The currency peg in paying for content, equipment costs and network maintenance force providers to increase prices
On September 1, 2015, the price of TV and Internet services of one of the largest providers in Ukraine Volia (serving 1.5 million subscribers) will experience an average increase by 10-15%. This is comes out of the price-list published on the company’s official web site.
Plus to the bill
More specifically, the TV package Optimal in all urban communities of Volia’s coverage will go up by UAH 9, i.e from UAH 119 to UAH 128 per month. For the digital TV package Vsesvit (World) the Kyiv subscribers will have to pay more by 19.4% (UAH 113/month will turn to UAH 135\months). The company also increased prices of Internet. Thus, for the unlimited package Internet 100 the subscribers will pay UAH 125/month, which is UAH 9 more than now. The subscription fee of the tariff plan Maximum will increase from UAH 16 to UAH 149 per month.
Volia is not the only operator to decide on raising prices of its services. Some operators did not wait for the autumn and changed their prices just in the summer. For example, Lanet Company made changes to its tariff policy since July 16. The provider renamed the TV package Social as Osnova (Basis) (46 Ukrainian TV channels) and raised its price twice, i.e. from UAH 15 per month to UAH 30. The package Basic got more expensive by UAH 30 (UAH 65 instead of UAH 35/month).
We draw the attention of users of integrated tariff packages Internet + TV, connected to the television services, that raising prices of TV-packages will increase the total monthly payment, according to the provider’s statement.
Reasons for increasing
The company is forced to change prices due to the increased cost of services since the beginning of 2015. It also concerns the service of accessing packages of TV programs and Internet, as informed to LigaBusinessInform by Wladyslaw Wojtowicz, the Head of Public Relations at Volia. At the same time, he said that the price of package remained the same for 20% of subscribers.
The cost increase is due to higher prices of content (particularly when they are pegged to foreign currency), as well as fees for external Internet channels. In addition, there increased costs of electricity (in April-May), utilities, rent, procurement of equipment and consumables, as well as the contractors’s services also got more expensive, as the manager sums up.
The Lanet Company specifies: The price of TV services depends directly on paying royalties to the right holders, which in turn are pegged to the dollar. The cost of equipment and consumables, required to ensure the quality operation and modernization of cable network, also increased severalfold, as reported by the company. Lanet also points out that the company restored broadcasting of pay-TV channels like Football 1/HD and Football 2/HD.
Promotions and Savings
Vadim Sidorenko, Director of the Kyiv provider Triolan told LІGABіznesІnform that his company had raised Internet tariffs over six months ago, and it would not intend to change the tariff policy in the nearest future. We have near the most expensive Internet on the market, i.e. UAH 120 per month. Therefore, further increase makes no sense. We will consider this possibility after increasing prices of other providers’ services, as he adds.
Many Ukrainian providers offer promotional discounts to their new subscribers. For example, Volia offers newcomers a tariff plan covering unlimited Internet and over 105 TV channels just for UAH 45 per month. However, it is effective only for 4 months. And Odessa provider Tenet runs a promotion called 4 months for the price of one.
Sidorenko suggests that it is due to such promotions the subscribers would save on Internet and TV services. And some subscribers in terms of saving may reject television at all. As for the time being, almost all Ukrainian TV channels are presented over the Internet, and it is possible to find paid content there as well, as he believes.