Telecom 'cartel' to disconnect Internet phone card users
Calling cards issued by dozens of small companies that sell long‑distance telephone service routed through the Internet may soon be useless – and the firms that issued them may be out of business – due to a pact between Ukrtelecom and a handful of telecom operators.
State‑owned Ukrtelecom and eight other firms with government‑issued international long‑distance licenses agreed last month to block calls placed by companies offering IP‑telephony, or Internet‑based long‑distance service.
While IP‑telephony operators told the Post on Aug. 12 that they haven’t been cut off yet, they fear it could happen soon, putting them out of business.
IP‑telephony cards issued by subsidiaries of Ukrtelecom, Golden Telecom, Kyivstar and the other long‑distance licensees will not be affected and will continue to work, but most of the more than 100 Ukrainian Internet providers offering calling cards will be affected.
On July 30, the country’s nine telecommunications operators that are licensed for international telephone connections announced that they had signed a memorandum of understanding in which they recognized that only companies licensed to provide international calls should be allowed to do so, without regard to the technology used.
IP‑telephony companies say that the agreement effectively created a long‑distance cartel intent upon closing smaller operators down.
Ukrtelecom, its subsidiary Utel, Golden Telecom, Kyivstar GSM, Telesystems of Ukraine, DCC, Ukrainian Communications, Ukomlain and International Telecommunications have all been issued long‑distance licenses and signed the agreement. All nine agreed to block calls placed by IP‑telephony firms other than those owned by other licensees.
All nine offer IP‑telephony services of their own.
IP‑telephony operators are highly dependent on Ukrtelecom’s fixed‑line telephone network, which customers use to connect to the Internet.
IP‑telephony is an Internet‑based telephone communication service that is considerably less expensive than traditional long‑distance services, though voice quality is lower. Customers dial a local telephone number to establish a connection with a computer operated by the IP‑telephony operator, which then establishes an Internet connection with a computer in the local area of the number being dialled. The process does not involve establishing a traditional long‑distance telephone connection. The caller pays for the local telephone connection to the computer.
Only one IP‑telephony firm contacted by the Post agreed to comment on the record. Others said they feared that commenting could further damage their already sour relationship with Ukrtelecom. Those relations first went bad last year when Ukrtelecom blocked them from its network without warning, alleging that they were operating an illegal long‑distance phone service that robbed Utel of revenue.
The IP‑telephony operators described the agreement as creating an unfair and illegal cartel that will likely kill their businesses.
“This action violates the antimonopoly laws and the Constitution, which guarantees freedom of entrepreneurship to businesses,” Telegroup Director Roman Varlamov said. Telegroup, a U.S.‑German‑Latvian joint venture, markets IP‑telephony and telephone call‑back services to corporate customers in Kyiv and Odessa.
“They just got together and shut out the rest,” Varlamov said. “They basically created a cartel.”
Varlamov said that most countries do not recognize IP‑telephony as a traditional phone service and, as a result, do not require them to purchase long‑distance licenses. In Russia, he said, IP‑telephony operators are required to purchase a $3,000 license, but Germany does not license the activity. Varlamov said that Germany’s 300 IP‑telephony firms get along fine with Deutsch Telekom, that country’s fixed‑line phone giant.
Varlamov said that if his company is cut off, the firm’s clients, which he said are primarily businesses and embassies, would suffer.
Varlamov said he thinks the blockage will go into effect in September. He said the state telecommunications committee has failed to respond to his company’s request for an explanation, and that his company plans on sending a complaint to the Ukrainian government, the Antimonopoly Committee and to the Ukrainian Chamber of Commerce via the Latvian, German and United States embassies.
