Utel (cancelled)

cancelled

Utel was created to provide long distance phone services in Ukraine in 1992. The company was created as a joint venture between the state local incumbent Ukrtelecom (51%), AT&T (19.5%), Deutsche Telecom (19.5%), and PTT Telecom of the Netherlands (10%). The company was formed as a way to attract resources for reconstruction of Ukraine's national telecommunications system. The digital network of Utel captured most of the traffic in the country by 1997. The Ministry of Communications urged Utel to invest profits generated from high tariffs in long-distance calls into the development of non-profitable local networks in rural areas. By 1997, Utel was the only source of financing available for the development of local networks. Utel reinvested all profits into the development of Ukraine's telecommunications infrastructure. By the end of 1996, Utel's investments into Ukraine's telecommunications system amounted to US$138 million (two international gateways were opened, with a third gateway on the way, and 25 new digital long-distance exchanges were built in the major cities of Ukraine). Utel also opened a computer center, a corporate network, and operations and maintenance centers throughout Ukraine. By the end of 1996, Utel had connections with 36 operators in 32 countries through 2,918 international channels, 85 percent of them digital. In early 1998, the Ministry of Communications decided to restructure the telecom operators in Ukraine, and combined them under one state-run entity. During 1999, the government was trying to convince its private partners to sell their shares in Utel to the government so that Utel could be packaged with the incumbent Ukrtelecom for privatization. In 2001, Ukrtelekom bought out the stakes of the private companies in Utel. The assets of Utel were combined to Ukrtelekom's assets, and Ukrtelekom was to privatized some time in 2004 at the earliest.