Competition between cellular companies in Ukraine will be tougher

According to RBC. Market Research ” , the level of nominal mobile penetration in Ukraine by the end of 2006 will reach 100% of the total population. However, there is a significant gap in the market between the number of SIM-cards and the number of real users. Thus, according to the forecasts of iKS-Consulting , the real penetration of cellular communications in the country will barely exceed 60% by the end of the year - even if 100% of the nominal penetration is reached. At the same time, the “critical maximum” of real penetration ranges from 80-85% of the total population of the country. Accordingly, the researchers believe that by 2007 the resource for recruiting new subscribers will not be fully exhausted. They add that there is still a place for competition in the Ukrainian cellular market.

More precisely, RBC analysts predict fundamental changes in the competitive situation. “The expected increase in the cost of attracting one subscriber, due to fierce competition and media inflation, will reduce the resource at which the drop in average income per subscriber does not have a tangible impact on the operator’s margin,” they explain. “This, in turn, will force operators to gradually curtail traditional marketing tools (such as price wars and dumping) and shift the focus of the marketing strategy towards the cultivation of brand loyalty.”

In addition, it is expected that operators will intensify the promotion of additional services - first of all, the mobile Internet - and also increase activity in the segment of contract subscribers. “The emergence of the market from the state of“ marketing infantilism ”will also be facilitated by the expected appearance of two new players positioning themselves as operators of the“ third generation ”and claiming to intercept the most solvent users of cellular services,” the researchers report.