Ukrtelecom 2016

The modernization of Ukrtelecom

3700 of cabinets

400 MILLION USD The total amount of investment in telecommunications infrastructure

New Internet speed up to

1 Gbit/s

The modernization

of the network and extension of Internet coverage

What is the modernization of Ukrtelecom The Ukrtelecom clients will have at home european quality services on the lowest price in Europe FOR UKRAINIAN • The cheapest high-speed Internet in Europe.

• Stable and fast Internet simultaneously on all devices, no matter on TV or smartphone or anywhere else.

Uploading of a 3 minute video to YouTube in 60 seconds

Interactive uninterruptible TV in HD and Ultra HD

Calculations are made based on the fact that the speed of 50 Mbit/s allows to transfer 6.25 МB of data per second

The possibility to connect SIP-telephony allows: • take your home phone calls on your smartphone; • make calls from a mobile phone on home phone on tariffs for municipal communications

50 Mbit/s

Downloading of music album in 3 minutes

3

Uploading of photo album for 100 photos in 4 minutes

4

FOR THE

COMMUNICATIONS INDUSTRY • Modernization of the largest fixed telecommunication network in Ukraine.

• New transport network.

• Expansion of Internet coverage in small towns.

• Infrastructure for Smart City.

• Modernisation will cover six cities: Kyiv, Odessa, Dnipro, Lviv, Zaporizhia and Kharkiv.

Stable operation of the network due to copper cable thefts reduction

Аpproximately 300 thousand subscribers will get the access to the new equipment in 2016 • New speed — up to 1Hbit/s.

• New technologies: VDSL, GPON. • New services: SIP-telephony, multiscreen IPTV, advanced cloud technologies for business.

Replacement of old copper cable to fiber optic

3700 of cabinets will be set up instead of 274 Central Offices where telecom equipment is located by the end of 2018

IT infrastructure upgrade in Ukraine Ukrtelecom can increase global competitiveness and innovation index of the country due to significant investment in IT infrastructure GLOBAL COMPETITIVENESS INDEX 2015

GLOBAL INNOVATION INDEX 2015

Modernization will improve the IT infrastructure that will increase Ukraine's positions in the rankings. It will improve the position of the following indicators:

69%

Internet access in schools *

Government’s online service

Ukrtelecom plans to set up a new equipment in 400 small towns, where for the first time fixed internet will appear

Ukrtelecom provides services to socially important public services

54%

8,4 of 100 people

FDI and technology transfer **

0,3

0,4

Online E-Participation

Ukrtelecom plans to invest 250 million USD in the renewal of fixed networks in the next three years

Modernization of Ukrtelecom creates a new IT infrastructure the basis for Smart Government

Internet bandwidth ***

Video uploads on YouTube

Every eighth citizen of Ukraine (aged 0-69 years) will have access to high-speed Internet

Due to the expansion of Internet coverage of Ukrtelecom by 4%

78,6%

MODERNIZATION OF OF UKRTELECOM WILL PROVIDE A NEW QUALITY OF SERVICES FOR SPECIAL CATEGORIES OF CONSUMERS AND SOCIALLY IMPORTANT FACILITIES Ukrtelecom provides communications:

270 thousand of veterans and combatants

•

77 thousand people with disabilities

The forecast of Ukrtelecom, based on rankings indexes * Higher education and training index of GCI ranking — 5.06. ** Technological readiness of GCI ranking — 9.03. *** Technological readiness of GCI ranking — 9.06.

Ukrtelecom provides services:

2620 law enforcement facilities

2240 health facilities and ambulance stations

2000 Ministry of Defence of Ukraine facilities

Infrastructure index of GII ranking — 3.1.3.

Infrastructure index of GII ranking — 3.1.4.

Creative outputs index of GII ranking — 7.3.4.

The largest investment in fixed telecommunication network The funding of Ukrtelecom modernization is a positive sign for foreign investors 68 billion UAH Investment in the modernization of Ukrtelecom ($400 million USD) exceeds export volume of telecommunications services ($353 million USD) by nearly 50 million USD.

Due to the investment the share of telecommunications sector in GDP will increase from 3 to 4% in 2019 *.

2015 68 billion UAH

2019 GDP structure

The reserves for future projects

250 million within 3 years

The total amount of investment in modernization is equal to 1/6 of all investments in telecommunications industry since Ukraine's independence.

TECHNICAL PARTNER OF THE PROJECT HUAWEI

FINANCIAL PARTNER OF THE PROJECT CHINA DEVELOPMENT BANK

Huawei's revenues in 2015 was 60.8 billion USD , net profit - 5.7 billion USD.

Bank holds active role in the financing of infrastructure projects in various countries.

The company was involved in modernization of the networks of more than 120 operators worldwide.

Bank's assets amounted to 12.3 trillion yuan (1,7 trillion USD) in 2015.

And in comparison, assets amount of ukrainian Oschadbank amounted to 5,7 billion USD (as of 31.12.2015).

* Calculated based on World Bank forecasts of GDP growth in 2019 to 8%.

Ukrtelecom’s calculations according to: • State Statistics Service of Ukraine; • National Bank of Ukraine.