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As Of Filer Filing For·On·As Docs:Size 3/14/19 VEON Ltd. 20-F 12/31/18 144:27M |
Document/Exhibit Description Pages Size
1: 20-F Annual Report by a Foreign Non-Canadian Issuer HTML 2.20M
2: EX-1.1 Underwriting Agreement HTML 328K
3: EX-4.6 Instrument Defining the Rights of Security Holders HTML 257K
4: EX-8 Opinion of Counsel re: Tax Matters HTML 45K
7: EX-13.1 Annual or Quarterly Report to Security Holders HTML 39K
9: EX-99.1 Miscellaneous Exhibit HTML 70K
10: EX-99.2 Miscellaneous Exhibit HTML 154K
5: EX-12.1 Statement re: Computation of Ratios HTML 45K
6: EX-12.2 Statement re: Computation of Ratios HTML 45K
8: EX-15.1 Letter re: Unaudited Interim Financial Info HTML 41K
17: R1 Document and Entity Information HTML 66K
18: R2 Consolidated Income Statement HTML 137K
19: R3 Consolidated Statement of Comprehensive Income HTML 83K
20: R4 Consolidated Statement of Financial Position HTML 128K
21: R5 Consolidated Statement of Changes in Equity HTML 83K
22: R6 Consolidated Statement of Cash Flows HTML 144K
23: R7 Consolidated Statement of Cash Flows HTML 40K
(Parenthetical)
24: R8 General Information HTML 44K
25: R9 Segment Information HTML 165K
26: R10 Operating Revenue HTML 108K
27: R11 Other Non-Operating Losses, Net HTML 55K
28: R12 Trade and Other Receivables HTML 121K
29: R13 Other Assets and Liabilities HTML 85K
30: R14 Provisions and Contingent Liabilities HTML 159K
31: R15 Income Taxes HTML 278K
32: R16 Significant Transactions HTML 96K
33: R17 Impairment HTML 195K
34: R18 Property and Equipment HTML 117K
35: R19 Intangible Assets HTML 119K
36: R20 Goodwill HTML 81K
37: R21 Investments in Subsidiaries HTML 288K
38: R22 Financial Assets and Liabilities HTML 311K
39: R23 Cash and Cash Equivalents HTML 55K
40: R24 Financial Risk Management HTML 187K
41: R25 Issued Capital and Reserves HTML 64K
42: R26 Earnings Per Share HTML 87K
43: R27 Dividends Paid and Proposed HTML 70K
44: R28 Related Parties HTML 318K
45: R29 Events After the Reporting Period HTML 46K
46: R30 Basis of Preparation of the Consolidated Financial HTML 45K
Statements
47: R31 Significant Accounting Policies That Relate to the HTML 213K
Consolidated Financial Statements as A Whole
48: R32 Significant Accounting Policies That Relate to the HTML 279K
Consolidated Financial Statements as A Whole
(Policies)
49: R33 Segment Information (Tables) HTML 167K
50: R34 Operating Revenue (Tables) HTML 112K
51: R35 Selling, General and Administrative Expenses HTML 66K
(Tables)
52: R36 Other Non-Operating Losses, Net (Tables) HTML 54K
53: R37 Trade and Other Receivables (Tables) HTML 122K
54: R38 Other Assets and Liabilities (Tables) HTML 138K
55: R39 Provisions and Contingent Liabilities (Tables) HTML 114K
56: R40 Income Taxes (Tables) HTML 272K
57: R41 Significant Transactions (Tables) HTML 89K
58: R42 Impairment (Tables) HTML 187K
59: R43 Property and Equipment (Tables) HTML 120K
60: R44 Intangible Assets (Tables) HTML 117K
61: R45 Goodwill (Tables) HTML 80K
62: R46 Investments in Subsidiaries (Tables) HTML 283K
63: R47 Financial Assets and Liabilities (Tables) HTML 296K
64: R48 Cash and Cash Equivalents (Tables) HTML 50K
65: R49 Financial Risk Management (Tables) HTML 170K
66: R50 Issued Capital and Reserves (Tables) HTML 62K
67: R51 Earnings Per Share (Tables) HTML 88K
68: R52 Dividends Paid and Proposed (Tables) HTML 67K
69: R53 Related Parties (Tables) HTML 312K
70: R54 Significant Accounting Policies That Relate to the HTML 192K
Consolidated Financial Statements as A Whole
(Tables)
71: R55 General Information (Details) HTML 44K
72: R56 SEGMENT INFORMATION - Reportable Segments HTML 99K
(Details)
73: R57 SEGMENT INFORMATION - Segments Adjusted EBITDA HTML 72K
(Details)
74: R58 SEGMENT INFORMATION - Geographical information of HTML 59K
non-current assets (Details)
75: R59 OPERATING REVENUE - Revenue (Details) HTML 89K
76: R60 OPERATING REVENUE - Assets and liabilities arising HTML 49K
from contracts with customers (Details)
77: R61 Selling, General and Administrative Expenses HTML 56K
(Details)
78: R62 Selling, General and Administrative Expenses - HTML 53K
Operating Leases (Details)
79: R63 Other Non-Operating Losses, Net (Details) HTML 56K
80: R64 Trade and Other Receivables (Details) HTML 51K
81: R65 Trade and Other Receivables - Movements in the HTML 56K
allowance for doubtful debt (Details)
82: R66 TRADE AND OTHER RECEIVABLES - Aging of trade HTML 71K
receivables (Details)
83: R67 Other Assets and Liabilities (Details) HTML 93K
84: R68 Provisions and Contingent Liabilities (Details) HTML 87K
85: R69 Provisions and Contingent Liabilities - Legal HTML 75K
Provisions (Details)
86: R70 PROVISIONS AND CONTINGENT LIABILITIES - Contingent HTML 135K
liabilities (Details)
87: R71 INCOME TAXES - Income tax expense (Details) HTML 74K
88: R72 INCOME TAXES - Reconciliation between statutory HTML 75K
and effective income tax (Details)
89: R73 INCOME TAXES - Explanatory notes to the effective HTML 52K
tax rate (Details)
90: R74 INCOME TAXES - Deferred taxes (Details) HTML 50K
91: R75 INCOME TAXES - Deferred tax assets and liabilities HTML 90K
(Details)
92: R76 INCOME TAXES - Tax losses year of expiration HTML 69K
(Details)
93: R77 INCOME TAXES - Foreign subsidiaries, outside HTML 56K
income statement and non-current tax assets
(Details)
94: R78 SIGNIFICANT TRANSACTIONS - Sale of Italy Joint HTML 75K
Venture (Details)
95: R79 SIGNIFICANT TRANSACTIONS - Termination of Deodar HTML 105K
sale (Details)
96: R80 SIGNIFICANT TRANSACTIONS - Exit from Euroset HTML 50K
Holding B.V. Joint Venture (Details)
97: R81 SIGNIFICANT TRANSACTIONS - Withdrawal of mandatory HTML 42K
tender offer in relation to Global Telecom Holding
S.A.E (Details)
98: R82 IMPAIRMENT - Impairment losses (Details) HTML 97K
99: R83 IMPAIRMENT - Key assumptions (Details) HTML 95K
100: R84 PROPERTY AND EQUIPMENT - Activity (Details) HTML 100K
101: R85 PROPERTY AND EQUIPMENT - Additional information HTML 61K
(Details)
102: R86 PROPERTY AND EQUIPMENT - Commitments (Details) HTML 58K
103: R87 INTANGIBLE ASSETS - Summary of the Movement in the HTML 68K
Net Book Value of Intangible Assets (Details)
104: R88 INTANGIBLE ASSETS - Acquisition of spectrums HTML 79K
(Details)
105: R89 INTANGIBLE ASSETS - Schedule of Capital HTML 45K
Commitments (Details)
106: R90 Goodwill (Details) HTML 73K
107: R91 INVESTMENTS IN SUBSIDIARIES - Information about HTML 87K
significant subsidiaries (Details)
108: R92 INVESTMENTS IN SUBSIDIARIES INVESTMENTS IN HTML 104K
SUBSIDIARIES - Gain on sale of subsidiaries
(Details)
109: R93 INVESTMENTS IN SUBSIDIARIES - Financial HTML 64K
information of subsidiaries that have material
NCIs (Details)
110: R94 INVESTMENTS IN SUBSIDIARIES - Summarized income HTML 96K
statement (Details)
111: R95 INVESTMENTS IN SUBSIDIARIES - Summarized statement HTML 104K
of financial position (Details)
112: R96 INVESTMENTS IN SUBSIDIARIES - Summarized statement HTML 71K
of cash flows (Details)
113: R97 FINANCIAL ASSETS AND LIABILITIES - Financial HTML 72K
assets (Details)
114: R98 FINANCIAL ASSETS AND LIABILITIES - Financial HTML 84K
liabilities (Details)
115: R99 FINANCIAL ASSETS AND LIABILITIES - Bank loans and HTML 101K
bonds (Details)
116: R100 FINANCIAL ASSETS AND LIABILITIES - Termination of HTML 51K
guarantees (Details)
117: R101 FINANCIAL ASSETS AND LIABILITIES - Reconciliation HTML 67K
of cash flows from financing activities (Details)
118: R102 FINANCIAL ASSETS AND LIABILITIES - Issuance of New HTML 71K
Notes and Cash Tender Offer for Certain
Outstanding Debt Securities (Details)
119: R103 FINANCIAL ASSETS AND LIABILITIES - Reconciliation HTML 59K
of movements relating to financial instruments
(Details)
120: R104 FINANCIAL ASSETS AND LIABILITIES - Hedge HTML 53K
accounting (Details)
121: R105 FINANCIAL ASSETS AND LIABILITIES - Impact of hedge HTML 73K
accounting on equity (Details)
122: R106 FINANCIAL ASSETS AND LIABILITIES - Offsetting HTML 78K
financial assets and liabilities (Details)
123: R107 Cash and Cash Equivalents (Details) HTML 57K
124: R108 FINANCIAL RISK MANAGEMENT - Interest rate risk HTML 48K
(Details)
125: R109 FINANCIAL RISK MANAGEMENT - Foreign currency risk HTML 68K
(Details)
126: R110 FINANCIAL RISK MANAGEMENT - Liquidity risk HTML 73K
(Details)
127: R111 FINANCIAL RISK MANAGEMENT - Liquidity risk HTML 94K
maturity profile (Details)
128: R112 FINANCIAL RISK MANAGEMENT - Capital management HTML 42K
(Details)
129: R113 ISSUED CAPITAL AND RESERVES - Common Stock HTML 60K
(Details)
130: R114 ISSUED CAPITAL AND RESERVES - Major Shareholders HTML 66K
(Details)
131: R115 EARNINGS PER SHARE - Continued operations HTML 53K
(Details)
132: R116 EARNINGS PER SHARE - Discontinued operations HTML 53K
(Details)
133: R117 DIVIDENDS PAID AND PROPOSED - Declared (Details) HTML 45K
134: R118 DIVIDENDS PAID AND PROPOSED - Non-controlling HTML 63K
Interests (Details)
135: R119 RELATED PARTIES - Transactions with related HTML 44K
parties (Details)
136: R120 RELATED PARTIES - Compensation to directors and HTML 162K
senior managers of the company (Details)
137: R121 Events After the Reporting Period (Details) HTML 79K
138: R122 SIGNIFICANT ACCOUNTING POLICIES THAT RELATE TO THE HTML 132K
CONSOLIDATED FINANCIAL STATEMENTS AS A WHOLE -
IFRS 9 and IFRS 15 (Details)
139: R123 Significant Accounting Policies That Relate to the HTML 191K
Consolidated Financial Statements as A Whole -
Ifrs 16 (Details)
140: R124 SIGNIFICANT ACCOUNTING POLICIES THAT RELATE TO THE HTML 68K
CONSOLIDATED FINANCIAL STATEMENTS AS A WHOLE -
Reconciliation of Operating Lease Commitments to
Lease Liabilities (Details)
141: R9999 Uncategorized Items - vip-20181231.xml HTML 118K
143: XML IDEA XML File -- Filing Summary XML 266K
142: EXCEL IDEA Workbook of Financial Reports XLSX 211K
11: EX-101.INS XBRL Instance -- vip-20181231 XML 9.61M
13: EX-101.CAL XBRL Calculations -- vip-20181231_cal XML 460K
14: EX-101.DEF XBRL Definitions -- vip-20181231_def XML 1.58M
15: EX-101.LAB XBRL Labels -- vip-20181231_lab XML 3.65M
16: EX-101.PRE XBRL Presentations -- vip-20181231_pre XML 2.24M
12: EX-101.SCH XBRL Schema -- vip-20181231 XSD 503K
144: ZIP XBRL Zipped Folder -- 0001468091-19-000018-xbrl Zip 649K
| Exhibit |
Regulatory bodies |
In accordance with the Russian Constitution and the Federal Law “On Communications,” (the “Communications Law”), the regulation of activity in the field
of communications is controlled by the President of the Russian Federation, the Russian Government, the federal body of executive power in the field of communications and other federal executive authorities within their competence. The Ministry of Digital Development, Communications and Mass Media of the Russian Federation (formerly, the Ministry of Telecom and Mass Communications of the Russian Federation) (the “Ministry”) is responsible for the regulation of telecommunications, mass media, information technology and postal services. In Russia, regulation of the use of the radio frequency spectrum is exercised by the State Commission on Radio Frequencies, which establishes the procedure for the allocation of radio frequencies. The name and responsibilities of the Ministry were modified in 2018, but the Ministry remains responsible for developing and implementing national
policy and legal regulation in the following areas, all of which are important to our business: • information technology, including the use of information technology in public resources and promotion of access to such resources;• telecommunications, including the allocation and conversion of the radio frequency spectrum, and postal communications; • mass media, including electronic media, development of the internet, television and radio broadcasting (including developments based on digital technology), and new related technologies; • publishing, printing, and distribution
of printed media; • personal data processing, management over specified state property and provision of public services in the area of information technology including organization public information resources and access to it; and • national policy and legal regulation relating to protection of children from information harmful to their health or development. The Ministry in turn controls and coordinates the activity of: (i) the Federal Communications Agency, or “Rossvyaz;” (ii) the Federal Agency on Press and Mass Media and (iii) the Federal Supervisory Service for Communications, Information Technologies and Mass Media, or “Roskomnadzor.” The functions of Rossvyaz and Roskomnadzor
are particularly relevant to our business. Rossvyaz is responsible for allocating numbering resources and certifying communication facilities. Roskomnadzor’s responsibilities include telecommunications licensing activities; issuing permissions for, among other things, radio frequency use, control over telecommunications and information technologies and devices utilizing frequencies, including handsets. |
Regulatory framework |
The Communications Law is the principal legal act regulating the Russian telecommunications industry. The Communications Law sets forth general principles for the regulation of the telecommunications industry, including a description of the institutional framework for the federal government’s involvement in the regulation and the administration and operation of the telecommunications industry. The most important
aspects of the Communications Law with respect to our business include the federal government’s authority to: • license communications service providers; • allocate radio frequencies; • certify telecommunications equipment; • allocate numbering resources; • ensure fair competition and fair pricing; and• conduct oversight of operators’ compliance with the terms of their licenses and Russian law. |
Licenses |
In
accordance with Russian legislation, licenses to provide telecommunications services are issued by Roskomnadzor on the basis of an application from an eligible applicant or, when applicable, on the basis of results of a tender or an auction. Licenses are generally issued for a term of three to twenty-five years. Roskomnadzor has the right to renew an existing license upon application. An application may be rejected if, as of the date of its submission, the operator has been found to have violated the terms of the license and such violations have not been cured. The Communications Law also regulates the procedures for reissuing a license in the case of a reorganization of the license holder or a transfer of a communications network or operation to another person or persons. In addition to obtaining a license, wireless telecommunications operators have to receive a permit for radio
frequency usage for every radio transmitter they operate. The permit for radio frequency usage is issued by Roskomnadzor on the basis of decisions of the State Radio Frequency Commission and the conclusion of an examination by the Main Radio Frequency Center. This examination evaluates the electromagnetic compatibility of the radio electronic devices and coordinates radio transmitter usage with the Defense Ministry, the Federal Protective Service and the Federal Security Service of the Russian Federation. Under the Communications Law, permits for the use of radio frequencies are granted for ten years, or a shorter period if such shorter period is requested in the application. Radio frequency permit duration may be extended on the basis of existing regulations and State Radio Frequency Commission decisions. Radio frequency allocation permission may be suspended or terminated for a number of reasons, including failure to comply with the conditions to which the frequency
allocation was subject. Furthermore, the Communications Law regulates material communications equipment, for example a base station, in the same way as real estate property. In particular, wireless telecommunications operators are required to receive construction permits for the base stations, register title to land plots underlying the base stations or establish other legal grounds to use the underlying land, and consider other regulatory aspects of the network before putting the base stations into operation. |
Mobile Termination Rates |
The Communications Law and the Federal Law “On the Protection of Competition” allow telecommunications operators, including wireless service operators, to
freely establish tariffs for the telecommunications services provided to customers, with the exception of significant operators’ interconnection tariffs and tariffs on universal services. PJSC VimpelCom is not considered a significant operator and therefore can independently establish tariffs. However, since PJSC VimpelCom is considered to have a dominant market position in Russia (as determined by the Federal Antimonopoly Service of the Russian Federation ("FAS")), this independence is limited by the antitrust legislation and requires us to consider the prices of similar services provided by other operators to avoid being sanctioned for abusing a dominant market position. For a description of MTRs in Russia, see “Item 4-Information on the Company-Interconnection Agreements.” |
Significant
Market Power |
An operator is presumed to have SMP if it has a share of more than 25% of all active numbers or if it can sustain traffic throughput of more than 25% of traffic in the particular geographical region or all of Russia. Roskomnadzor maintains an exhaustive list of SMP operators. Operators with SMP must provide interconnect services to all other operators in the market, following mandatory interconnection tariffs, which are regulated. PJSC VimpelCom is not included on this list. However, PJSC VimpelCom has a “dominant market position” in Russia, which requires us to have economical and technical reasons behind our commercial policies, such as pricing or contracting. If the FAS finds a dominant operator’s proposed commercial policies to be groundless, that dominant operator may face legal consequences,
such as fines and obligatory requirements to undertake corrective actions. Pursuant to the Federal Law “On the Protection of Competition”, a company which holds a dominant market position, individually or collectively with other unrelated companies, is subject to restrictions aiming to prevent the abuse of such position to the detriment of other market participants or customers. In particular, the restrictions relate to (i) pricing (among other restrictions, it is prohibited to (a) increase or decrease an existing “monopolistic” (unreasonable) price if it is not caused by an increase or decrease in cost or market conditions or (b) set a different price for the same goods without economic or technological reasons); and (ii) conduct (among other restrictions, it is prohibited to impose unfavorable or unrelated contractual terms on a counterparty or to create barriers
to market entry). If the FAS finds that a company holds a dominant market position (individually or collectively) and abuses such position, the FAS may initiate an administrative action and impose on such company or its officers a fine or another administrative liability depending on the type of violation. In particular, an abuse of a dominant market position which may not and does not result in the restriction of competition may trigger, among other penalties, a fine of between RUB300,000 and RUB1,000,000. An abuse of a dominant market position which may result or did result in the restriction of competition may trigger, among other penalties, a fine of between 1% and 15% of (i) revenue generated from the sale of goods on the market on which the abuse was committed; or (ii) the cost of the goods sold on the market on which the abuse was committed (the fine has a minimum threshold
of RUB100,000 and a maximum of 2% of the company’s aggregate revenue). |
Mobile Number Portability |
Since December 1, 2013, customers have been allowed to port mobile numbers. The maximum charge to the customer to port a mobile number is RUB 100 (US$1.43 as of December 31, 2018) per ported number. PJSC VimpelCom’s business has not been significantly affected from the implementation of mobile number portability. |
Data
Protection |
The Communications Law and the Federal Law “On Personal Data” protects two categories of information: (i) provided telecommunications services and (ii) personal data. Personal data is any information directly or indirectly concerning an individual. Information on provided services includes the personal data of the subscriber and the details of his or her activity on the telecommunications operator’s network. Therefore, the operator has to invest considerable resources to protect both categories of data and comply with rules that relate to collection, processing, storage and use of such data. The rules were amended in July 2014 to require that operators process the personal data of Russian citizens using servers located in Russia. The Russian data localization regime is evolving quickly, and there has been conflicting guidance on some of the requirements. The technical restrictions
on the processing of this data affect how we are able to deploy new technologies, particularly with respect to cloud services, leveraging our data and sharing such information for marketing purposes. The Federal Law “On Personal Data” requires us to receive explicit written consent from individuals before we may transfer data beyond the scope of subscriber’s agreement. Non-compliance could result in administrative sanctions, which could materially impact our operations. Federal Law No 374-FZ (commonly referred to as the Yarovaya laws) amended anti-terrorism legislation and imposed certain obligations on communication providers, including, among others, the obligation to store information confirming the fact of receipt, transmission, delivery and/or processing of voice data, text messages, pictures, sounds, video or other communications (i.e., meta-data reflecting these communications)
for a period of three years, as well as to store the contents of communications, including voice data, text messages, pictures, sounds, video or other communications for a period of up to six months. This requirement came into force on July 1, 2018. In addition, in accordance with Federal Law No 374-FZ, communication providers are obliged to supply information to the investigation and prosecution authorities about users and any other information “which is necessary for these authorities to achieve their statutory goals,” and to provide to the investigation and prosecution authorities any information and codes necessary to decode the information. In addition, under local law, operators are required to block services for users whose personal data does not correspond to the data registered and stored by the operator. Failure to comply may lead to administrative fines and could impact the effectiveness of our licenses.
Most of the provisions of Federal Law No 374-FZ entered into force on July 20, 2016. However, the practical effects of Federal Law No 374-FZ are still unclear, since the implementing legislation does not provide sufficient detail. The implementation and support of measures to comply with the legislation led to substantial investments for the design of our IT systems in Russia, and the purchase of specialized equipment and tools. The Russian authorities require, among other things, the use of specific storage equipment (such as data storage, interception devices, fiberoptic cables and technical platforms). Total expenses may be quantifiable after all technical and administrative measures are completed. Government Decree No 445, dated April 12, 2018, established the progressive order of installation of required storage capacity under the new law. Technical requirements for
the data storage systems under the new law are not fully clear and often subject to agreement with the authorities, so in the near future these requirements could necessitate additional investments to be compliant. |
Other |
Roaming All commercial policies, including roaming prices, are subject to antitrust monitoring and control on an ongoing basis. On July
14, 2017, the FAS issued an injunction requiring all telecom operators to abolish “intra-network roaming” surcharges. This term describes the surcharges applied by operators to subscribers making and receiving calls when travelling outside of their home regions. On March 12, 2018, the FAS opened an investigation into the intra-network roaming tariffs applied by PJSC VimpelCom. In order to comply with the FAS’s injunction, PJSC VimpelCom abolished the surcharges applied to subscribers for receiving calls when traveling outside of their home regions. Russian legislators subsequently amended the Communications Law to prohibit these surcharges. The FAS closed its investigation by imposing nominal fines on PJSC VimpelCom. Restrictions on foreign investment The
Federal Law “On the Procedure for Foreign Investments in Business Entities of Strategic Importance for National Defense and State Security” (the “Russian Foreign Investment Law”) limits foreign investment in companies that are deemed to be strategic. Our subsidiary PJSC VimpelCom is deemed to be a strategic enterprise under the Russian Foreign Investment Law. As a result, any acquisition by a foreign investor of direct or indirect control over more than 50% of its voting shares, or 25% in the case of a company controlled by a foreign government, requires the prior approval of the Government Commission on Control of Foreign Investment in the Russian Federation pursuant to the Russian Foreign Investment Law. The FAS, which administers the application of the Russian Foreign Investment Law, has in the past challenged acquisitions of our shares by foreign investors. In addition, the restrictions stipulated by the Federal Law dated July 27,
2006 No 149-FZ “On the Information, Information Technology and Protection of Information” affect the provision of audio-visual services by foreign entities and local companies with more than 20% of foreign investments or shares. Finally, initial drafts of the implementing regulation for Federal Law 187-FZ “On the security of Russia’s critical information infrastructure” contained provisions limiting the use of foreign contractors. While the final adopted version of this regulation does not contain such limitations, it may not be ruled that such limitations will be introduced in the future. |
Sanctions regimes imposed against Russia |
For a discussion on current sanctions regimes and their effect on our business in Russia, see — Sanctions Regimes.
For a discussion of the risks to our business as a result of the current sanctions regimes, see Item 3.D. Risk Factors — Market Risk — "Our operations may be adversely affected by ongoing developments in Russia and Ukraine.” |
Regulatory bodies |
Under the Pakistan Telecommunications (Re-organization) Act, 1996, as amended (the “Telecommunications Act”), responsibility for telecommunications regulation in Pakistan lies with the
Ministry of Information Technology and Telecommunication (the “MoIT”) and the Pakistan Telecommunications Authority (the “PTA”). The MoIT is responsible for shaping and directing Pakistan’s telecommunications and information technology policies. The PTA is an autonomous body that, subject to government-issued instructions and policy directives, implements policy and monitors the activities of the various market participants through licensing, tariff regulation, investigation of complaints (including arbitration of disputes between licensees) and competition. Additionally, the Competition Commission of Pakistan regulates competition within the telecommunications sector under the Competition Act, 2010. The Frequency Allocation Board (the “FAB”) has exclusive powers to
allocate radio frequency spectrum. The PTA receives applications for the allocation and assignment of radio frequency spectrum and, after examination, refers applicants to the FAB for the allocation of frequency. Telecommunications networks and services in Pakistan are principally regulated under the Telecommunications Act and the rules and regulations made thereunder (the "Telecommunications Rules"). The Telecommunications Act also defines general rules for the licensing and authorization of telecommunications networks and services and introduces principles of establishment and administration of special funds, which are intended for research and development and a universal services fund. |
Licenses |
Mobile
telecommunications operators are required to have a radio frequency spectrum allocation, which is typically auctioned by the PTA to qualifying bidders, subject to the MoIT’s policies and includes a license to operate. To obtain a license to provide mobile telecommunications services in Pakistan, the PTA requires a written application supported by relevant documents, as set out in the applicable regulations, and information memoranda or advertisements in respect of the relevant license. Licenses for the provision of mobile telecommunications services in Pakistan are typically issued for 15 years and may be renewed on such terms and conditions, and with such fees and contributions, which are consistent with the policy of the Government of Pakistan (the “GoP”) at the time of expiration.
The PTA may include such additional terms as it considers appropriate, or it may decline to renew a license for various reasons, including violations of applicable license terms, laws or regulations. For a discussion of the risk related to renewal of licenses, see Item 3.D. — Risk Factors — Operational Risks — “We face uncertainty regarding our frequency allocations and may experience limited spectrum capacity for providing wireless services.” |
Mobile Termination Rates |
The PTA determines all MTRs, and, in addition, all signed contracts must be submitted to the PTA. For a description of MTRs in Pakistan, see Item 4 — Information on the
Company. As described further below, for licensees designated as having significant market power, the PTA proposes an appropriate cost regime for interconnection and applies it to those licensees. Operators that are not subject to SMP in the relevant market may use commercially agreed termination rates. Effective January 1, 2019, MTR rates in Pakistan were reduced from PRK 0.9/min to PRK 0.8/min. |
Significant Market Power |
According to the Pakistan Telecommunication Rules, 2000, an operator whose share of the relevant market exceeds 25% (based on revenues) will be presumed to have SMP, unless determined otherwise by the PTA. The PTA may also determine that an operator
whose share of the relevant market is less than the 25% threshold nonetheless has SMP. Pursuant to the Telecommunications Policy 2015, licensees that are designated as SMP in a relevant market under the competition rules and provide infrastructure and other services (rather than services alone) are required to: • obtain prior approvals from the PTA for the launch of class value added services and any change in prices;• provide, on a first-come, first-served basis, national roaming services and infrastructure sharing, meaning SMP operators will not be allowed to discriminate among operators; • pay MTRs as determined by the PTA (instead of the mutually agreed upon
MTR paid by non-SMP licensees); and • offer infrastructure sharing. Currently, industry operators are challenging the basis on which the PTA makes SMP determinations on the basis that there are differing thresholds for SMP under the Telecommunications Rules (using a 25% threshold) and the Competition Act of 2010 (using a 40% threshold). On September 30, 2016, the PTA issued a determination declaring Pakistan Mobile Communications Ltd (PMCL) as having SMP in the retail cellular mobile telecommunications market for Pakistan. Telenor Pakistan was declared as having SMP in this market in AJK and Gilgit-Baltistan. PMCL has appealed the PTA’s determination
in court. On January 22, 2018, the Islamabad High Court set aside the PTA’s determination on SMP and remitted the matter back to the PTA. |
Mobile Number Portability |
The Mobile Number Portability Regulations, 2005 provide the eligibility criteria for MNP, the rights and obligations of customers and the duties and responsibilities of mobile operators. The PTA formed a supervisory board with all mobile operators to supervise the centralized database
operation and determine the best method for MNP. MNP was launched throughout Pakistan in March 2007. The current porting rate is PKR 250 (US$1.8 as of December 31, 2018) per completed port. The Mobile Cellular Policy 2004 and the Telecommunications Policy 2015 encourage (but do not require) domestic roaming and infrastructure sharing, and those matters are left to the various operators to negotiate commercial terms. Although a limited number of operators in Pakistan originally benefited from MNP, the impact of MNP in Pakistan has dissipated considerably over the past few years and focus has shifted away from the MNP competitive arena. |
Data Protection |
In
Pakistan, there are a number of statutes and regulations on data protection to which we are subject, including the Prevention of Electronic Crimes Act, 2016, the Pakistan Telecommunications (Re-organization) Act, 1996 and Revised Standing Operating Procedure on Requisitioning of Call Data Record by Authorized Officers from Telecom Operators, 2016. We are also subject to specific conditions pertaining to privacy and confidentiality of customer information, which are contained in our telecommunications licenses and the PMCL’s customer privacy policy. Under the applicable laws and regulatory requirements, we have a responsibility to protect customer information and to ensure that information is not disclosed without customer consent, except as required under the law. We also have a responsibility to ensure that information is not transferred/placed or stored outside
of Pakistan. |
Other |
Biometric Verification Following a number of terrorist attacks, the GoP introduced Standard Operating Procedures requiring all mobile operators to re-verify their entire customer base through biometric verification with the exception of SIM cards issued in the names of companies for use by employees. For PMCL, this involved the re-verification of more than 38 million SIM cards, and SIM cards that could not be verified had to be blocked by the operators. As a result of the re-verification, PMCL lost customers but retained 88% of its subscriber base. Telecommunications Policy 2015 On
December 11, 2015, the GoP approved a new telecommunications framework, the Telecommunications Policy 2015, which introduced approximately 50 new telecommunications regulatory frameworks to be developed by the PTA after the requisite consultation process with the telecommunications industry. Certain legislative and regulatory changes are expected in the implementation of these frameworks, including: (i) the introduction of competition rules; (ii) changes in the interconnection regime; (iii) changes in national roaming and infrastructure sharing requirements; (iv) allocation and assignment of spectrum in order to maximize social and economic benefits; (v) the establishment by the PTA of an environmental regulatory framework for the sector; and (vi) the prescription by the MoIT of rules for lawful interception. The Pakistan Prevention
of Electronic Crimes Act 2016 introduced sentencing and heavy fines for acts such as spam messaging, accessing of unauthorized data, acquiring or selling of identification information, tampering with a device identifier and the issuance of a SIM in an unauthorized manner. The powers of the Federal Investigation Agency have been enhanced in order to enforce this law. This has a direct impact on our business, as many of the usual forms of marketing in Pakistan are now prohibited by law. Sales Tax Act Following amendments to the Sales Tax Act 1990 in mid-2014, a requirement was imposed on operators to charge, collect and pay sales tax on the provision of SIM cards. Due to the high amount of competition in the market, we are unable to pass on the entirety of this expense to customers. |
Regulatory bodies |
The Ministère de la Poste, des télécommunications, des technologies et du numérique (the “MPTTN”) is responsible for shaping and directing Algeria’s telecommunications policies. The Autorité de Régulation de la Poste et des Communications Electroniques (the “ARPCE”), a body established as an independent and financially autonomous regulator, acts as an advisor to the MPTTN and is in charge of implementing policies and monitoring the market, ensuring effective competition, allocating
frequencies dedicated to telecommunications services and managing the numbering plan. Additionally, the ARPCE is responsible for the arbitration of disputes among operators and those between operators and end users. From January 2015, the ARPCE has been empowered to issue financial sanctions against operators who are not compliant with applicable law. In October 2015, a procedure to issue such sanctions was established. The Algerian National Competition Council governs competition matters. |
Regulatory framework |
The main elements of the regulatory framework applicable to the telecommunications sector in Algeria are embodied in the Post and Telecommunications Law of April 2018 (the "2018 Telecommunications Law"), which replaces a previous
telecommunications law of August 2000 and (i) establishes general rules for the organization of the postal and telecommunications sector; (ii) creates and determines the mandate of the national regulatory authority; (iii) defines general rules for the licensing and authorization of telecommunications networks and services; and (iv) introduces principles allowing the development of competition in the sector. Compared to the previous law, the 2018 Telecommunications Law: (1) envisions the introduction of mobile number portability; (2) introduces national roaming and obligation for operators to grant access to their network (3) recognizes the monopoly of Algeria Telecom on the provision of international services (voice and bandwidth); (4) gives Algeria Telecom the monopoly on National Backbone and Backhaul rollout and operation; (5) transfers
to the MPTTN management of the Universal Service; and (6) grants the ARPCE the power to impose sanctions on operators that provide services to unidentified subscribers. Pending publication of the implementation decrees related to the 2018 Telecommunications Law, the provisions of the former telecommunications law remain in force (at end of 2018, only one decree was published concerning the Universal Service). In November 2018, the ARPCE instructed operators on the interpretation of the 2018 Telecommunications Law regarding international traffic and optical fiber rollout. The ARPCE, together with the MPTTN, confirmed: (1) the right for operators to rollout and operate their own networks for their own use; and (2) the obligation of operators to use Algeria Telecom's infrastructure (including international switch) for all the international traffic. |
Licenses |
The
ARPCE is responsible for granting telecommunications licenses. A license can be issued to any physical or legal person who commits to comply with the conditions in the tender specifications. The procedure for a tender is determined by regulation. Mobile licenses are automatically renewed once the license owner has satisfied all of its obligations related to the operation of the network and the provision of services. Any refusal to renew a license must be for good cause, based on a ministerial decision and following a formal recommendation by the ARPCE. |
Retail market regulation |
According to the terms of their telecommunications licenses, Algerian operators must submit all their retail offers to the ARPCE for approval 30 days before introducing
such offers to the market. From January 2009 to May 2016, the ARPCE established rules regulating the promotions that mobile operators may offer. These rules limit the frequency and duration of promotions and, to some extent, reduced the intensity of competitive promotions. Since May 2016, these rules ceased to apply to mobile operators, providing Optimum more freedom in relation to its marketing strategies. |
Significant Market Power |
From February 2007 to September 2016, Optimum was designated as an SMP operator in the retail market for GSM communications by the ARPCE. As a result, Optimum was required to follow more stringent obligations as its retail tariffs were subject to non-discrimination and margin squeeze tests prior to approval by the
ARPCE. In September 2016, the ARPCE decided to withdraw the designation of Optimum as an SMP operator. Therefore, since the SMP regulations mentioned above no longer apply to Optimum, it now has more freedom in marketing and pricing its products and services. |
Mobile Termination Rates |
All interconnection agreements and interconnection prices must be approved by the ARPCE prior to becoming effective. The ARPCE monitors interconnection prices to ensure that they are cost based and reviews
such prices on an annual basis. From July 2006 to October 2018, the ARPCE set national termination rates for Optimum that were lower than those of other mobile operators. In the reference interconnection offer approved for the 2018/2019 period, the ARPCE imposed symmetrical mobile termination rates between the three operators both for voice and SMS. Optimum currently has interconnection agreements with the fixed incumbent operator, the other two mobile operators and the two currently authorized VoIP operators in Algeria. For a description of MTRs in Algeria, see Item 4.B — Business Overview. |
Mobile
Number Portability |
There is currently no number portability for mobile or fixed lines in Algeria. |
Data Protection |
The relevant data protection regulations are embodied in the Constitution, the penal code and the license terms. The new Algerian constitution states that the private life of citizens is inviolable and protected by law. Secrecy of correspondence and private communications,
in all its forms, is guaranteed. The protection of individuals with regard to the processing of personal data is a fundamental right guaranteed by the law that punishes a violation. The penal code defines the offense of deliberately violating the privacy of others by capturing, storing or transmitting, without authorization or consent of their author, communications or words spoken in private and refers to sanctions against persons or companies that fraudulently maintain databases or attempt to do so. According to their license terms, mobile operators must take measures to ensure the protection and confidentiality of personal information they hold or process or register within the client database, compliance with legal and regulatory provisions and confidentiality of information held on users
in its contractual relations with any subcontractors. The provision of cloud computing services is subject to obtaining an authorization granted by the ARPCE. Guidelines with respect to such authorizations were published in January 2018, which provide that the hosting and storage of customers' data must be undertaken in Algeria and certain other clarifications for companies that provide cloud services. A new personal data protection law was issued in 2018 which creates a new body in charge of all activities related to personal data protection. |
Other |
SIM card identification For
each SIM subscription, regulations in force require that operators collect and store the signed contract and a copy of the customer's identification. The new 2018 telecommunications law introduced a new penalty scheme for mobile operators failing to identify mobile SIM cards. Mobile operators may be fined DZD1,000,000 (US$8,400 as of December 31, 2018) per observed infraction and an additional penalty of DZD 5 000 (US$44) per day until the line is suspended. Spectrum neutrality Spectrum neutrality allows operators to use the allocated spectral resources
for providing 2G/3G and 4G services. In 2016, the principle of spectrum neutrality was enforced in all bands allocated to mobile operators under the supervision of the ARPCE. Optimum already uses part of the 900 MHz (GSM) for 3G purposes (U900) and part of the 1800 MHz band for6 4G purposes. Universal service of telecommunications In April 2015, the ARPCE launched a tender to select operators to provide universal services in 97 rural communes in over 28 provinces. Services provided through the framework of the universal service of telecommunications will be funded by the universal services fund. After a competitive tender in January 2016, Optimum now provides 37 communes representing more than 42% of the population covered in the framework offer. International
voice traffic To comply with the ARPCE's interpretation of the 2018 Telecommunications Law’s provision on International traffic, Djezzy and other mobile operators were obliged to commence negotiations in December 2018 with Algeria Telecom on technical and commercial conditions in order to switch to Algeria Telecom infrastructure. Djezzy will now be obliged to use not only Algeria Telecom's infrastructure but also its international switch. On the commercial side, Djezzy will have to pay an additional charge of 0.01 euros per international outgoing minute if Djezzy uses its own international carriers and a transit tax of 0.14 euros per minute for all international incoming traffic. |
Regulatory bodies |
The Bangladesh Telecommunications Regulatory (Amendment) Act, 2010 (the “BTRA”) introduced a separation of responsibilities between the telecommunications regulator and government ministry in Bangladesh. Under the BTRA, the responsibilities of issuing licenses for telecommunications systems and services, as well as the regulation of telecommunications activities, are assigned to the Bangladesh Telecommunication Regulatory Commission ("BTRC"). However, the supervision of telecommunications licensees and the approval of the BTRC’s proposals for issuing licenses was transferred to the Posts and Telecommunications Division (“PTD”) (within the Ministry
of Posts, Telecommunications and Information Technology of Bangladesh). As a result, the BTRC is currently the executive body for telecommunications policies, while the PTD supervises and monitors all activities of the BTRC. |
Regulatory framework |
The main elements of the regulatory framework for the telecommunications sector in Bangladesh are embodied in the BTRA, which establishes rules relating to the supply of telecommunications services in Bangladesh. Pursuant to the BTRA, the BTRC has issued many regulations, directives, policies, and guidelines for the telecommunications industry, including the Bangladesh Telecommunication Regulatory Commission (Licensing Procedure) Regulations, 2004, the International Long-Distance Telephony Service (ILDTS) policy, guidelines for infrastructure sharing, and regulatory and licensing guidelines
for nationwide telecommunications transmission networks. |
Licenses |
The issuance of any telecommunications license is at the sole discretion of the BTRC, subject to approval from the PTD. The BTRC must submit a report to the PTD for its approval, prior to granting any license. The BTRC reserves the right to set the criteria and conditions for license eligibility, to specify any applicable fees and charges and to determine the duration and conditions of any license. Generally, licenses are issued for a certain period of time subject to renewal, and the applicable validity period, renewal requirements and other conditions are set out in the license. In addition,
the provisions of the BTRA grant the BTRC the power to renew, suspend, cancel and control the transfer of licenses. The BTRC, with the prior permission of the PTD, may amend any condition of any license issued pursuant to the BTRA, and the PTD, on its own initiative or, at the request of a licensee, may instruct the BTRC to amend any license condition. On February 13, 2018, the BTRC awarded us the 4G/LTE license. At the same time, we have also acquired 5 MHz and 5.6 MHz Spectrum in 2100 MHz and 1800 MHz, respectively, and converted the remaining 900 MHz and 1800 MHz tech neutral spectrum for 4G. |
Mobile Termination Rates |
For international incoming
calls, MTR in 2018 was reduced to BDT 0.14 (US$0.0017) as compared to the 2017 and 2016 historical periods. The international termination rate was changed, effective February 22, 2018, after which the maximum and minimum termination rates became US$0.025/min and US$0.0175/min, respectively. Revenue share is done on the minimum termination rate while respective MNO gets 22.5% of that amount. The domestic termination rate has been changed to BDT 0.14/min or US$0.0017/min (terminating MNO gets BDT 0.10 (US$0.0012) and ICX gets BDT 0.04 (US$0.0005)), effective August 14, 2018. |
Mobile Number Portability |
On July
24, 2017, the BTRC issued a new licensing guideline for MNP service providers through which third party entities have been awarded a license to provide MNP service across the country. On October 1, 2018, MNP was launched nationwide. |
Data Protection |
There is currently no legislation in Bangladesh specifically on data protection. However, pursuant to some of our licensing terms and BTRC directives, we may be prohibited from sharing customer data. |
Other |
New
Number series (014): Allocation of a new number series (014) prefix occurred on September 6, 2018. Specifically, number block 0140-XXXXXXX from prefix 014 has been allocated to Banglalink. Banglalink launched its 0140 series on November 29, 2018. Unified tariff: BTRC issued a letter on August 13, 2018. As per the letter, voice tariffs for all the operators both for on-net and off-net should be a minimum of 0.45/min and maximum of 2.00/min (excluding VAT and other charges). Banglalink has implemented this tariff plan from October 14, 2018 as the BTRC instructed. Tower
License: Regulatory and Licensing Guidelines for Issuing License for Tower Sharing in Bangladesh was published by the BTRC on April 1, 2018. The BTRC selected four of the eight entities who applied for the license. This introduces a new regime for Bangladesh where the mobile operators are not allowed to build their own towers. Significant Market Power ("SMP") Regulation: The BTRC issued a gazette notification regarding SMP on November 14, 2018, and subsequently declared GrameenPhone an SMP on February 10, 2019, and imposed several restrictions on the operator. QoS Guideline:
On November 11, 2018, the BTRC published ANS Operators Quality of Service (QoS) Regulation 2018, which regulates the QOS of Access Network. E-Registration: The BTRC issued a letter on August 28, 2018 regarding implementation of the Electronic Telecom Subscriber Acquisition Form (ETSAF). In accordance with the letter, banglalink launched an electronic and paperless SIM registration process beginning September 3, 2018. Under the new process, a customer needs only to share his or her name, ID number, date of birth, present address and fingerprints with the retailer when purchasing a new SIM. USSD Tariff:
The BTRC issued a directive on August 14, 2018, establishing a fixed uniform unstructured supplementary service data (USSD) tariff. DOB Directive: The Directive on Direct Operators Billing ("DOB") was published on the November 3, 2018 by the BTRC and introduces a DOB option in Bangladesh. The limit for payment is BDT 600 per month and BDT 3,000 per year. National Frequency Allocation Plan (NFAP): On November 11, 2018, the BTRC shared a draft of the revised
National Frequency Allocation Plan (NFAP) for public consultation and feedback from the relevant stakeholders. Telecommunication Value Added Service (TVAS) Licensing: The BTRC has published new guidelines for value added services that requires Value Added Service (VAS) vendors to be enlisted by the BTRC and the ANS operators are bound to source external VAS only from these vendors. |
Regulatory
bodies |
Pursuant to the Ukraine Telecommunications Law (“UTL”), the main governmental authorities that manage the telecommunications industry in Ukraine are the Cabinet of Ministers, State Service of Special Communications and Information Protection of Ukraine (the “Administration”) and the National Commission for the State Regulation of Communication and Informatization (“NCCIR”). The Cabinet of Ministers is responsible for forming general policy, ensuring equal rights for developing the forms of ownership, managing state-owned assets and directing and coordinating ministries and other central governmental bodies in the area of telecommunications. The Administration develops state policy proposals
in the area of telecommunications and is responsible for their implementation within its authority granted by law. The Administration also has the authority to prepare draft legislation and define the quality requirements for telecommunications services and technical standards for telecommunications equipment. The NCCIR is the main regulatory and controlling body in the area of telecommunications and use of radio frequencies. The NCCIR issues licenses for the provision of licensed telecommunications services and the use of radio frequencies, maintains registries of telecommunications operators and providers, allocates numbering capacity to telecommunications operators and controls the quality of telecommunications services. |
Regulatory framework |
The
UTL and the Ukraine Frequency Law (“UFL”), both as amended from time to time, are the principal laws regulating the Ukrainian telecommunications industry. The UTL includes various regulations by the Ukrainian Government and other governmental authorities to supplement the legal framework of the telecommunications industry. The UTL sets forth general principles for the regulation of the telecommunications industry in Ukraine, including a description of the institutional framework for the government’s involvement in the regulation, administration and operation of the telecommunications industry in Ukraine. The UFL regulates the allocation and use of the frequency bands in Ukraine. The most important aspects of the law with respect to our business include the state government’s authority
to: license communications service providers; allocate radio frequencies; certify telecommunications equipment; allocate numbering capacity; ensure fair competition and freedom of pricing and develop and implement government policy on telecommunications and frequency allocations; and conduct oversight of operators’ compliance with the terms of their licenses and Ukrainian law. |
Licenses |
In accordance with Ukrainian legislation, licenses to provide telecommunications services stipulate that the telecommunications operator’s activity involve the use of a radio frequency resource and the license to provide telecommunications services are issued at the same time as the license for the use of radio frequency. If the demand for radio frequency exceeds availability, licenses are issued based on the results of a tender or auction held
by the NCCIR. Licenses are issued for a term of five to fifteen years. The NCCIR has the right to extend the existing license at the request of the operator, or to take a negative decision if, at the date of filing of the application for an extension, violations of licensing conditions by the operator have been recorded and such violations have not been cured. After obtaining a license to provide telecommunications services and the use of the radio frequency resource, telecommunications operators are required to obtain permission to operate Radio Electronic Facilities ("REF") and private radio networks (radio transmitters, base stations, and microwave links). In accordance with the law on the radio frequency resource in Ukraine, permissions for REF are issued for a period not exceeding the period of validity of the relevant operator’s licenses for the use of radio frequency
resource. The permit may be extended at the request of the operator to the NCCIR. The NCCIR will extend the license unless a violation of the licensing conditions has occurred and as long as there are no preconditions, such as the refarming of frequencies or the introduction of new radio technologies, for the termination of a specific radio technology in the radio frequency band. |
Mobile Termination Rates |
The UTL allows telecommunications operators, including wireless service operators,
to establish tariffs for the telecommunications services provided to customers, with the exception of tariffs on universal services and data traffic channeling by SMP telecommunications operators. For a description of MTRs in Ukraine, see “Item 4-Information on the Company-Interconnection Agreements.” Effective January 1, 2019, MTR rates in Ukraine are reduced from UAH 0.15/min to UAH 0.12/min. IMTR rates remain at current rate EUR 0.10/min. |
Significant Market Power |
The NCCIR regulates telecommunications services,
studies the competitive environment in the telecommunications market, determines SMP operators and regulates interconnection tariffs charged to access SMP operators’ and dominant operators’ networks and the technical, organizational and economic terms of interconnection agreements involving such operators. An operator is presumed to have SMP if it has a share of more than 25% of the total revenue of all telecommunications operators and providers operating in the respective telecommunications services market. On October 20, 2011, the NCCIR determined the SMP operators in the markets for terminating calls on fixed-line and mobile networks and on December 1, 2011, it approved mandatory interconnection tariffs for the SMP operators in such markets. Our operations in the Ukraine are deemed to have SMP and are subject to these regulations. The NCCIR is planning to introduce
changes in the UTL defining SMP for different markets. A law titled “On electronic communications” is expected to be adopted in 2019, and, among other things, it increases the authority of the national regulatory authority to analyze communication services markets to determine significant market power operators. The draft legislation also includes a new list of regulatory restrictions for significant market power operators, including controls on wholesale and retail tariffs and infrastructure sharing and an obligation to verify all subscribers. As the legislation has yet to be adopted, it is unclear what effects these new provisions will have. |
Mobile Number Portability |
Although MNP has not
yet been implemented in Ukraine, the government has passed legislation requiring mobile operators to provide a national roaming service and to provide customers with the ability to transfer their mobile numbers from one telecommunications network to another. The technical requirements for MNP implementation were approved in 2017. The implementation of MNP will commence on May 1, 2019. MNP benchmarks in the CIS did not have a strong impact on total market because of bureaucracy, the fee burden and the alternative of buying a second SIM to decrease expenses. For example, the ratio of port-out subs in total subs base in the first year of MNP in Russia and Kazakhstan was low. Kyivstar expects the same impact for the Ukrainian market. |
Data Protection |
According
to “On Protection Of Personal Data,” Law of Ukraine of June 2010, personal data is defined as the information or aggregate information about a natural person who is identified or may be identified (e.g. name, ID number, and passport data). In Ukraine, most customers are not identified. However, content, traffic and location are defined as customer’s data. The transmission of personal data requires the transferor to obtain consent from the person whose personal data is being transferred. The party to which the personal data is transferred is required to have implemented the requirements of the Law of Ukraine On Protection of Personal Data. This law is not expected to have a significant impact on Kyivstar’s operations. Personal data may only be transferred to foreign parties in the specific cases stipulated by law or an international treaty and only on the condition that an adequate
level of personal data protection is ensured by the relevant foreign state. Part 3 of art. 34 of the Law of Ukraine “On telecommunications” requires telecommunications operators and providers to ensure and be responsible for protecting the confidentiality of information concerning customers which was made available to them at the time of entering into a telecommunications services agreement. Information concerning the consumer and concerning the services they have received may be provided in observance of the procedure defined by the law. In all other cases, the information described above may only be disclosed subject to the customer's written consent. The draft law to align Ukrainian legislation to EU GDPR has been considered and revised since October 2018. This process is driven and
coordinated by Ukrainian Parliament Commissioner for Human Rights (Ombudsman) in cooperation with Twinning projects of the EU Commission. |
Other |
SIM re-verification A law entitled “On electronic communications” is expected to be adopted in 2019, and, among other things, it includes a new obligation to verify all subscribers. The entry into force of the requirements is expected to be a year and
a half from the date of adoption of the law. Expenses of all operators are expected to increase due to the initial investment required for implementation. Sanctions regimes imposed against Ukraine For a discussion on current sanctions regimes and their effect on our business in Ukraine, see “— Sanctions Regimes. For a discussion of the risks to our business as a result of the current sanctions regimes, see Item 3.D. Risk Factors — Markets Risks — "Our operations may be adversely affected by ongoing developments in Russia and Ukraine." |
Regulatory bodies |
The government authority responsible for supervising the telecommunications industry in Uzbekistan is the Ministry for Development of Information Technologies and Communications of the Republic of Uzbekistan. In accordance with the Uzbek Telecommunications Law, businesses offering communications services in the Republic of Uzbekistan may be privately or publicly held by Uzbek or foreign national individuals or legal entities. All owners of telecommunications networks have equal rights and enjoy equal protection guaranteed by the law, and the legislation imposes no restrictions on
foreign investors. The State Inspectorate for Supervision of Informatization and Telecommunications is responsible for monitoring compliance by telecommunications companies with license requirements and conditions. The State Committee of the Republic of Uzbekistan for Assistance to Privatized Enterprises and Development of Competition is a government body that focuses on the expansion of economic reforms, acceleration of denationalization and privatization processes, and provision of development and support of private entrepreneurship in Uzbekistan. |
Regulatory framework |
The main statutes that govern the telecommunications industry in Uzbekistan are (i) the
Uzbek Communications Law dated January 13, 1992 (as amended); (ii) the Radio Frequency Spectrum Law dated December 25, 1998; (iii) the Protection of Consumers’ Rights dated April 26, 1996; (iv) the Uzbek Telecommunications Law dated, August 20, 1999; (v) Licensing Certain Types of Business, dated May 25, 2000; and (vi) the Uzbek Competition Law, dated January 6, 2012. These laws determine the general legal and economic basis for organizing communications systems, establishing rights and duties of a company in terms of ownership, use, disposal and management of communications equipment when
setting up and operating communications networks and providing communications services. The most important aspects of the law with respect to our business include the federal government’s authority to: license communications service providers; allocate radio frequencies; certify telecommunications equipment; allocate numbering capacity; ensure fair competition and freedom of pricing; and conduct oversight of operators’ compliance with the terms of their licenses and Uzbek law. |
Licenses |
The issuance of any telecommunications license is at the sole discretion of the Ministry for Development of Information Technologies and Communications. The Ministry will take a decision on issuing a license within 30 days from the date when an application
is filed. The Ministry can deny issuing a license only if: the presented documents are not properly executed; the documents contain false information; or the applicant does not meet the license terms and requirements. The law does not provide any further grounds for denial. Licenses are issued for a set period from five to fifteen years, subject to renewal, and the applicable renewal requirements and procedures are the same as for obtaining the license. In addition, the Ministry has the power to renew, suspend, cancel and control the transfer of licenses. On March 31, 2017, the Republican Radiofrequencies Council in Uzbekistan published a decision ordering the equitable reallocation amongst all telecommunications providers in the market,
which will affect approximately half of the 900 MHz and 1800 MHz radio frequencies of our Uzbek subsidiary, Unitel LLC. The decision came into force on March 31, 2018, and, was successfully executed by Unitel. The decision also granted tech neutrality in the 900 MHz and 1800 MHz bands. |
Mobile Termination Rates |
Local MTRs are currently not regulated in Uzbekistan. Pursuant to current legislation, MTRs are determined on the basis of the contracts between operators. However, if operators cannot agree on the MTR cost, the regulator can establish such cost itself based on prescribed methodologies. Due to the inclusion of Unitel LLC on the list
of SMP operators, the State Committee of the Republic of Uzbekistan for Assistance to Privatized Enterprises and Development of Competition adopted a decision requiring Unitel LLC to establish consistent MTRs for all operators. Based on this decision, other operators filed claims with the court to establish MTR in the amount of UZS 0.05 and won. For a description of MTRs in Uzbekistan, see “Item 4-Information on the Company-Interconnection Agreements.” |
Significant
Market Power |
On September 19, 2013, Unitel was deemed to be a company with SMP. A position is said to be dominant where a business or group of persons has a market share of 65.0% or more. Nevertheless, if a business holds a market share of between 35.0% and 65.0%, it may be deemed to have a dominant position, subject to a determination by the State Committee of the Republic of Uzbekistan for Assistance to Privatized Enterprises and Development of Competition based on the size of market share, the stability of the business’s market share, the share taken by competitors, the ease of access to the market for new competitors and other criteria relevant to the given market. Since November 2, 2013, Unitel LLC is required
to submit all of its tariffs to the Ministry of Finance of Uzbekistan for approval. Despite numerous attempts by Unitel LLC to obtain approval in accordance with the Uzbek Competition Law, the Ministry of Finance has not yet granted such approvals. In 2016, the regulator introduced a tax rate of 50% of profits for mobile operators that have profitability over 20%. After new tariffs were submitted in 2016, we were informed by the regulator that this tax rate includes approval of tariffs, therefore making it unlikely that the regulator will provide Unitel with any other approval. In March 2018, Unitel LLC raised its prices and has made declarations regarding these price increases to the Ministry of Finance, following receipt of a letter from the Ministry of Finance regarding increased profits
taxes on Unitel. In April 2018, amendments to the regulation on determination of monopolistically high and low prices (Resolution of Cabinet of Minister No. 249 dated March 30, 2018) were introduced that do not require the antitrust authority to pre-approve a company’s price increases. Instead, Unitel files information on its current prices quarterly, and should the antitrust authority discover a violation of antitrust legislation based on the information presented, it requests more detailed information and documentation for further investigation. |
Mobile Number Portability |
In 2018, the Ministry for Development of Information Technologies and
Communications introduced a draft resolution on MNP. The resolution is under discussion. If adopted, it would result in the introduction of MNP in Uzbekistan. According to the latest version of the draft resolution, customers would be charged a nominal fee to port numbers. |
Data Protection |
Currently, data protection is regulated by Uzbek Laws “On Informatization” and “On Principles and Guarantees of Freedom of Information,” as well as by the Regulation on the Order of Documentation of Information, Registration of State Information Resources approved by an Order of the Ministry for Development of Information Technologies and Communications. Under these laws, personal data and other confidential information cannot be collected and distributed without the consent of the
owner of such information. Additionally, transfer of such data abroad is limited. There are currently gaps in legislation and therefore it is a common practice to send requests to authorized state bodies for official clarification on certain issues. Unitel LLC received an official letter of the Ministry for Development of Information Technologies and Communications clarifying that customers’ personal data cannot be transferred abroad and access from abroad cannot be granted to databases containing such information. There is a draft of a new Law on Personal Data, which was expected to be adopted in 2018, but this has not yet occurred. |
Regulatory bodies |
Under the Kazakhstan Communications Law dated July 5, 2004 (the “Kazakhstan Communications Law”), the Ministry of Information and Communication (the “MIC”) is the central executive body authorized to implement state policy and governmental control with respect to telecommunications and to adopt relevant acts. The Government sets forth the procedures and one-off payment rate to access frequencies for the provision of telecommunications services. The Inter-Agency Commission on Radio Frequencies, a consultative-advisory
agency of the Kazakh government, provides recommendations on government policy regarding frequencies. The National Security Committee and certain other governmental defense bodies also maintain a level of control over the telecommunications industry as part of their investigative operations. Competition matters in Kazakhstan are regulated by the Committee on Regulation of Natural Monopolies, Protection of Competition and Consumer Rights (the “Antimonopoly Committee”) of the Ministry of the National Economy. The Antimonopoly Committee is authorized to prepare and implement state policy for the protection of competition, for example, by coordinating with state authorities, reviewing compliance with competition laws, conducting investigations and approving concentrations of entities. |
Regulatory framework |
The
Kazakhstan Communications Law is the principal act regulating the telecommunications industry in Kazakhstan and sets forth general principles for the regulation of the telecommunications industry, the authority of each regulatory body, the rules governing telecommunications network cooperation and consumer rights protections. The Kazakhstan Communications Law grants the Kazakh government broad authority with respect to the telecommunications industry in Kazakhstan. The most important aspects with respect to our business include the government’s authority to develop and implement government policy on telecommunications and frequency allocations; regulate radio frequencies conversion; and approve procedures for auctions of telecommunications licenses. The participation of foreign capital in Kazakhstan’s
telecommunications market is limited by law. It is forbidden for foreign legal entities or individuals to control and operate backbone networks without the establishment of a legal entity in Kazakhstan and to obtain more than 10.0% of voting shares in an ILD operator without MIC consent, as well as the consent of national security authorities. In addition, foreign legal entities or individuals are not allowed to possess, use, dispose of or control (directly or indirectly) more than 49.0% of the total voting shares of an ILD operator who possesses surface communication lines (cables, including fiber optic and radio-relay cables) without governmental consent, based on the conclusion of MIC, as well as the consent of national security authorities. In addition, all telecommunications operators in Kazakhstan are required to maintain control centers of their networks, which are responsible
for monitoring, incident management, planning work and management reporting within the territory of Republic of Kazakhstan, and the management of such networks is not permitted to be transferred in any form to other persons. |
Licenses |
In accordance with legislation of the Republic of Kazakhstan, licenses to provide telecommunications services are issued by the Ministry of Information and Communication. The Law “On Permits and Notifications” regulates permits, certain types of activities or actions and the procedures for issuing and re-issuing permits. A license to provide telecommunications services is a first class permit, meaning it is inalienable and without a time limit. In addition to obtaining a license, wireless telecommunications
operators must have a permit for radio frequency usage for every radio transmitter that they operate. Permits for radio frequency usage are issued by the Ministry of Information and Communication. Under the Kazakhstan Communications Law, permits for the use of radio frequencies are subject to extension every year after the payment of the frequency fee for the first quarter of the current year. Radio frequency permits may be suspended or terminated for non-usage of assigned spectrum within one year and failure to comply with the conditions to which the frequency allocation was subject. |
Mobile Termination Rates |
The structure of interconnect agreements is set by the MIC and dominant operators are required to enter into an interconnect agreement with any operator requesting interconnection. |
Significant
Market Power |
In 2007, KaR-Tel was deemed to be a company with SMP and was included in the list of dominant companies in terms of mobile services. As a result, the company is subject to the regulated market and has a range of obligations and limitations on pricing. On January 1, 2017, the Entrepreneurial Code abolished the list of dominant companies. As a result, though Kar-Tel is still designated as a company with SMP and thus the subject of antimonopoly legislation and monitoring, as of January 1, 2017, Kar-Tel no longer has to fulfill several obligations imposed by being on this list, such as regular reporting to the antimonopoly
agency. |
Mobile Number Portability |
MNP was launched on January 1, 2016. There is currently no charge for customers to port numbers, and mobile operators are required to pay annual fees for the maintenance of the MNP data base. In 2016, the annual cost for KaR-Tel was approximately US$335,759. In 2017, the price for MNP data base maintenance was decreased by 26% to approximately US$245,308. KaR-Tel’s business has not been significantly affected from the implementation of mobile number portability. |
Data Protection |
The Law of the Republic of Kazakhstan on Personal Data and Its Protection (the “Kazakhstan
Data Law”) was adopted in 2013. It includes requirements with respect to gathering, processing, storing and the protection of personal data. Personal data may only be stored in Kazakhstan. There is a mandatory requirement to have a written or electronic signature consent for gathering and processing personal data, and cross-border transfers. In 2017, a new provision was introduced into the Kazakhstan Data Law which states that cross-border transfers of service information that contains certain personal data will be subject to the Kazakhstan Communications Law. Pursuant to the Communications Law, such service information about subscribers may only be stored in Kazakhstan, and cannot be transferred abroad unless through roaming services. Since 2018, in accordance with a new provision of the
Kazakhstan Communications Law, employees who work with service information on subscribers must be citizens of the Republic of Kazakhstan. The transfer in any form from telecom operators to other persons of management over communication networks is prohibited. |
| This ‘20-F’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 5/1/19 | ||||
| Filed on: | 3/14/19 | 6-K, IRANNOTICE | ||
| 2/10/19 | ||||
| 1/1/19 | ||||
| For Period end: | 12/31/18 | |||
| 12/25/18 | ||||
| 11/29/18 | ||||
| 11/14/18 | ||||
| 11/11/18 | ||||
| 11/3/18 | ||||
| 11/1/18 | ||||
| 10/22/18 | ||||
| 10/14/18 | ||||
| 10/1/18 | ||||
| 9/20/18 | ||||
| 9/6/18 | ||||
| 9/3/18 | ||||
| 8/28/18 | ||||
| 8/14/18 | ||||
| 8/13/18 | ||||
| 7/1/18 | ||||
| 6/4/18 | ||||
| 5/24/18 | ||||
| 4/12/18 | ||||
| 4/6/18 | ||||
| 4/1/18 | ||||
| 3/31/18 | ||||
| 3/30/18 | ||||
| 3/12/18 | ||||
| 2/22/18 | 6-K | |||
| 2/13/18 | ||||
| 1/29/18 | ||||
| 1/22/18 | ||||
| 7/24/17 | 6-K | |||
| 7/14/17 | ||||
| 5/15/17 | ||||
| 3/31/17 | ||||
| 1/1/17 | ||||
| 9/30/16 | F-3 | |||
| 7/20/16 | ||||
| 1/1/16 | ||||
| 12/11/15 | ||||
| 12/1/13 | ||||
| 11/2/13 | ||||
| 9/19/13 | ||||
| 1/6/12 | ||||
| 12/1/11 | ||||
| 10/20/11 | ||||
| 7/27/06 | ||||
| 7/5/04 | ||||
| 5/25/00 | ||||
| 8/20/99 | ||||
| 12/25/98 | ||||
| 4/26/96 | ||||
| 1/13/92 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 3/15/21 VEON Ltd. 20-F 12/31/20 149:25M |