The operator will sell branded smartphones

The largest mobile operator in the country, Kyivstar, has decided to start selling smartphones under its own brand. Its competitors, MTS and Astelita, already have similar offers. However, Kyivstar has more ambitious plans - within a year the company promises to occupy half of the market in the lower price segment. The main obstacle to this is the operator’s lack of strong retail of its own.

Yesterday Kyivstar presented three models of branded phones from Chinese Huawei. "Kyivstar Aero" - a phone with a three-inch touch screen (649 UAH) and two smartphones on the Android platform (versions 2.2 and 2.3) - "Kyivstar Terra" (1199 UAH) and "Kyivstar Aqua" (1699 UAH). The devices will only work with a Kyivstar SIM card. When purchasing a phone, subscribers are offered unlimited Internet access for 1 UAH per day.

Until now, Kyivstar has been skeptical about the idea of selling phones, saying that this is not their business. But the emergence of inexpensive and high-quality Chinese devices has changed the company’s position, says Alexey Kireev, director of product development and new business. “The Ukrainian mobile device market is emerging from the crisis, the demand for smartphones is growing. And these devices are capable of occupying a significant share in the lower price segment,” he adds.

Smartphones now have the highest sales growth rates - in a report on the results of the second quarter of this year, GfK Ukraine noted that this segment has more than doubled - to 249 thousand devices compared to the same period last year. Retailers note that the growth rate will increase with sufficient supply in the lower price segment - up to UAH 2 thousand. “We expect to occupy up to half of the market for smartphones priced from $150 to $300 within a year,” says Mr. Kireev.

Kyivstar's competitors are already selling branded phones. In 2009, MTS-Ukraine released a budget Alcatel phone, and last year it began selling phones to the Chinese ZTE. By the end of the year, the company promised to introduce an Android smartphone on the Ukrainian market - in Russia, the parent company already sells three models priced from 4,290 rubles. up to 6490 rub. (1050-1590 UAH). Since December 2010, Astelit has also been selling Android smartphones produced by Huawei. The operator started selling the device for 999 UAH with a contract connection, but now its price has increased to 1299 UAH.

Operators assess sales of branded devices as successful. “The first batches were sorted out in almost a week,” claims a Kommersant source in one of the companies. But the profitability of such sales is low, says MTS-Ukraine Marketing Director Svyatoslav Gorban. Therefore, the company does not consider this area as a separate business, but rather as a way to retain and attract subscribers. “When switching to a smartphone, the consumption of data services by a subscriber increases at least twice,” explains Alexey Kireev, explaining the importance of the new direction.

Operators' ambitions are hampered by the lack of their own retail outlets. Kyivstar is going to start selling new phones only in branded stores (about 400 today), but expects to come to an agreement with retail chains as well. “But operators sell such devices quite cheaply, leaving no margin for the retailer,” Viktor Sholoshenko, director of marketing for the Citrus Discount retail chain, explains the low retail interest. “In addition, large vendors Samsung and LG have begun to operate in this price segment.”

Igor Burdyga

"Kyivstar" came with its