CST-Invest (NewTone) to fall under PEOPLEnet umbrella

8 Jun 2007

Vadim Shulman, the owner of CDMA network operator Telesystems of Ukraine, has announced that he will complete a takeover of fellow regional CDMA provider CST-Invest (NewTone) in the next four months, and rebrand it under his firm’s PEOPLEnet banner. According to TeleGeography’s GlobalComms database, Telesystems launched fixed wireless CDMA-based services in Kiev in 1997, and was awarded CDMA2000 1x licences for all regions of the country in June 2006. In February 2007 it launched commercial CDMA2000 1xEV-DO services in Kiev, Dnipropetrovsk and Odessa under the PEOPLEnet brand, offering EV-DO handsets, PC/laptop wireless datacards and USB wireless modems. It expanded the 3G WiLL network to Kharkiv the following month, and to Lviv and the Crimean capital Simferopol in May. It plans to spend USD130 million on EV-DO in 2007/08 following an initial investment of around USD50 million in 2006, and is aiming to deploy a total of 1,000 base stations to cover 80% of Ukraine’s population by 2010. Its EV-DO services are designed to exploit a gap in the business user market for 3G services left by the country’s failure to award W-CDMA licences to GSM operators. In late January 2007 Telesystems announced it was near to agreeing a purchase of CST-Invest, and is believed to be planning other acquisitions and infrastructure sharing deals to accelerate its national expansion. Potential targets or partners include ITC (CDMA Ukraine), Intertelecom (IT CDMA) and Velton Telecom.

GlobalComms notes that CST-Invest (NewTone) operates 800MHz CDMA2000 1x WiLL networks in Dnipropetrovsk and Krivoy Rog (both in the Dnepropetrovski region), and in January 2006 it obtained further CDMA licences for ten regions. In January 2007 its management said that if a takeover goes ahead CST-Invest will continue to focus on basic fixed wireless voice services for SMEs and consumers, whilst PEOPLEnet will develop higher value EV-DO wireless broadband services for more affluent clients. Market observers quoted by Rynok.biz believe that Shulman will attempt to resell the enlarged PEOPLEnet in the next one to three years, because of the difficulties involved in expanding nationwide.

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