You're reading: Russian-owned Ukrainian mobile operators exit Crimean market only to return as different entities

Over the week, Ukrainian mobile operators MTS Ukraine and Kyivstar, both owned by Russian parent companies, with 78 percent of Crimea’s $400 million telecommunications market, interrupted service on the peninsula. 

On Aug. 5
MTS Ukraine “unexpectedly” lost control over its equipment over what the
company said were events that were beyond the “company’s activities,” according
to the mobile
operator’s statement
.

Meanwhile,
Kyivstar said that on Aug. 11 armed men came to its
Simferopol office and started installing their own mobile connection equipment,
which caused the company to cancel services in Crimea.

Both
statements said interruptions in service were “temporary,” and it appears
that the firms have already started the process of re-entering Crimea’s market
through different entities. It is not clear whether Russia – after annexing
Crimea in March –is behind the interruptions in service or whether the
Russian-owned mobile operators are trying to skirt possible sanctions and avoid
a spat with the Ukrainian government.

K-Telecom,
a newly-created and mysterious Russian telecom operator that exists as several duplicate
companies
, took over MTS Ukraine’s frequencies on the peninsula, according to
Kommersant, a Moscow-based business daily. The day before MTS lost access to
key equipment, Russian Prime Minister Dmitry Medvedev and the Kremlin-installed
Crimean leader Sergei Aksyonov took part in an Aug. 4 video-conference during
the newcomer’s business launch.

Citing focus.kontur.ru,
an online service that provides information on Russia-registered business
entities, K-Telecom is actually owned by MTS, reports Cnews, a web-portal
devoted to covering the technology sector.

However,
MTS officially declines that it owns any company named K-Telecom.

Moreover,
a public register of officially recognized Russian organizations lists another
K-Telecom whose business activity is “phone connection”. This particular
firm is controlled by Boris Borunov who worked for the Crimean office of MTS
Ukraine, but quit the company, reports Cnews.

Regarding
Kyivstar, its Crimean frequencies were passed to Vimpelcom, its parent company,
reports
Interfax Russia
. The move received green light from Russian regulators,
who have allocated 500,000 numbers in Crimea to the company. Meanwhile, Vimpelcom
placed its Crimean customers into Astelit’s mobile network for roaming
services. Astelit is a Ukraine-registered company jointly owned by billionaire
Rinat Akhmetov and Turkey’s Turkcell, but operates under the Life brand.

Despite
the turbulence on the peninsula, Life continues running its network there and
does not plan to exit, the company’s spokeswoman Oksana Bondarchuk told the
Kyiv Post.

The current
situation affects many. In one case, Maryna Yakusheva led her family in escaping from war-torn
Donbas. They came to Sevastopol, a major Crimean port city and a base for
Russia’s Black Sea Fleet, to stay with their local friends.

Yakusheva,
who has pro-separatist leanings, had feared the Ukrainian army would aggressively
clear Donetsk of rebels on Aug. 24, Ukraine’s independence day.

However,
Yakusheva was not able to reach her Sevastopol friends by dialing their MTS
mobile phone numbers. As a result, the family had to rent an expensive
apartment to spend the night before buying tickets to the Russian city of Tula.