum during EURO-2012. 80 ANNUAL REPORT of the National Commission for the State Regulation of Communications and Informatization for 2012

NATIONAL COMMISSION FOR THE STATE REGULATION OF COMMUNICATIONS AND INFORMATIZATION