PRESS: Loss of Vodafone Ukraine in Donetsk may cost MTS 1 bln rbl

MOSCOW, Jan 16 (PRIME) -- Vodafone Ukraine, a unit of major Russian mobile operator MTS, has failed to restore connection interrupted earlier in January in self-proclaimed republics of Donetsk and Luhansk, and a loss of assets in the area could cost MTS some 1 billion rubles, business daily Kommersant reported on Tuesday.

Efforts of authorities of the Donetsk People’s Republic and mobile operator Vodafone Ukraine to fix the rupture, occurred on the territory not controlled by Ukraine, had resulted in nothing by Monday.

“Kiev halted work of Vodafone on the territory of the Donetsk People’s Republic. Hundreds of thousands of our citizens were left without connection with friends and relatives on the other side of the demarcation line. If necessary we can introduce external management on the network,” the republic’s head Alexander Zakharchenko said in a statement.

The republic’s authorities believe the long-haul connection channel was damaged by Ukrainian militants. Kiev said the rupture was on the territory Ukraine does not control.

A spokesperson for the MTS group told the daily that the operator’s network is functioning in the region in an autonomous mode and the company does not have an opportunity to ensure its full-fledged technical support. MTS did not disclose the number of affected subscribers.

According to the communications minister of the Donetsk republic, Viktor Yatsenko, about 2 million citizens of the Donetsk and Luhansk republics are deprived of connection services.

A source in the Ukrainian government said that the disconnection in the Donetsk region had been preceded by switching subscribers to a more expensive tariff, and it related to the clients registered on the territories not controlled by Kiev. The operator explained the move in tariffs by the fact that it had no access to equipment.

Raiffeisenbank’s analyst Sergei Libin said that the company could have intended to demotivate people to use services of Vodafone Ukraine since the operator may not want to work in the region. MTS had already written off intangible assets in the area and could now write off physical assets that will be lost, the analyst said estimating their value at about 1 billion rubles.

Vodafone Ukraine has been the last big international operator in the Donetsk People’s Republic. Kyivstar, controlled by Amsterdam-based VEON, stopped working in the region in 2015. The network of local operator Phoenix functioned in all towns of the area as of Monday but with huge overload.

(56.3569 rubles – U.S. $1)

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