Just nine months after entering Ukraine’s pager market with a splashy ad campaign and promises of superior service, the Dutch-Ukrainian joint venture U-Page is on the rocks.
The company has stopped sales of its pagers, marketed under the Eurotext brand name, at its outlet in Kyiv, although it continues to serve customers through rentals, and company officials were only willing to promise that the pagers would continue to work for another month.
U-Page has also halted its advertising campaign and put 80 percent of its employees on ‘vacation,’ according to an employee.
Although no official announcements have been made by U-Page or by either of its owners, it appeared that Dutch telecommunications giant KPN was moving to dump its 49 percent share in the joint venture with Ukrainian Delovoi Svit.
‘There is a reorganization going on in our company,’ U-Page Kyiv Chief Accountant Maxim Komponets told the Post. ‘One of the partners is leaving, another may come in.’
When it entered the Ukrainian market last October, U-Page had the long-term goal of becoming one of the leading companies in the rapidly developing Ukrainian telecommunications market.
‘We see the potential of this market as outstanding,’ U-Page manager Cor van Ingen told the Post at the time. ‘Initially we expect up to 10,000 customers, and in 10 years the market could grow to hundreds of thousands.’
Unfortunately, the ambitious plans failed to materialize. Although locally owned Ukrpage and foreign-owned Beeper Paging now boast an estimated 20,000 and 10,000 users, respectively, U-Page in its first nine months of operation attracted a mere 500 customers, a U-Page employee told the Post.
AU-Page offered news, weather reports and a smarter beeper, with more capacity for expanded information retrieval on top of its basic pager service. But the extra costs meant the firm had to charge higher prices – something that has not gone down well with thrifty Ukrainian customers.
Even though U-Page’s package prices were only about 10-15 percent higher than the average for the market, they seem to have played a decisive role.
Store manager Taras Kobets, who looked into buying a beeper from U-Page, said he decided against it because ‘their prices are not competitive.’
U-Page Financial Director Linda Kelly would not provide any information on the company’s situation or its future plans.
‘I can’t make any comment on anything to you,’ she told the Post. She referred questions to KPN’s Director for International Operations Hans Wagenaar, who was on vacation.
But for U-Page workers and customers the writing is pretty much on the wall.
Besides halting sales, U-Page has halted its advertising campaign, Alla Alexyuk of Kyiv’s Visage advertising agency confirmed.
Around 80 percent of U-Page are now on enforced vacation, according to sources at the company.
‘I have no idea when I’ll go back to work for them, if ever,’ one technician told the Post. ‘In fact, my understanding is there will be further personnel cuts next month.’
Komponets emphasized that U-Page beepers will continue to work, at least for the short term.
‘Your pagers will work for the time being,’ he said. ‘We are preparing bills for this month as normal, and then we will see. But you can depend on your pager working for at least the next month.’
Other U-Page customer service personnel confirmed that promise, but refused to be quoted by name.
Acting PR Manager Olena, who would not give her last name, had some comfort for clients. ‘The clients’ pagers will function.’ However, she refused to provide further details.
What comes next – a partial or total buy-out of KPN’s U-Page share by Delovoi Svit, a takeover of KPN’s stake by a third player, or even U-Page bankruptcy – remains speculation.
U-Page officials have denied persistent reports over the last two months that KPN wants out of the joint venture
Vladimir Shaleiko, a representative of Dilovoi Svit and Chairman of U-Page’s Supervising Council, said he had no information regarding his Dutch partners’ plans for U-Page. He said there was a shareholders meeting planned for July.
‘If they [the Dutch] decide to sell their share, our willingness to buy it will depend on the price and other terms that they offer,’ he said.
