The Better Regulation Delivery Office (BRDO) has released the analytical dashboard “Fixed Internet Access Market”. This is a public interactive tool that aggregates information on the main characteristics of the fixed-line communications market over the past three years.
The dashboard allows tracking the key trends and dynamics of the fixed Internet access market in Ukraine. The dashboard was prepared using open data from the regulator, as well as information on single tax payers.
“We are convinced that the BRDO’s fixed-line Internet market dashboard will become an important tool for market participants and analysts. The tool was created using open data. Our goal is to achieve the opening of other data from the NKEC regulator for better analysis of the industry,” says Ihor Samokhodsky, Head of the IT and Telecom Sector at the BRDO.
State of the fixed-line Internet market
According to the BRDO analytical dashboard, the Ukrainian market of fixed Internet access services in 2024 demonstrates the following indicators:
- About 8.5 million Ukrainian subscribers – households, businesses, and institutions – use fixed Internet access services. Of these, 27% live in rural areas. Since the beginning of Russia’s full-scale invasion, the number of subscribers has decreased significantly, but has now recovered to the level of 2021.
- Of the 4,100 fixed-line Internet service providers, 63% are individual entrepreneurs. Their market share is growing every year, and in 2024 they served 36.5% of subscribers (45% in rural areas). BRDO experts believe that this growth is due to the willingness of microbusinesses to operate in commercially less attractive areas, including rural areas, which are usually not of interest to large operators.
- Most service providers are individuals and legal entities on the simplified taxation system. However, they do not dominate the market: about 56% of the fixed-line Internet access industry’s revenues in the first half of 2024 were generated by providers operating under the general taxation system.
- According to the results of the first half of 2024, 94% of fixed-line Internet access providers received less than UAH 5 million in revenue.
- The average revenue per user (ARPU) of legal entity providers is higher than the ARPU of individual entrepreneurs (252 UAH/month vs. 227 UAH/month) and has been growing over the past three years. The average ARPU of the market’s top 10 companies is 185 UAH/month.
Top 10
The top 10 largest companies in the fixed-line Internet access market in 2024 are Ukrtelecom, Kyivstar, Volia Cable, Datagroup, Home Net, FRINET, Business and Technologies, Farlep Invest, Wild Garden and Merezha Lanet.
Kyivstar is the undisputed leader in terms of the number of fixed-line subscribers, with 1.175 million users. Taking into account that Volia merged with Datagroup, the combined provider provides Internet access to 552 thousand subscribers, which puts it in second place. Ukrtelecom is losing ground to the third-ranked provider (466 thousand users). However, the company remains the leader in terms of revenue. For the first half of 2024, nominal revenue amounted to UAH 830 million.
According to the results of the first half of 2024, the market leaders provide 33% of Ukrainian subscribers (2.8 million users) with fixed Internet access, generating 28% of the industry’s revenue. At the same time, the market share of the largest operators, both in terms of revenues and the number of subscribers, is declining every year.
Tax changes
In September-October 2024, the State Tax Service (STS) began to abolish the simplified taxation system for providers of fixed Internet access services – small businesses.
According to the latest data of the National Commission, 487 Internet service providers have already filed applications for termination of their activities. It is worth noting that operators on the simplified taxation system provided Internet access to 41% of all subscribers, including 51% in rural areas.
BRDO experts believe that such a decision of the State Tax Service will lead to a deterioration in the quality of services, access to the Internet, increased vulnerability of networks to physical and cyber attacks, higher prices for Internet access services and other negative factors.
