Aleksandr Danchenko: "The Telecom-Market Suffocates without Accurate and Clear Rules"
The Director General of Datagroup, Aleksandr Danchenko, told on prospects of the telecommunication market development under an influence of the situation, emerged in the country.
The interview for the journalists of Delo.ua information & news portal:
How and with what result, to your opinion, will the much-talked-of legislative initiatives of the 16th of January end up? Although it was cancelled, the precedent had been created. Will a continuation of the story take place?
Let us face it - the branch of telecommunication is lacking for the integrate strategy of development. Those initiatives, which you are talking about, these are a kind of wake-up-call, which has demonstrated, once again, that everything is not so smoothly in the branch.
Let us take, for example, the topic of the Fund of Public Services (in the draft law, being under consideration of the Parliament - the Fund of Public Telecommunication Services, FPT). This topic has been already exaggerating about 12 years, and if we take a look on the history of its development, when does it start to "pop up"? Only using the commotion - just as it is now, when it is possible to lobby everything by the package and "on the sly".
If we turn back to the issue on licensing of telecom-companies and providers, I have been always standing for the reasonable licensing, and I have not changed my position until now. If someone does not like the word "licensing" itself, then, call it whatever: "Cooperation order", "Rules for conducting an activity in the service provider's market" ... The essence is not in it. There must be a document, which protects, from the one hand, an operator, and from the other - a user. Telecom-operators claim that it is becoming more difficult to work; the market is pressed from all directions. But, last time, providers themselves are struggling in a way far from marketing methods. The events in Kharkiv are a proof of that.
And what kind of a way out do you see in the existing conditions?
There is the only way out - the existence of rules, common, clear, obligatory for implementation by all parties. In the market, opinions of different professionals can be heard, as if such initiatives are a pressure, and a pressure is bad. But, all we have already made sure repeatedly that n absence of rules leads to worse result. And it does not matter what market or event we are talking about. Try to play preference without clearly established and previously agreed by all players rules (smiling).
As for the issue of standardization and development of rules, the matter is a completely different thing: common provisions of connection, common requirements for cabling, and common clear rates for objects' connection. After all, how the matter is now: for "an entry" into an ordinary apartment building, a provider needs to pay some amount to somebody for a flat, and it means that money goes not into budget and not for a territory accomplishment. If operators had common established regulations, rate schedule, payment for services on the basis of contracts with local self-government authorities, it would be easier and more profitably for everybody to work.
What will it give and what is a difference from the existing circumstances?
Now, Housing Maintenance Office's representatives may come and say: there must be only cables of blue colour in our house, and you must cut off all red ones, and in a neighbouring house - on contrary, the yellow ones are popular, and there is no way of development for others. Where in a civilized state could you faced with that? I shall answer you: Nowhere. Last time, we are looking very often to Europe, and we want to live like there - in warmth, comfort and convenience. Well, absolutely reasonable desire, but Europe itself will make us to develop and issue common rules of play at the legislative level, which will doubtfully match our mentality - as we like fishing in trouble waters.
Attempts to create such document took place earlier. Why has such a resonance occurred now?
The resonance has occurred on the background of all what is going on in the country. Why has the average citizens raised a clamour, not having sorted it out? Now, it is in fashion to make a fuse and to hold a rally. Although, in fact, all described initiatives, in the first place, are called upon to provide the market with a qualitative service with an appropriate execution and technical support. However, some people from some associations do not have a concern in the development of telecom-operators' business, for them it is important to be against everything and occupy themselves with their own PR within everyone's view.
Last year, when the NCCIR has been developing rules, all operators were invited, including middle and small ones. And the majority agreed with the said suggestions, nevertheless, it is hard to please everyone. Then, the document was sent to the Ministry of Justice, and, here, one of the branch association has appeared, which starts to protest against it. Consequently, instead of rules, agreed upon 70%, the market, in a slightly brief time, receives the "16th January" draft law. You do not want in an amicable - receive, as always. After all, the mentioned quarrelsome draft law, not only with providers, it was not agreed even with NCCIR.
Is such kind of situation only in the BBA segment?
No, almost in all market's segments. The situation with telephony is slightly better, where Soviet rules and discipline has historically remained.
For instance, a lack of supervision destroyed the wholesale segment in our country. Ukraine locates very well geographically, that is well-known fact. Datagroup has been nurturing the idea to create a large trans-route telecommunication "tube" and to suggest operators of America, Europe and Asia to use new opportunities for transit. But, in Ukraine, instead of remaining 1-2 optic routes to sell services to other states, they contrived to construct 20 0f such tubes. Then, they sold it, having been tempted to have one-off profit. That led to the market growth in the terms of gigabit, and in the terms of money it sages. And that is while the nearest neighbour - Russia, protected the market of international IP-transit by licensing. In Europe, also operators of "the first level" must obtain a license. And Ukraine, instead of an "enrichment" by the means of selling telecommunication "raw materials", has given a traffic free of a charge, while outside operators are paying taxes in their countries, nob in Ukrainian budget.
That is why, I support licensing with both of my hands in a wholesale too. But, our suggestions on the implementation of licensing in the primary market of data transmission have not been heard by public officers.
If we revert to the draft law of the Fund of Common Telecom-Services that is under discussion now to what extent does it correspond expectations of the market participants?
In those form in which the FPT is discussing it now, I am against it. And again, I revert to the issue of a strategy. Now, we have a lot of concepts: "An open world", "A digital district", including the conception of universal services' fund. FPT was urgent 10-15 years ago. In its creation, they have been guided by a world experience in creating a digitization scheme for distant districts, but these schemes are more than 20 years, and they are not acute for Ukraine any more. I am sure, nobody, nowhere wants the assets from such a fund goes to the only one definite operator - what we have here, is that in such situations someone always wants make a profit.
But, the communication in in a diversity, usual for urban and, moreover, for capital citizen, is not everywhere, and the state must solve the problem of digital inequity. How could it be done in a manner, acceptable for the business?
For the development of an infrastructure, including telecommunication, all over the world, the scheme, close to the following one, is applied. At first, an advisory council is created, for example under the NCCIR, to which experts of different areas are included. They work on a performance specification - define the demand of a state in the infrastructure for uniform development of electric services in the whole country.
For instance, now, the issue of a social and transport card is acute. The idea is good, it is realized successfully in the world. Let us imagine: disputes around the question on who should issue this social card have calmed, and these cards were emitted. What will be further? Where should a granny in a village input this card? First of all, a primary network should be built, on the basis of which all these services work.
Let us turn back to the algorithm - after having prepared a performance specification, it must be agreed with the National Bank or another state bank - which is the issuer of a social card, Ukrainian Post, Pension fund, Ministry of Transport, that is with all participants of the project.
After that, they ask Ukrtelecom, Datagroup, Kyivstar, MTS, what and with which terms and conditions are they ready to implement in their existing networks. For "white spots", a price of infrastructure construction is calculated, an investment model is worked out. A worthy example of the analogues project implementation is the construction of a transmission network for on-line monitoring over an election. The government acted as a customer, and Ukrtelecom and Datagroup, have organized the network for video steam transmission in a very few months, and Ukrtelecom used existing network, while Datagroup built a new one on the basis of satellite technologies.
The question remains: At the expense of which funds should such a project be financed?
There are two variants. For instance, operators undertake all capital expenditure in that part, where they can, and then receive a profit from the rendered services. The second variant is to create a consortium, in which shares are divided on a pair between the state and the private operators. The state finances the network construction in full and its support in the first 2-3 years. Over this period of time, a commercial management comes to the point of a break-even and continues to develop the network already as a commercial project. In such a way, on the one hand, the communication is provided for governmental establishments, for schools free of a charge - the state receives a ready-made solution. Ant it is compensated with the fact that all others receive the services on a commercial basis. I am a supporter of the second variant exactly.
How can it be implemented in Ukraine?
In our village, a school, a soviet and a post-office, as a rule, locate closely, at one place in terms of territory. Let employees of the specified establishments use the network from from 8:00 until 19:00, and common users, who pay for Internet, for television, for another telecom-services, that are in demand in this region, connect to it after 19:00 On the basis of such network and Wi-Fi network, another technologies can be constructed and developed.
We look at Germany as at a sample of economics, and I, as a football fan, also watch playing of the national team of Germany, which is called "bundesteam" or "bundesmaschine". Everybody considers the football national team of Germany to be an example of the discipline. Because there are the rules, there is the discipline. And exactly that is why the economics of Germany is one of the best and stable in the world, and German team always struggles for the highest places in European and World's championships.
In the anarchy, reining here, there are a number of those, who want to carve out anything. Upon each change of public officials, the newcomers start to make over everything for themselves. If we want to build up a successful state, there should be rules for everything.
A discipline is a set of provisions, which must be obtained by everybody. It may be disliked, but without that, it is not possible to build up neither a state, nor a telecommunication branch. The only condition is that rules were clear and common for everybody. And whether someone likes it or not - it should be passed through!
Which examples could illustrate problems of the telecom-market due to gaps in a state regulation?
Let us consider a mobile communication. In the world, 4-5-6 G is already actively discussed, and we almost do not have even the "third generation". And what have we reached in Ukraine (the only UMTS-license in the country belongs to Ukrtelecom)? Have the earnings from taxes increased? No. And our armed forces - are they the best because they possess radio-frequencies for 3G? No!
If the state is on the threshold of changes, then the changes must be right. Not everybody will like them, but they must be accepted. It is important to mention that rules must not limit operators - for instance, you cannot render services here, because there is another company in this territory. Or else due to some reasons, you cannot render services to governmental authorities. Or else you can render services only after having installed the "wire-taps" or something else.
So, we are talking not only about the telecom-market's players?
Surely. For example, rules for Housing Maintenance Offices and City Halls, which will be prohibited to impede a work of an operator or a provider, if it has executed all necessary requirements. In particular, it has laid optics properly. An installation of equipment should not be impeded. For this, theoretically, a charge of UAH 100 may be taken per a house, let it be once a year. And now, we pay every month, depending on the region (according to the editorial staff's data, from 3 up to 7 UAH/month per a flat).
After all, if a provider enters with services a new house, district, village, urban-type settlement, new workplaces appear there at once, two or three. In the provision of a service starts, tax liabilities appear.