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E-Readiness
Assessment of
Ukraine
Report prepared within the
Government of Ukraine/UNDP Programme
“Innovation Springboard:
Leveraging ICT for Ukraine’s Prosperity”
with the support of the “State Committee on
Communications and Informatisation”
2002
TABLE OF CONTENTS
A BRIEF INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . .5
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Update Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Ukraine, a Short History . . . . . . . . . . . . . . . . . . . . . . . . . . .7
About the Innovation Springboard . . . . . . . . . . . . . . . . . . .8
SECTION 1: NETWORK ACCESS . . . . . . . . . . . . . . . . .9
Information Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . .10
Fixed Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Other Operators . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Access Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Affordability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Fixed Wireless Lines . . . . . . . . . . . . . . . . . . . . . . . . . .12
Cellular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Other Wireless Services . . . . . . . . . . . . . . . . . . . . . . .12
Satellite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Access and Affordability . . . . . . . . . . . . . . . . . . . . . . .14
Internet Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Internet Access Service Providers . . . . . . . . . . . . . . . . . .14
Sidebar: Some key providers . . . . . . . . . . . . . . . . . . . .15
ISP Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Internet Exchanges Between Providers . . . . . . . . . . .16
Policies and Regulations for ISP Interconnection . . . .16
TLD Registry, ICANN, IP Assignment Schemes . . . . . .16
Domain Registration Prices Under the .UA Zone . . . .16
Internet Affordability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Rural and Other Access Support . . . . . . . . . . . . . . . .18
History of Internet . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Internet Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
IP Telephony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Network Speed and Quality . . . . . . . . . . . . . . . . . . . . . . .20
Fixed Line Reliability . . . . . . . . . . . . . . . . . . . . . . . . .20
Wireless Voice Quality . . . . . . . . . . . . . . . . . . . . . . . .20
Universal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Hardware and Software . . . . . . . . . . . . . . . . . . . . . . . . . .21
Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Market Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Hardware Manufacturing . . . . . . . . . . . . . . . . . . . . .21
Software Development . . . . . . . . . . . . . . . . . . . . . . . . .22
Service and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Access to IT support training . . . . . . . . . . . . . . . . . . . . .22
Expos and Conventions . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 2: NETWORKED LEARNING . . . . . . . . . . . .23
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
ICT Access for Schools . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Computers in Public Schools . . . . . . . . . . . . . . . . . . .24
School Access and Computerization Programme . . . .25
Computers in Post-Secondary Institutions . . . . . . . . .25
Libraries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Enhancing Education With ICT . . . . . . . . . . . . . . . . . . . . .26
Software in Primary and Secondary Schools . . . . . . .26
Post-Secondary Network . . . . . . . . . . . . . . . . . . . . . .26
History of Distance Learning in Ukraine . . . . . . . . . . .27
Other Education Initiatives . . . . . . . . . . . . . . . . . . . .28
Developing The ICT Workforce . . . . . . . . . . . . . . . . . . . . .28
SECTION 3: NETWORKED SOCIETY . . . . . . . . . . . . . .29
UNDP ICT Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
2
People and Organizations On-line . . . . . . . . . . . . . . . . . . .30
ICT Awareness and Penetration . . . . . . . . . . . . . . . . .30
Digital Divide by Gender . . . . . . . . . . . . . . . . . . . . . .30
Digital Divide by Age . . . . . . . . . . . . . . . . . . . . . . . .30
ICT Awareness and Penetration by Occupation . . . . .30
Organizations On-line . . . . . . . . . . . . . . . . . . . . . . . .30
Locally Relevant Content . . . . . . . . . . . . . . . . . . . . . . . . . .31
Portals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Financial Websites . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Shopping and Food On-line . . . . . . . . . . . . . . . . . . .31
Culture and Entertainment On-line . . . . . . . . . . . . . .32
Job Search On-line . . . . . . . . . . . . . . . . . . . . . . . . . .32
Politics On-line . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Government Sites . . . . . . . . . . . . . . . . . . . . . . . . . . .32
NGOs On-line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
On-line Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Education Networks . . . . . . . . . . . . . . . . . . . . . . . . .33
ICT in Everyday Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Internet Penetration and Usage . . . . . . . . . . . . . . . . .34
ICT in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 4: NETWORKED ECONOMY . . . . . . . . . . . .35
A Note on Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
ICT Employment Opportunities . . . . . . . . . . . . . . . . . . . . .36
Labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Workforce at a Glance . . . . . . . . . . . . . . . . . . . . . . . .36
Unemployment in the ICT Sector . . . . . . . . . . . . . . .36
Areas of Specialization Among Programmers . . . . . . .36
ICT Market and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Sidebar: A software success story . . . . . . . . . . . . . . . . .37
Integration With the EU and WTO Accession . . . . . . .37
Chambers of Commerce On-line . . . . . . . . . . . . . . . .38
Software Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Piracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Service Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Computer Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Electronic Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Sidebar: ISPs wait for their first million . . . . . . . . . . . . .40
B2C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
International Card Payment Systems . . . . . . . . . . . . .41
B2B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Physical Support Infrastructure . . . . . . . . . . . . . . . . . . .41
Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Customs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
IT Parks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Start-up Support . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Sidebar: The Ysea Techno-park . . . . . . . . . . . . . . . . . .42
Venture Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Equity Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Tax Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Financial Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . .42
Electronic Inter-Bank Payment System . . . . . . . . . . . .42
Sidebar: Internet incubators . . . . . . . . . . . . . . . . . . . .43
Sidebar: A history of EIPS . . . . . . . . . . . . . . . . . . . . . .43
Online Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
TABLE OF CONTENTS
E-Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Sidebar: e-Government milestones . . . . . . . . . . . . . . . .45
SECTION 5: NETWORK POLICY . . . . . . . . . . . . . . . . .47
National IS Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Legal and Regulatory Support . . . . . . . . . . . . . . . . . . . .48
Standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
National Information Resource System . . . . . . . . . . .48
Financing the NISP . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Policies and Coordination . . . . . . . . . . . . . . . . . . . . .49
Coordinating Councils . . . . . . . . . . . . . . . . . . . . . . . .49
Budget Allocations . . . . . . . . . . . . . . . . . . . . . . . . . .49
Telecommunications Regulation . . . . . . . . . . . . . . . . . . . .49
A Brief History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Regulating Bodies . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Privatizing UkrTelecom . . . . . . . . . . . . . . . . . . . . . . . . . .51
Foreign Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Sidebar: A warning from the US Dept. of State . . . . . . .51
Fixed Telephony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Universal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Tariff Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Payphones and Cardphones . . . . . . . . . . . . . . . . . . .52
Quality of Service . . . . . . . . . . . . . . . . . . . . . . . . . . .52
IP Telephony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Wireless Telephony . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Wireless and Fixed Networks Interconnection . . . . . .53
Local Loop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Satellite Internet Networks . . . . . . . . . . . . . . . . . . . . . . .53
Internet Regulations and Licensing . . . . . . . . . . . . . . . .54
e-Commerce Law . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Other Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Privacy and Data Protection . . . . . . . . . . . . . . . . . . .54
Cryptography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Network Compatibility . . . . . . . . . . . . . . . . . . . . . . .54
Copyright and Intellectual Property . . . . . . . . . . . . . .54
Certification Authority . . . . . . . . . . . . . . . . . . . . . . . .55
ICT Trade Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Foreign Economic Strategy . . . . . . . . . . . . . . . . . . . . . .55
Investment Climate . . . . . . . . . . . . . . . . . . . . . . . . . .55
Information Support to Foreign Economic Policy . . .55
APPENDIX
APPENDIX
APPENDIX
APPENDIX
APPENDIX
A: Additional tables . . . . . . . . . . . . . . . . . . .57
B: Basic indicators for Ukraine . . . . . . . . . . .62
C: Telecommunications data . . . . . . . . . . . .65
D: UNDP survey . . . . . . . . . . . . . . . . . . . .67
E: Harvard e-development readiness guide . .72
Tables
Local phone calls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Long-distance telephony . . . . . . . . . . . . . . . . . . . . . . . . . .11
Other wireless services . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Growth in mobile use . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Television penetration . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Sound radio-broadcasting penetration . . . . . . . . . . . . . . .14
Satellite broadcasting in 2000 . . . . . . . . . . . . . . . . . . . . . .14
Major ISPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Unlimited access service package . . . . . . . . . . . . . . . . . . .14
Wireless broadcasting . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Number of ISPs in Ukraine . . . . . . . . . . . . . . . . . . . . . . . .17
Some communication “backbone” lines . . . . . . . . . . . . . .17
Internet users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Users of Ukrainian language Internet . . . . . . . . . . . . . . . .17
Comparison of dial-up pricing schemes . . . . . . . . . . . . . .19
Comparison of leased line pricing schemes . . . . . . . . . . . .19
Development of satellite channels . . . . . . . . . . . . . . . . . . .19
ISPs with direct satellite international access . . . . . . . . . . .19
Bandwidth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Urban and rural telephony . . . . . . . . . . . . . . . . . . . . . . . .20
Urban telephony, payphone checked . . . . . . . . . . . . . . . .20
Cost of computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
PC units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Manufacturers of hardware . . . . . . . . . . . . . . . . . . . . . . . .21
Computers in school computer labs . . . . . . . . . . . . . . . . .24
School access to computers . . . . . . . . . . . . . . . . . . . . . . .25
Student access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Teacher access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Post-secondary access . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Specialties related to ICT . . . . . . . . . . . . . . . . . . . . . . . . . .26
Distance learning departments and courses . . . . . . . . . . .26
Sample of city website profile: L’viv . . . . . . . . . . . . . . . . .31
Reasons for not buying on-line . . . . . . . . . . . . . . . . . . . .32
Civic organizations on-line . . . . . . . . . . . . . . . . . . . . . . . .33
Education websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Internet access among users . . . . . . . . . . . . . . . . . . . . . . .34
What is your level of computer literacy? . . . . . . . . . . . . . .34
Do you use the Internet? . . . . . . . . . . . . . . . . . . . . . . . . .34
Sample IT compensation in Kyiv . . . . . . . . . . . . . . . . . . . .36
Unemployment in the ICT Sector . . . . . . . . . . . . . . . . . . .36
Regional piracy rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Global piracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Volumes of software service exports . . . . . . . . . . . . . . . . .38
IT companies by specialization . . . . . . . . . . . . . . . . . . . . .38
Computer services transfer . . . . . . . . . . . . . . . . . . . . . . . .39
Largest trading partners in computer services . . . . . . . . . .39
ATM dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Cards issued in Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Central and regional computerization . . . . . . . . . . . . . . . .44
Planned vs budgeted NISP funding . . . . . . . . . . . . . . . . . .48
Setting tariffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Service charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Charts
Unsatisfied demand for fixed telephony . . . . . . . . . . . . . .10
Telephone lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Telephone density . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Type of technology used . . . . . . . . . . . . . . . . . . . . . . . . . .12
Voice traffic shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Total mobile subscribers . . . . . . . . . . . . . . . . . . . . . . . . . .12
Zone count . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Host count . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Share of weekly Internet users by city . . . . . . . . . . . . . . . .18
Line readiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Analog vs digital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Types of public phones . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Cardphone distribution . . . . . . . . . . . . . . . . . . . . . . . . . . .21
ICT awareness and penetration . . . . . . . . . . . . . . . . . . . . .30
Internet awareness by age . . . . . . . . . . . . . . . . . . . . . . . .30
Hot Internet topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Volume of ICT work by type . . . . . . . . . . . . . . . . . . . . . . .37
Dynamics of computer services transfer . . . . . . . . . . . . . .38
Leaders in cards issued . . . . . . . . . . . . . . . . . . . . . . . . . . .40
UkrTelecom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
3
Abbreviations
Certain abbreviations are commonly used in Ukraine for government and other agencies. They are applied in this document for simplicity.
abbreviation
full form
English equivalent
DerzhKomZviazok
DerzhKomStat
MinEcon
Derzhavniy komitet zv’iazku ta informatyzatsiyi
Derzhavniy komitet statystyky
Ministerstvo ekonomyky ta
Yevropeyskoyi integratsiyi
NAS
Natsionalna Akademia Nauk Ukrayiny
NISP
Natsionalna programa informatyzatsiyi
Shevchenko University Kyivskiy Nationalniy Universytet Imeni T. Shevchenka
“State Committee for Communication and Informatisation”
State Statistics Committee
Ministry of Economy and European Integration
National Academy of Sciences of Ukraine
National Information Systems Programme
Kyiv National Taras Shevchenko University
Authors and contributors
E-readiness Team
Team
Lysytskyi, Viktor, PhD
Ivchenko, Iryna, PhD
Soloshenko, Anatoliy
Oriekhov, Oleksandr, PhD
Azarov, Serhiy, Dr.
Bohuslavska, Tamara
Former Secretary of the Cabinet, former Director, State IT and Computer Networks, The
“State Committee on Communication and Informatisation”
Department Head, Deputy Director of Data Security, IT Division, NBU
Director, Sales and Customer Services, Ukrtelecom
Department Head, IT Development, DerzhKomZviazok
Director, State and International Relations, LuckyNet
Division Head, Information and Analysis, Ministry of Economy and European Integration
International Expert
Accascina, Gabriel
IT Specialist, UNDP
Advisors and Contributors
Vyshlinskiy, Hlib
Zabolotskiy, Ihor
Pekar, Valeriy
Kolodiuk, Andriy
Mykhailov, Viktor
Shkarlat, Maria
Spiridonov, Victor
Demchenko, Yuriy
Hrytsenko, Volodymyr, Prof.
Lysenko, Ihor
Deputy Director, International Centre for Policy Studies
IT Department Head, Ministry of Economy and European Integration
President, Euroindex
President, AVentures
Deputy Director, Ukrainian Institute of Communications Research
Legal Expert, GIPI
Executive Director, Ukrainian Association of Software Developers
Project Development Officer, TERENA, the Trans-European Research and Education
Networking Association
Director, International Center for IT, National Academy of Sciences of Ukraine
Director, ITEC-CheZaRa
UNDP Team
Volkov, Serhiy
Kalinin, Volodymyr, PhD
Shulha, Tetiana, PhD
Shyian, Roman, PhD
Izotov, Volodymyr
Senior Programme Manager
National Manager, Innovations Springboard Programme
Public Communications Assistant, Innovations Springboard Programme
Senior National Counsel, Education for Reform Project
Consultant and Translator
Production Team:
Matlid Publications, Inc.
Wolanskyj, L. A.
Savchuk, L.
Borodayev, D.
Editor-in-Chief and coordinator
Ukrainian language editor
Design and typesetting
No part of this publication may be reproduced without prior permission of UNDP Ukraine. Opinions expressed in this publication are those of the
authors and do not necessarily coincide with those of the UNDP.
Copyright ©2002 UNDP Ukraine
4
A BRIEF
INTRODUCTION
Much has changed in Ukraine since
its independence from Soviet rule and
its transition to a market economy.
The last twelve years have seen
dramatic shifts in many socioeconomic areas and in Ukraine’s
relations with the global community.
Telecommunications and
information technology, including
the Internet, are part of this shift
and have boomed substantially.
In this area, it is important to
consider where Ukraine is coming
from and what it aims to achieve.
A BRIEF INTRODUCTION
M
uch has changed in Ukraine since its independence
from Soviet rule and its transition to a market economy. The last twelve years have seen dramatic shifts in
many socio-economic areas and in Ukraine’s relations
with the global community.
Telecommunications and information technology,
including the Internet, are part of this shift and have
boomed substantially. In this area, it is important to consider where Ukraine is coming from and what it aims to
achieve.
The transition from a Soviet republic to possible membership in the European Union is, without doubt, a difficult one and it involves the modernization not only of systems and networks, but also of attitudes, business methods
and governance, to build a robust and stable nation. For
these reasons Ukraine is seeking to reform a number of sectors. Information, given its crosscutting nature, is central
to this process.
The E-Readiness Assessment presented here draws an
interesting picture. On the one hand, there’s no doubt,
throughout the entire report, that Ukraine is moving
forward quickly, despite the dramatic changes and
hardship it has experienced. Renewed political commitment sees changes in communications as a critical precondition for reform. On the other hand, Ukraine suffers
from the baggage, inherited from the previous regime, of
inadequate frameworks, augmented by a lack of the
solid long-term strategies needed to propel it into the
21st century on a par with developed countries.
To this extent, the data collected by this report highlights a number of issues, from infrastructure to education, from policies to business transparency, which create
a less-than-ideal environment for growth and development. Another important consideration is that while
the ERA deals only with the adoption of information and
communication technology in order to create a knowledge and information-based society, it touches on a number of other areas that are per se in need of reform. Like a
ripple effect, each area affects the other, and the resulting
conclusion is that Ukraine has much to do –and quickly–
to upgrade its standing in all sectors crucial to its development, not just information and communication technology.
A related Policy Directions manual describes the findings of five components that are examined by the ERA:
network access, learning, society, economy, and policy. At
the end of each section, basic recommendations are
given on the basis of the findings, which should be
expanded in a budgeted plan of action. In this endeavour,
it is recommended that Ukraine consider establishing a
National Information Technology Council, a crosssectoral advisory group that would bring together representatives from government, the private sector, academia
and civil society to advise, plan and follow the development of the Information and Communication Technology
environment.
Background
T
he United Nations Development Programme in
Ukraine was asked to compile this assessment by the
Government of Ukraine. The survey was carried out under
the auspices of the Innovation Springboard Project, which
uses Information and Communication Technology as a
tool for social and economic development.
This E-Readiness Assessment of Ukraine examines the
country’s capacity to participate in the network economy.
It describes several sectors related to information technology, Internet and telecoms, and illustrates the penetration
of these technologies by looking at the infrastructure, education, society, economy and policy environments. Hence,
the assessment offers a good picture of Ukraine’s present
situation, its strengths and problems. The E-Readiness
Assessment should be of interest to policy-makers, the private sector and investors, both domestic and international, who may want an objective view of this sector.
Methodology
T
his E-Readiness Assessment loosely follows Harvard’s
“Readiness for the Networked World Guide.” The
Guide offers a rating tool which scores – from one to four
– 21 indicators in each of the five areas examined: Access,
Learning, Society, Economy and Policies. The rating
methodology is described in detail in the appendix, in the
Harvard e-development readiness guide.
A team of experts and advisors was assembled in June
2002 in Kyiv to carry out the assessment. This team
worked in two languages, Ukrainian and English, with the
help of a translator. The assessment is also offered in both
languages.
The team met for an initial week and then separated to
gather data and statistics. A survey was commissioned to
acquire data pertinent to rural areas and oblasts throughout the country. The team met again on the third week of
June to examine the data and any gaps that needed to be
covered. During this initial three-week period, the team
held a number of meetings with key stakeholders and the
advisory group was expanded to include several private
sector companies, private consulting firms and policy
study centres. The document was compiled and a first
draft prepared in the last part of the month. The document was then sent back to the team for review and
advice, finalized in July 2002 and officially submitted to
the Ukrainian government.
Sources
A large number of statistics and data was gathered for this
study. The team made every effort to directly quote
sources of data in every instance and referred to available
publications as well. The Hi-Tech Navigator1 was of invaluable use to the compilation of this assessment.
The Hi-Tech Navigator is published by the Law Business Research Ltd.
Telecoms Copyright 2001 the Konnov & Sozanovsky law firm.
1
6
A BRIEF INTRODUCTION
Update Note
This research represents one of the first attempts to pull
together a comprehensive picture of the situation in
Information and Communication Technologies or ICT in
Ukraine. In order to make this edition the most comprehensive possible, the authors tried to amass and present
the latest available information. But even during the twomonth period of the study and the follow-through and
production phase, some important changes have taken
place in the communications field in Ukraine:
•
The “State Committee on Communication and
Informatisation” or DerzhKomZviazok has raised
tariffs for both local and long-distance services.
•
Two of the oldest Ukrainian mobile providers, UMC
and Golden Telecom, announced Nov. 5, 2002 that
they had sold major stakes to outside investors. The
UMC sale resulted in a reduction of Ukrtelecom’s
stake in that company.
•
For the first time in Ukraine, several bills on telecommunication have been drafted and are under
consideration in committees of the Verkhovna
Rada.
•
On Nov. 6, 2002, Ukraine became the first CIS
country connected to GEANT, the all-Europe
research and education network that is a joint network of the EU countries and EU candidate countries.
•
The Association of Participants in the Internet
Market of Ukraine, the Ukrainian National Internet
Association, the Telas Alliance of Communications
Operators, and the State Center for Information
Resources of Ukraine created a new corporation
called Ukrainian Network Informational Center or
UANIC, to administer domain .ua.
elderly.
Rural dwellers comprise 33% or 15,878,000 of the population. There are seven western oblasts where the share of
rural population is higher than urban. By the same toke,
the eastern regions are more urbanized, with the percentage of the population living in cities reaching 90% in
Donetsk, 86% in Luhansk, and 83 % in Dnipropetrovsk.
Altogether, Ukraine has 454 cities with a population
exceeding 50,000 and five cities with over one million residents: Kyiv, Donetsk, Kharkiv, Dnipropetrovsk, and
Odesa.
Gender distribution in Ukraine is 54% women to 46%
men.
Another characteristic feature of Ukraine’s demographic structure is the age distribution. The median age of
Ukrainians has risen since independence from 35 to 37
years. About 15% of Ukrainians are now over 65, compared with a world average of 7%, and the dependency
ratio is 1.0.
Economy
Ukraine, a Short History
U
kraine started its new life as an independent state in
1991. Its “in-between” position is its geopolitical
strong point – and weakness at the same time. The nation
is both the bridge and the buffer zone between Europe and
Russia. The flat lands dominating its geography are counterbalanced by the Carpathian Mountains in the West and
the Crimean range in the South. Ukraine has common
borders with Russia and Belarus to the north and the east,
with Poland, Hungary and Slovakia to the west, and with
Romania and Moldova to the south.
Demography
The 2001 census revealed that Ukraine’s population had
dropped by 3,000,000, to 48,600,000, since the previous
count, taken during the Soviet Union’s 1989 census.
This is due to a low birth-rate and a high percentage of
After eight years of economic decline caused by the loss of
traditional markets, increased energy prices, and slow
structural reform, Ukraine’s macroeconomic indicators
started to increase in the period 1999-2002. An additional
factor spurring policy change was the 1998 economic crisis. This forced the government to react, in particular to
bring under control the budget deficit and introduce a
competitive exchange rate. A crisis almost a decade long
has left Ukraine with outdated and worn out infrastructure
and substantial losses in human capital.
Human Development
Among its neighbours, Ukraine experienced the second
highest drop in human development indicators. Per capita GDP and life expectancy, which influence the overall
Human Development Index, have dropped. The economic decline was associated with a very substantial decline in
male life expectancy, which plunged to 66.9 years in 1995.
It has risen somewhat again, reaching 67.9 in 2000. The
high levels of school enrolment, at 73.7-77.3%, and an
adult literacy rate of 98.5-98.8 % developed during the
soviet era, prevented Ukraine’s HDI from dropping at the
same rate as per capita GDP. HDI varies through the
regions of Ukraine, more or less corresponding to their
level of GDP per capita.
Politics and Governance
In the legislative elections which took place in March,
only six parties out of a field of 34 passed the 4% threshold and formed the new balance of power. The executive
branch of the government, consisting of the President’s
Administration and the Cabinet of Ministers, exercises
considerable control over the general decision-making
process.
The government system has experienced significant
changes within the last few years. The number of ministries and state committees has been substantially reduced
and the bureaucratic workflow simplified.
7
A BRIEF INTRODUCTION
About the Innovation Springboard
L
aunched on Sept. 28, 2001, this new programme on the
UNDP agenda is intended to strengthen the process of
balanced national development and poverty alleviation
though appropriate and innovative uses of information
and communications technologies.
Innovation Springboard is being developed and implemented with a number of primary partners: The “State
8
Committee on Communication and Informatisation” or
DerzhKomZviazok, the National Academy of Sciences,
Kyiv National Taras Shevchenko University, Ukrtelecom,
and the International Renaissance Foundation.
UNDP looks to work with all relevant partners, both
public and private, in realizing the full socio-economic
and governance benefits of ICT-enabled development in
Ukraine.
SECTION 1:
NETWORK
ACCESS
As is common in many countries,
Ukraine’s information infrastructure
is more developed in urban areas
than in rural locations. The majority
of the urban population has access
to both fixed landline and wireless
telephones. Teledensity in urban
areas peaks in Kyiv at 45%, while
in rural areas it is estimated at only
5%. Nationwide, the average is
20.7% according to local estimates,
and 22.7% according to ITU.
SECTION 1:
NETWORK ACCESS
Information Infrastructure
Access Strategies
A
The strategy for developing services to provide access to
telecommunications is described in the Comprehensive
Program to Create a Uniform National System in Ukraine. The
main aspects related to infrastructure development include:
s is common in many countries, Ukraine’s information infrastructure is more developed in urban areas
than in rural locations. The majority of the urban population has access to both fixed landline and wireless telephones. Teledensity in urban areas peaks in Kyiv at 45%,
while in rural areas it is estimated at only 5%. Nationwide,
the average is 20.7% according to local estimates and
22.7% according to ITU.
The total number of telephone lines at the end of 2001
was about eleven million. Although 279,000 new telephone numbers were introduced in 2000, the density still
does not meet European minimums. The ITU teledensity
ranking for Ukraine even fell from 1990 to 2000 – from
66th to 87th position – perhaps reflecting a lack of sectoral
readjustment and fairly severe difficulties in making the
transition from a soviet, centrally-administered economy
to a market-driven one. Fixed-base telephony is regulated
and 80% of subscribers use the services of Ukrtelecom for
domestic and long distance calls. The local loop is subject
almost entirely to the monopoly of Ukrtelecom, while
Utel is the provider of international services.
The largely unregulated Internet services are well
developed, with over 300 ISPs and some 500,000 active
users. A range of access technologies is available, from fast
dial-up to leased lines and xDSL. Even in small towns,
speeds of 33K bps are relatively reliable.
The mobile market has experienced, as in other countries, strong growth rates of just under 200% a year, with
2.5 million users and a penetration rate of almost 5%.
UMC, until recently controlled by Ukrtelecom, is the top
provider, with KyivStar a close second.
1. converging the general-use telephone network
with a “backbone” packaged network;
2. further developing a basic “backbone” high-speed
multi-functional carrier network on the basis of
asynchronous transfers;
3. providing quality and broadband access to Internet
sites and the organization of activities to avoid
overloading general use neworks with Internet traffic;
4. further developing service provision for corporate
clients on the basis of Frame Relay technology.
Affordability
The cost of local calls within one region is relatively low.
However, long-distance calls – international calls in particular – are rather expensive, compared to income levels.
The cost of calls from different categories (see tables p. 12)
has been taken from Ukrtelecom’s official website:
www.stc.gov.ua/_connect/commun3.html
Unsatisfied demand for fixed telephony
Fixed Lines
T
he main operator is Ukrtelecom, which consolidated into
a state-owned enterprise the regional telecommunication
companies left by the Soviets in 1991. This analogue network became rapidly outdated and it has since been partly
replaced with modern digital equipment. Modernization has
been primarily in major urban centres.
Ukrtelecom has 45 long-distance exchanges, of which
27 are digital, with three international gateways. Ukrtelecom connects to several international networks’ fibreoptic system. Utel, of which Ukrtelecom owns 100%, provides international communications. The complete profiles for both companies, from the ITU public website, are
reported in the Appendix C page 65.
Source: Statistical yearbook on the activities of the Communications
Administration 2000
Telephone lines
Other operators
•
Golden Telecom Business Solutions
•
Kancom
•
Optima
•
Farlep
•
Crymtel
Their total market share is nearly 20%, most of it GTBS.
Source: Statistical yearbook on the activities of the Communications
Administration 2000
10
SECTION 1:
NETWORK ACCESS
Local phone calls
type of service
regular monthly usage
phone set linked to separate line
with phone number reservation.*
each minute over first 100
fee, USD
for legal entities
for individuals
state-owned
other
w/o
with
w/o
with
w/o
with
per-minute
per-minute per-minute per-minute per-minute per-minute
tariff
tariff
tariff
tariff
tariff
tariff
0.77
0.79
0.96
0.96
1.15
1.17
1.50 1.13 2.44 1.69 1.50 2.44 14.10
2.26
14.10
11.84
14.10
14.10
NA
0.0032
NA
0.0049
NA
0.0032
*Fee covers 100 free minutes of local calls for all categories of customers. In rural areas, a reduction factor of 0.8 applies.
Long-distance telephony
time
rate per minute (UAH, VAT not included)
for individuals
for all customers
on Sundays and holidays
24 hours
within oblast
0.05
0.05
0.02
0.02
0.02
0.02
within Ukraine
0.09
0.09
0.03
0.05
0.05
0.03
international calls
rate per minute (USD, VAT not included)
normal tariff
21:00 to 08:00
government bodies
Monday-Saturday
Sundays and holidays
24 hours
0.43
0.35
0.21
0.67
0.55
0.36
1.10
0.85
0.53
1.20
1.00
0.71
1.70
1.40
0.90
2.00
1.60
1.06
for legal entities
08:00 to 21:00
21:00 to 08:00
08:00 to 21:00
21:00 to 08:00
calling zones
Eastern Europe
Centra| / Northern Europe
Western Europe
Central Asia / Middle East
North America
Far East
Africa / Central and
South America
Australia/Oceania
for legal entities
666.67
2.00
1.60
2.00
1.60
rate for telephone installation (additional line)
for individuals
166.67
1.24
1.42
Telephone lines and growth rate… see Appendix A p. 58
General infrastructure data from ITU… see Appendix A p. 58
11
SECTION 1:
NETWORK ACCESS
Telephone density, %
Type of technology used, ’000
Source: DerzhKomZviazok
Source: DerzhKomZviazok
Voice traffic shares
Wireless
Fixed Wireless Lines
W
here there is no fixed local loop infrastructure, some
operators have obtained licenses for wireless local
loops such as WLL TCMA and CDMA. These operators
provide much needed point-to-multipoint connectivity
and they help in reducing the waiting list for subscriber
services. These companies include Telesystem and DigiTel,
which were licensed in 1997 by Derzhkomzviazok. The
two interact with the two major providers to offer a full
range of communication services. Regionally, the government has also licensed two additional CDMA operators,
Velton and ITC.
Source: DerzhKomZviazok
Cellular
Cellular communications development in Ukraine began
in 1992, with the launch of the country’s first operator,
Ukrainian Mobile Communications. Characteristically,
first- and second-generation local cellular network development has involved the completion of national networks
by separate operators, and by a gradual integration with
each other and with other mobile communications networks, in particular, satellite mobile communications. The
market experienced a boom in 1999, which coincided
with highly unsatisfied demand for fixed-base telephony.
In 1999-2000, the mobile market grew 180-190%.
Total mobile subscribers, January 2002, ’000
Kyiv Star
Other Wireless Services
Mobile operators offer a wide range of additional services
to their subscribers. The most popular among them include: SMS, WAP, mobile office, voice mail, roaming with
the Globalstar satellite system, data transmission services,
Internet access, last-mile, reference service on SMS use,
and more.
operator brand
UMC
KyivStar GSM
Golden Telecom
Wellcom
Source: Official websites
12
additional services
SMS, WAP, voice mail, mobile office,
paging
voice mail, mobile office
data transmission
SMS
Growth in mobile use
1998
1999
2000
2001 e
2002 f
number of subscribers % growth % penetration
100,000
100
0.20
280,000
180
0.56
814,500
190
1.65
2,223,000
173
4.54
3,951,000
78
8.06
Source: AVenture
SECTION 1:
NETWORK ACCESS
Operators
Operator
License
type
URL
Services
Kyivstar GSM
1994
ZAT
official site:
www.kyivstar.net
prepaid service:
www.kyivstar.net/prepaid
subscriber portal:
www.starport.com.ua
GSM-900
UMC
Ukrainian Mobile
Communications
1992
SP
official site:
www.umc.com.ua
prepaid service:
www.sim-sim.com.ua
WAP-portal:
www.prostir.com
subscriber news:
dialog.umc.com.ua
NMT-450
GSM-900
DCS (GSM-1800)
46%
1045
(GSM-900-900
NMT-450-250)
79
Golden Telecom
Ukraine
1996
TOV, official site:
founded gsm.goldentele.com
as SP prepaid service:
uni.goldentele.com
SMS info:
www.infomania.com.ua
WAP portal:
www.infomania.com.ua
GSM-1800
GSM-900
2%
70
40
Wellcom
Ukrainian
Radiosystems
1995
AT as official site:
Wellcom www.welcome2well.com
Ltd.
GSM-900
1%
33.5
36
DCC
Digital
Communication
of Ukraine
1995
official site:
www.dcc-ua.com
D-AMPS 1900
D-AMPS 800
2%
42
58
n/a
DCS (GSM-1800)
<1%
30
Astelit
n/a
TOV
Market Technology
share
49%
1100
Roaming
69
Note: AT = joint stock company; ZAT = closed JSC; SP = joint venture; TOV = limited company
Wireless affordability… see Appendix A p. 59
13
SECTION 1:
NETWORK ACCESS
Television penetration %
Satellite
T
oday a number of companies provide Internet access
through satellite technologies: Ukrsat, Infocom-SK,
Spacegate, Adamant, LuckyNet, Ukrnet, Itelsat. Excluding
Infocom-SK, these are all private operators. UkrChastotNahlad, the Ukrainian frequencies supervisory centre,
reports that 86 operators have licenses to provide satellite
communications services in Ukraine. While they are not
all operational, the majority use satellite channels to distribute TV and radio programs.
Access and Affordability
According to experts, the total carrying capacity of satellite
channels to the Internet is about 150 Mbit/s. Satellite
operators lease the capacities of satellite segments from
foreign companies such as Intelsat, Eutelsat, Intersputnik,
Sweden’s NSAB, Israel’s Space Com, Norway’s Thor and
others. As of mid-2002, 65 VSAT stations operate within
the active internal satellite communications network in
Ukraine and are located in large cities. As an example of
rates for unlimited Internet access via satellite, the packages offered by one company are used (see table below).
Internet Availability
I
nternet began in Ukraine began in 1988 and commercial
service began in 1991. After 1997, the ISP market became
unlicensed and expanded from 100 in 1997 to more than
300 today. An estimated 20% of all ISPs operate in the Kyiv
area alone, but they have more than 70% of the Internet
market in Ukraine. The user pool was estimated at 1.5 million in 2001, a penetration rate of less than 3% –well below
the 10% or more commonly found in developing countries.
Internet Access Service Providers
T
o date, the main ASP in Ukraine is Ukrtelecom, the
only company that provides land-based communications channels for first-level networks. In recent years,
programs
1999
2000
1+
94.4
94.2
2+
89.7
89.4
3+
77.4
77.6
4+
48.2
48.8
commercial
80.7
82.1
Sound radio-broadcasting penetration %
programs
1999
2000
1+
98.5
95.3
2+
89.9
85.0
3+
72.6
71.5
commercial
71.4
73.5
Satellite broadcasting in 2000, units
transmitting satellite stations
total
including TV
broadcasting
4
2
satellite receivers
total
including TV
broadcasting
0
0
Source: Statistical yearbook on the activities of the Communications
Administrations 2000
some commercial ISPs and telecommunications companies have created their own external telecom channels,
including channels based on satellite and radio-relay technologies. Thanks to this, they can play an ASP role for
smaller ISPs and some telecommunications operators.
The biggest commercial ASP that provides access to the
Internet for most Ukrainian users is LuckyNet. Other large
ASPs include Golden Telecom, Utel, Digital Generation,
InfoCom and Adamant. Large industrial centres in
Ukraine also have a number of companies that perform an
ASP role for smaller, regional ASP infrastructures.
Major ISPs
Ukrtelecom
Relcom/IP Telecom
Lucky Net
Svit Online
UkrNet
El-Visti
Adamant
outgoing Mbps modems est. users
82
3,000
55,000
30
1,400
30,000
25
450
10,000
21
690
12,000
18
1,100
12,000
13
340
3,500
16
250
2,500
Source: Derzhkomzviazok
Unlimited access service package
No limitations of speed, up to day volume limit. Once limit is reached, priority is lowered and speed is not guaranteed.
Service conditions: 100% pre-payment.Cost does not include payment for user channel by client day limit by traffic
then limit by speed
monthly fee in USD
20 Mb
50
40 Mb
100
80 Mb
180
160 Mb
340
Source: www.spacegate.Kyiv.ua; Ukrsat tariffs at www.ukrsat.com/rus/index.html Ukrtelecom does not operate in the market of satellite access to Internet.
Wireless broadcasting
1999
2000
radio-broadcasting points (main), ’000
total
urban
9,559.3
6,843.5
8,719.7
6,316.7
Source: Statistical yearbook on the activities of the Communications Administration 2000
14
rural
2,715.8
2,403.0
radio-broadcasting points per
100 inhabitants
9.2
17.7
SECTION 1:
NETWORK ACCESS
Some key providers
Infocom
Offers an UkrPack X.25, UkrMail X.400, Frame Relay Network.
Available in all cities, with internal links in Ukraine to 20 local ISPs
Foreign connectivity is handled by a 2M satellite connection to TeleGlobe, Canada
Commercial ISP.
T
he Ukrainian national data transmission network called UkrPack (X.25, international code DNIC2550) works with
packet switching through INS equipment provided by Hughes Network Systems. This network is based on Frame
Relay technology. UkrPack consists of 114 nodes and provides access to the data transmission networks of more than
90 countries, including direct connections to DATEX-P, Global One, PolPAK, RoSprint, RosPak, BelPak, and more. The
UkrPack network provides direct connections to synchronous and asynchronous data terminals through dedicated
lines. It also has gates to more than 100 networks worldwide and uses a wide spectrum of network protocols, such as
TCP/IP, X.25, Frame Relay, SDLC, and so on. It offers data transfer rates of up to 2 Mb/s, and provides all services envisaged by X.400 protocols, including Internet access for all UkrPack clients.
UkrMail is a nationwide message-handling system based on the X.400 protocol. It uses the UkrPack network for transport and has gates to such networks as AT&T, MarkNet, MCI, Sprint, Atlas, TBX400, and Internet. Ukrtelecom, through
its Telecom Transit Center, which is connected to the UUNET Global Transit node in London, leases digital transit
channels to local Internet services providers in more than 20 regions of Ukraine.
Ukrtelecom
Runs IPs over its network, present all across Ukraine.
Fiber connections between major cities, at speeds from 64K to 10M.
Foreign connections: 32 M fiber-optical connection to C&W in NewYork, 34 M fiber-optical connection to Telecom Italia in
Palermo, 8 M fiber-optical connection to Metrocom in St. Peterburg, 4 M satellite connection to Tide in the Netherlands.
Commercial ISP.
Sovam Teleport
Present in 5 major cities, connection through leased lines, speed unknown.
Foreign connection: 2M link to St.Petersburg.
Commercial ISP.
LuckyNet
Present in 20 cities, connection through leased lines from Ukrtelecom.
Running at 64-128K. Also some digital lines from Ukrtelecom at 64-384K.
Foreign connections: 4M satellite link to Deutsche Telecom; 512 and 2M link to RusTeleCom in Russia.
Commercial ISP.
Global Ukraine
Connections to 23 cities, analog lines leased from Ukrtelecom.
Also hybrid satellite links with return parth through terrestial links.
Runs Frame Relay to Odesa (128k) and Donetsk (2M).
Foreign connections: 1M satellite to Digex and 2M satellite to UUNET.
Commercial ISP.
Relcom-Ukraine
Present in 9 cities, connection through leased lines from Ukrtelecom.
Speed up to 128k.
Foreign connection through Infocom.
Commercial ISP.
Many smaller ISPs use their own satellite connections.
15
SECTION 1:
ISP Infrastructure
T
he network capacity of external channels of Internet
providers in 2000 was 92.51M bps.
Internet Exchanges Between Providers
IX Ukrtelecom – a traffic exchange point for Ukrtelecom in
Kyiv, to which all state-owned companies and most leading Ukrainian ISPs are connected. Today, all Ukrtelecomserved Internet access hosts are present in all oblast or
provincial centres and in more than 100 rayon or county
centres. The total number of access hosts is 165.
UA-IX is a Ukrainian association with 60 members, 50 of
which are ISPs. UA-IX exchanges traffic between private
ISPs. Participants include Golden Telecom, Sinet, Lucky
Net, Global Ukraine, NBI, Sitel, IP Telecom, UarNET, NTC
FtiCom, Colocol, Farlep, UkrCom, Priocom, CIT Vostok,
WU Net, MCI, Cancom, Citynet, Trifle Co. Ltd., Datacom,
Viaduc Telecom, KyivStar GSM. Rates for participant speed
are:
• 100 Mbit/s for the first month of use: Hr 6,050 or
US $1,137, plus payment for the second and each
following month of use of UA-IX at a rate of Hr 550
or US $103.
•
1,000 Mbit/s is Hr 19,250 or US $3,618 and
Hr 2,750 or US $517 for the correponding services.
IP addresses of all Ukrainian networks accessed
through UA-IX are updated every 10 minutes at Network
Operation Centre at www.ua-ix.net.ua.
East-IX, a projected IP traffic exchange point in the east of
Ukraine, is located and supported with the resources of ISP
Alkar-Teleport.
Two IX in Kharkiv is one IX with 5 participants under the
supervision of itl.net.ua and a second IX with 9 participants under the supervision of KTTS.
DN-IX are traffic exchange points in Donetsk. The cost of
connection and subscription service for DN-IX Agreement
participants is US $200. See www.ix.dn.ua.
Policies and Regulations for ISP Interconnection
State policy concerning ISP activities focuses mainly on
security components. Since the adoption of a Presidential
Decree on the Oct. 31, 2001 report of the National Security
Council on improving the country’s information policy
and providing information security, new rules governing
licensing are in the preparation stage. As well, a bill on
telecommunications expects providers to procure and
install information surveillance equipment at their own
expense. A number of other drafts dealing with Internet
are in the state of preparation in the Verkhovna Rada: one
on electronic documents and their workflow, and another
amending some laws concerning intellectual property
issues in the Internet. See also Section 5.
Today, licensing the activities of providers is not
16
NETWORK ACCESS
required, as Art. 4 of the law on entrepreneurship does not
envisage this kind of business activity. The only exception
is when an ISP offers services using radio access.
Relations between ISPs also have no formal instruments, nor are there any specific articles of law regulating
relations between ISPs and clients. That is why general
norms regarding the providing of service under civil legislation are applied.
TLD Registry, ICANN, IP Assignment Schemes
The informal distribution of domain space in Uanet, “domain.UA,” started at the end of 1990. The .UA domain was
initially registered in December 1992 and was first delegated by an IANA committee to Telecommunication
Systems, an ISP company. This information is at IANA .UA
Root Zone Whois Information <www.iana.org/rootwhois/ua.htm>. In the years that followed, Telecommunication Systems unfortunately closed down operations.
In 1997, the Telecommunications Operators Association
was founded at www.telas.Kyiv.ua.
At the end of 2000, through the initiative of several
leading ISP companies, two ISP associations were created:
The Internet Association of Ukraine at www.inau.org and
the Association of Ukrainian Internet Market Participants
at www.auriu.org. The existing ISP associations and state
bodies signed a joint statement concerning the reorganisation of the .UA administration system and the registration of domain names. Information about the reorganization process can be found at ua-nic.net.
At the start of 2002, together with the non-government associations of Internet participants and the
DerzhKomZviazok – see www.stc.gov.ua –, a decision was
made to create the Ukrainian Network Information Centre
as a corporation and a Coordination Council to handle
registrations and develop registration rules and electronic
trust under the .UA domain. According to the acting registration institution, as of May 31, 2002, a total 313
domains are registered under the .UA domain, and 24,553
under COM.UA. A total of 96,385 domains are registered
under all second level domains (*.*.UA).
Domain Registration Prices Under the .UA Zone:
{name}.UA
$70-90
{name}.COM.UA
$8-12
{name}.domain.UA
$0-12
Over 60 registrars provide domain registration services
in Ukraine. Moreover, anybody can register a domain
name under the UA zone. Registration rules presuppose
mechanisms to protect trademarks.
UA domain administration
[email protected]
Postal address:
.UA Network Coordination Group
c/o domain-master at nic.net.ua
P.O.Box 89
Kyiv 01036
Ukraine
Hostmaster Ltd. (01036, Kyiv, P.O. Box 89, Hostmaster
Ltd.) is now carrying out all .UA administration tasks.
SECTION 1:
NETWORK ACCESS
Number of ISPs in Ukraine
Year
1999
2000
ISPs
100
160
Source
expert evaluation
expert evaluation
2001
2002
270
300
DerzhKomZviazok
SpyLOG
Notes
revenues for providing Internet service grew
by 76% in 2000, to UAH 151.1mn or US $28.4mn
Over 60 in Kyiv
Some communication “backbone” lines
Name
South
North
West
East
Dnipro-Donbas
Tavria
Route
Kyiv-Odesa
Kyiv-Belarus
Kyiv-L’viv
Oleksandria-Kharkiv
Oleksandria-Luhansk
Mykolaïv-Kherson-Simferopol
Equipment
STM-4
STM-4
STM-16
STM-16
STM-16
STM-4
Length, km
895
236
783
418
896
613
DT speed
622.08 Mbps
622.08 Mbps
2.488 Gbps
2.488 Gbps
2.488 Gbps
622.08 Mbps
Internet users
Year
1999
2000
2001
2002
Users, ’000
250
700-750
1,500
2,000
Source
DerzhKomZviazok
DerzhKomZviazok
SpyLOG, November 2001
SpyLOG, May 2002
Users of Ukrainian language Internet
Internet
access,
millions
share,
world on-line
populations
2003
estimated,
millions
Total
population,
millions
GDP,
USD,
billions
GDP
per capita
Net
0.82
14%
2
47
$115
$2,300
56
Source: www.glreach.com/globstats/index.php3
Internet hosts
Zone count, January 2000-May 2002
Host count, January 1997-May 2002
Source: RIPE Database, ww.uazone.org/inet
Source: RIPE Database, www.uazone.org/inet
17
SECTION 1:
NETWORK ACCESS
Internet Affordability
T
here are more than 3,000 computer clubs and Internet
cafés1 in Ukraine. Visitors can work with PCs or access
the Internet for a fee of Hr 1-6 per hour. In general, only
30% of computer clubs offer Internet access. In major
cities, this proportion rises to 50%, while in smaller centers it shrinks to 20%. The clubs with Internet access also
serve as IP telephony centres for international calls.
70% of all clubs with Internet connections access the
Internet through dial-up access, 20% through dedicated
lines, 10% through cable TV networks and others. The
majority of clubs work 24 hours a day, providing thousands of users with their only source of ICT.
The largest number of computer clubs, nearly 400, is in
Kyiv. It is followed by Dnipropetrovsk with more than 300
clubs, Kharkiv with around 280, Odesa with 230, and
Donetsk and L’viv with about 200 each. Almost every
town in Ukraine has at least one computer club.
Computer clubs have united into the All-Ukrainian
Association of Computer Clubs at www.uacc.org.ua. The
Association understands its capacity to alleviate the digital
divide in Ukraine and provide Internet access for the
entire Ukrainian population. It has put forward ambitious
plans to assist in the informatisation of the country.
Rural and Other Access Support
Rural access is developing through the network of postoffices. UkrPoshta has set up 28 Internet access points in
its branches. Seven of them are situated in Kyiv, 13 in
oblast centres and 8 in rural centres. This network is
expected to expand by 8-12 new access points per year.
Another network of public access is in the main oblast
libraries. 24 of 27 libraries of this type are equipped with
Internet access. All in all, though, of the 170 computers
connected to the Internet, only 67 are available for indi-
vidual users. This tendency to be so limited numerically
has encouraged development through the assistance of
various programmes. In particular, the International Renaissance Foundation has a programme called “Developing
Regional Information Portals and Information Centres on
the Basis of Public Libraries.”
UkrPoshta has also launched a new initiative to convert
Post Offices to e-centres. In general, however, the concept
of telecentres has remained underdeveloped in Ukraine.
History of Internet
UNDP was the first organization in Ukraine to provide free
Internet mail services when it established FREENET. By
1995-96, with the support of the International Soros
Foundation and the Open Society Institute, the National
Academy of Sciences, KPI National Technical University, the
National Agrarian University and the Ukrainian Physics
Society implemented a collective project to create the Kyiv
Computer Support Network. In 1997, the participants established an international charitable foundation called the
International Telecommunications Centre KS-NET or MTC
KS-NET. The foundation network consists of 5 nodes in Kyiv
and 3 nodes in Sevastopol, Bakhchisarai and Katsiveli.
In order to integrate the MTC KS-NET network into the
Ukrainian Internet, there are permanent communication
channels with the other ISPs in Kyiv and the State
Information Fund or sifu.net network. This network, in
accordance with a June 17, 1997 Presidential Decree, provides services not only to the divisions of SIFU itself, but
to a number of state, scientific and educational organizations. Sifu.net has nodes in all oblasts of Ukraine, which
are connected through 6 inter-regional information centres in Rivne, L’viv, Khmelnytskiy, Odesa, Dnipropetrovsk,
and Kharkiv. They are linked to each other via satellite,
radio relay, leased and commuted communication lines.
Share of weekly Internet users by city
Sources: www.freenet.Kyiv.ua:8080/ciesin, www.mct.Kyiv.ua/mct.html
Weekly Internet users and traffic by city… see Appendix A p. 60
1
“Computer clubs” and “Internet cafés” are common self-identifications for such kinds of enterprises
18
SECTION 1:
NETWORK ACCESS
Internet Services
Comparison of dial-up pricing schemes
company name
2001
Golden Telecom
Infocom
IP Telecom
Lucky Net
P5 Communications
Prime Net
Relcom
Ukraviatelecom
2002
Farlep
Golden Telecom
Infocom
IP Telecom
Lucky Net
Optima Telecom
Relcom
Service prices, USD
dial-up, unlimited
DT speed,K
dial-up,monthly fee
off-line
NA
up to 56
up to 56
33-57
up to 56
2.4-33
33-57
up to 56
NA
165
18
3.60
15
45
15-40
Aug. 30
NA
55-165
42
19.95
15
45
15-40
30
NA
free
12
3.60
10
5
5
up to 56
NA
up to 56
from 56
33-57
0.3-56
up to 57
Aug. 30
NA
Free
42
3.70
contract
15
30
NA
30
15
24.50
29
40
5
NA
10
12
3.70
0
5
other
callback
Comparison of leased line pricing schemes
Company Name
DT Speed
leased 57K
line/month
2001
Golden Telecom
Infocom
IP Telecom
Lucky Net
64-2Mb
9.6-1Mb
from 64
9.6-2Mb
negotiable
from 150
0.70 +0.08 per Mbps
100 (1Gb)
+0.06/Mbps
P5 Communications
Prime Net
Relcom
Ukraviatelecom
2002
Golden Telecom
Farlep
Infocom
IP Telecom
Lucky Net
Optima Telecom
Relcom
64-2Mb
8-25.6Mb
19.2-2Mb
9.6-2Mb
64-2Mb
no limit
up to 2Mb
64-8Mb
56-unltd
64-10Mb
33.6-7Mb
110-420
250
235-340
from 200
from 390
from 750
negotiable
from 100
110-450
400
250-400
from 100
170-1000
800
520-1100
from 300
300-1800
1000-2200
400
250
800
440
100
119
350
350
228
650
negotiable
125
0.70 +0.08 per Mbps
100
Negotiable
negotiable
Development of satellite channels
1999
2000
2001
2002*
Service prices, USD, including VAT
leased 64K
leased 128K
leased 256K
line/month
line/month
line/month
channel capacity frame relay DVB
45
45
75
60
15
140
60
80
200
60
140
840
negotiable
550
ISPs with direct satellite international access
1999
2000
2001
2002*
ISPs
15
45
120
140
*expert evaluation
Pre-paid Internet cards… see Appendix A p. 61
19
SECTION 1:
NETWORK ACCESS
IP Telephony
Wireless Voice Quality
There are about 60 operators sharing the IP telephony
market. This market has been marred by controversy, as it
is not licensed for voice communications purely through
computers, but seems to be considered fixed telephony
when it is terminated through the local loop. (More information is provided in Section 5.) The market size of IP
telephony, according to the High-Tech Navigator is $12
million. The consolidation of operators may become more
apparent once some regulation is in place.
The main reason for the growth of IP telephony in
Ukraine is the dramatic difference in cost. The per-minute
charge for IP telephony is fixed for most European countries and the US at $0.30, while standard IDD rates range
from $1.70 to the US, $0.80 to Central Europe, $1.10 to
Easter Europe, and $1.44 to the Middle East.
The quality of service is still poor in IP telephony as
there is no QoS regulation. The quality penalty is more
than compensated by the reduction of cost and satisfies
most users. IP telephony currently accounts for 2% of all
international traffic.
Naturally, the national provider, Ukrtelecom, reacted
to the growth of IP telephony by introducing a surcharge
of $0.06/minute for guaranteed access through its network, to compensate for lost revenues. In addition, the
government has introduced a license for IP telephony of
$167,000 for five years. The High Tech Navigator reports
that IP telephony companies, despite these additional
costs, have not yet increased their pricing structures.
The specific gravity of effective calls as a percentage of the
total number of calls through automated long-distance
telephone communication was 42.7% in 1999 and 43.71%
in 2000.
Network Speed and Quality
Analog vs digital
Bandwidth
capacity in Mb/s
61
92.51
300
1999
2000
2001
source
DerzhKomZviazok
DerzhKomZviazok
expert evaluation
Line readiness
Fixed Line Reliability
I
n 2001, the average of completed outgoing calls was
about 88%. Outgoing calls were approximately 44% of
the total traffic. The reliability of fixed infrastructure is
close to the 0.999 level.
Urban and rural telephony
1999
2000
faults detected in urban exchanges
total
% cleared within standard time
3,472,380
95.2
3,794,685
95.2
total
847,170
926,068
faults detected in rural exchanges
% cleared within standard time
91.9
93.1
Source: Statistical yearbook on the activities of the Communications Administrations 2000
Urban telephony, payphone checked (urban, universal)
total
1999
2000
59,900
62,200
absolute value
16,500
16,700
Source: Statistical yearbook on the activities of the Communications Administrations 2000
20
those detected as out-of-order
as % of checked payphones
27.5
26.8
SECTION 1:
NETWORK ACCESS
Universal Service
Types of public phones
Payphones are located throughout Ukraine. Service is an
integral component of PSTN, using channels, connection
lines, commuting switches, technical maintenance centres, and other PSTN facilities. Payphone services currently include city, long-distance/international and universal
payphones. At the beginning of 2000, payphones were
divided into:
•
urban and rural: 56,500 standard units;
•
long-distance and international: 16,300 international units.
Access to these phones is available through prepaid
cards and cash.
Cardphone distribution
Hardware and Software
Computers
Market Structure
490 companies are manufacturing and assembling PCs in
Ukraine today. The leading PC vendors in 2001 were, in
alphabetical order: AMI, Diawest, e.service, Help, K-Trade,
Kvazar-Micro, MKS, Navigator, Prime Computers, RIM
2000, SpetsVuzAvtomatika, and Versia.
According to the Ukrainian Association of Software
Producers, UASP, the installed PC base in 2001 was more
than 1,310,000 units. According to estimates by KvazarMicro, around 400,000 locally-made PC were sold in
Ukraine in 2001, and the total number of computers working under the Windows OS nationwide is 1.5-1.7 million.
Cost of computers, USD
item
average minimum average maximum
PC
$300
$600
notebook
$1,000
$1,500
PIII server
$2,000
$4,000
PIII Xeon server
$5,000
$10,000
PIV server
$7,000
$15,000
PC units sold, USD
Hardware Manufacturing
IDC, a market research company, regularly publishes an
extended review of the computer market in Ukraine.
According to one IDC report, in Q4 2001, the volume of PC
supplies to Ukraine reached a record level for recent years at
73,500 units. During the same period in 2000, the figure was
source
Dataquest
1998
1999
2000
177,373
182,620
203,748
Ukrainian Association
of Software Developers
200,000
240,000
+290,000
Source: http://itc.ua
Manufacturers of hardware
company
indices
notes
Odessacable, Ltd.
Prozhektor, Ltd.
CheZaRa, Ltd.
SP Micro-Code Ltd.
Equipment for digital data transmission via cables
and fiber-optic lines at speeds from 2Mbit/s
to 155Mbit/s to build primary DTN is produced
in Ukraine
These enterprises today have
a 15% share of the Ukrainian
market for equipment for
primary networks.
ZAT ITECH
Dniprovskiy Machinery,
a state holding company
ELTECH Company
Equipment to build subscribers’ access network
to the Internet (host servers and access servers,
switchboards, routers, concentrators, leased line
transmission modems, hosts for high-speed
Internet access xDSL, modems xDSL)
Currently the first and leading
(since 1999) Ukrainian producer
in this sector is the company
ITECH.
Source: ITECH-CheZaRa 2002
21
SECTION 1:
53,000. This reflects an annual growth of 38.2%. According
to IDC, this was achieved thanks to improving economic
conditions during the last two years. In addition to greater
activity among small and medium businesses, a growth in
project supplies was seen in the corporate sector. IDC predicts
that this factor will determine the growth of the Ukrainian
PC market throughout 2002. (See www.idcrussia.ru)
Some Ukrainian companies are also manufacturing
network equipment for the construction of data transmission networks or DTN and access networks on the basis of
IP protocols without information content.
NETWORK ACCESS
Access to IT support training
There are many training centres for IT specialists, some of
which are listed here, as well as a number of corporate training and professional development centres (see table in
Appendix A p. 60). Ukrtelecom has the largest specialized network, with 25 affiliates in the oblasts. Traditionally, many
services such as training and professional upgrading are also
provided in centres in Moscow.
Expos and conventions
Software Development
The domestic software development market is estimated at
$39 million. This is concentrated on the business segment
and the development of special applications. In general,
software developers tend to steer away from IP-related applications because of piracy concerns (see page 38).
The off-shore market is approximately the same value
as the domestic market.
Service and Support
U
kraine has a well-developed network of consulting and
after-sales services to support and provide warranty
services for a wide range of equipment. Practically all
known brands have their client service networks in
Ukraine.
22
EnterEX
Ukraine’s largest trade show for computers, software and
office equipment has run annually since 1994. In 2001,
net exhibition space was 2,809 sq m, with 135 exhibitors,
37,000 visitors to the B2C exposition, and 21,000 to the
B2B exposition. For the first time, at EnterEX 2001, an
American pavilion was organized under the auspices of the
US Embassy in Ukraine. In 2002, net exhibition space was
2,551 sq. m, with 121 exhibitors and 15,471 visitors. The
trade show takes place under the auspices of DerzhKomZviazok at the National Expo Centre in south Kyiv.
Expotel
This international telecommunications trade show was held
for the first time in 2002, also at the National Expo Centre.
Source: www.euroindex.com.ua/index.php?m=1&lng=e
SECTION 2:
NETWORKED
LEARNING
Improving ICT facilities is recognized
as one of the most pressing issues in
the educational sector. A special
chapter of “The National Doctrine for
the Development of Education,” a
strategy document approved by the
President in April 2002, is dedicated
to the information technology issue.
The introduction of modern
information and telecommunications
technology is highlighted as a priority
in the development of education: it
can ensure improved training and
educational processes, an accessible
and efficient education system, and
prepare the young for an active life
in the information society.
SECTION 2
NETWORKED LEARNING
Background
•
providing telecommunication facilities to educational institutions to enable access the Internet,
with software and computer applications;
•
designing, replicating and distributing educational
software
•
developing a national certification system for educational computer applications;
•
preparing and publishing teaching materials and
textbooks on IS for teachers and students;
•
designing a unified IS to manage the teaching system and information infrastructure of educational
institutions;
•
bringing the software used in Ukraine in compliance with the law on language;
•
establishing regional distance learning centres,
mainly for rural students, and resource centres for
computerizing education.
I
mproving ICT facilities is recognized as one of the most
pressing issues in the educational sector. A special chapter of “The National Doctrine for the Development of Education,” a strategy document approved by the President in
April 2002, is dedicated to the IT issue. The introduction
of modern information and telecommunications technology is highlighted as a priority in the development of education: it can ensure improved training and educational
processes, an accessible and efficient education system,
and prepare the young for an active life in the information
society. The strategy expects to achieve this through:
•
•
•
completely computerizing education to satisfy the
educational, information, computing, and communication needs of the participants in the training
and educational process, based on establishing a
uniform information structure;
introducing distance learning, with the use of information and telecommunication technologies
together with traditional teaching methods in the
educational process and and library science;
building individual module-based curricula of various degrees of complexity, depending on specific
needs;
•
publishing online textbooks;
•
creating a domestic industry of modern training
aids which comply with international scientific and
technological standards and are the prerequisite for
implementing efficient policies intended to achieve
the goals of education.
ICT Access for Schools
Computers in Public Schools
This strategy obliges the State to support the process of
computerizing education to:
•
apply information and telecommunication technologies within the system of education,
•
promote the provision of educational establishments with computers and modern training aids,
•
introduce global information and educational networks,
•
and to establish an all-embracing system to monitor the quality of education at all levels.
In addition, the President mandated the Cabinet of
Ministers to develop a National Information Systems
Programme for 2002 and years to come in an Oct. 9, 2001,
decree “on further measures to ensure the development of
education in Ukraine,” #941/2001 (see details in Section 5).
The Decree emphasizes enhancing the provision of IT support in the education system on a top-priority basis, specifically by:
24
Ministry of Education official statistics indicate that there
are computers in 8,224 schools out a nationwide total of
21,226, that is, 38.2% of the total. Disparities between
urban and rural schools are huge: 65% of urban schools
have computers, while only 26% of rural schools are so
equipped.
Only about 25% of the total are 486-type PCs, Celeron,
MMX and Pentiums. The rest are outdated soviet contraptions, reducing the total number of usable computers to
only about 24,000.
At the beginning of the last school year, computers
were networked in computer labs, serving around 10 students and one teacher each, in 7,649 schools. Computers
in urban schools increased by 1.5% from 1999 to 2001.
The 4,153 computer labs now located in urban schools
cover more than 60% of such schools. However, these
numbers are expected to decline as many outdated computers will soon be phased out.
During the last school year, about 240 additional
schools were equipped with computers. Of these, 10%
were funded by the government and the rest by local,
municipal and regional budgets.
Computers in school computer labs, 2000/2001
urban areas
rural areas
Total
(including 75% outdated computers)
54,297
36,519
90,810
SECTION 2
NETWORKED LEARNING
School access to computers
total
schools
schools with computers
computer labs
total computers
computers in labs
486 PCs and higher
6,506
4,239
4,009
55,852
52,587
16,966
urban areas
by grades
1-9
10-12
677
5,398
86
4,094
44
3,943
529
55,012
406
51,905
140
16,675
total
14,720
3,801
3,494
35,155
36,465
3,820
rural areas
by grades
1-9
10-12
5,438
6,647
261
3,536
84
3,410
1031
34,111
758
35,707
195
3,622
(including 75% outdated computers)
21,226
8,040
7,503
91,007
89,502
20,786
total
by grades
1-9
10-12
6,115
12,045
347
7,630
128
7,353
1,560
89,123
1,164
87,612
335
20,297
Source: Ministry of Education and Science
By far, the most computers are in the nation’s secondary schools, those grades considered senior high school.
Only about 5.7% of middle schools, those offering Grades
1-9 or elementary and junior secondary schools, are
equipped with computers. These add up to 1,560 or a mere
1.75% of the total computers available in schools, and
only a few –335 or 21% of these– have new-generation
processors.
The Razumkov Centre conducted a survey among the
parents of school children to find out about their access to
computers and the Internet and another one among
teachers about their own access. Disparities between urban
and rural areas are extremely wide. Disparities among the
regions are also exteremely wide when it comes to the
level of access the schools themselves have.
School Access and Computerization Programme
Disparities between different regions of Ukraine are also
extremely wide, ranging from a low of 16.7% in the Ternopil region to 53.45% in Kherson and over 70% in Kyiv and
Sevastopol at the end of the 1999-2000 school year. The
number of PC-type computers is low, however, –3-4%,
depending on the oblast– compared to the total number of
computers. Many regional authorities have initiated local
Student access
to computers
at school
at home
at extracurricular
institutions
to Internet
at school
at home
at extracurricular
institutions
total
urban
27.2%
16.0%
rural
12.1%
3.3%
nationwide
22.4%
12.1%
29.6%
11.7%
23.9%
3.5%
1.3 %
2.8%
3.9%
computerization programs, and 90% of computers were
bought at the oblast level.
Since the beginning of the 2000-2001 school year,
computers have been distributed to selected schools under
a rural school computerization programme. Altogether,
the government reports that it spent $4 million during
first year of this programme.
Computers in Post-Secondary Institutions
Students at institutions of higher education continue to
have surprisingly limited access to the Internet, according
to data from a 2002 survey by the Razumkov Centre.
The quantity of PCs available at Universities –related
data is available for Ministry-supervised institutions only–
increased from 4.46 per 100 students to 5.77 per 100 students from 1995 to 1999. Students have better facilities at
technical universities –8.88 PCs per 100 students– and
other technical institutions –11.27 PCs per 100 students in
1999.
Post-secondary access
at home
at University
other places
no access
access, %
to computers
to the Internet
students faculty students faculty
10.4
22.8
3.6
5.3
20.8
39.4
6.6
28.5
25.9
10.2
21.2
15.4
50.8
37.8
70.6
54.1
Libraries
10.7%
Teacher access
to computers
at school
at home
at extracurricular institutions
no access
to Internet
at school
at home
at extracurricular institutions
no access
nationwide
12%
13.3%
14.1%
63.1%
2%
4%
16.1%
78.3%
A National Electronic Network of library resources has
been developed to connect three main national libraries:
The Vernadskiy National Library, the Verkhovna Rada Library, and the Kyiv Library at Taras Shevchenko University
at www.library.univ.Kyiv.ua. More than 20 Ukrainian libraries have become members of the network as can be seen
at library.univ.Kyiv.ua/ukr/res/resour.php3. On the basis of
this network, there is an active on-going process in designing and establishing of a unified national standard of
library catalogue registration records, similar to MARK.
Another network of public access is in the main oblast
libraries. Already 24 of 27 such libraries are equipped for
Internet access. But of the 170 computers connected to the
Internet, only 67 are available for individual users. This
practice of restricting access has stimulated various assistance programmes, in particular one run by the IRF called
“Developing Regional Information Portals and Information Centres through Public Libraries.”
25
SECTION 2
NETWORKED LEARNING
Enhancing Education With ICT
Post-Secondary Network
Software in Primary and Secondary Schools
A
ltogether, 3,729 different institutions for learning are
equipped with some sort of educational software.
2,341 of these schools are urban, 1,388 rural.
In all, there are some 21,105 educational software
packages, nearly half of which are relevant to science and
maths curricula and a quarter to humanities.
After a competition organized by the Centre for Approaches to Education in 2001, 200 original computerized
proposals were selected. An agreement to develop them
was signed with 13 institutions of higher learning, mainly
universities. However, only UAH 300,000 –instead of the
promised UAH 2,500,000– has been paid by the government so far.
The network of post-secondary institutions provides education for 392 students for every 10,000 people and includes 979 institutions. Among them, vocational schools,
technical schools and colleges make up 664, including 593
state-run institutions and 71 private ones, with a total student population of 528,000. The remaining 315 institutions, including 223 state-owned ones, are 106 universities, 59 academies and 150 institutes with a student population 1,403,000.
Demographically, 1,086,000 students or 90% of the
total are between 17 and 24 years old. In 2000, 17,100 students in Ukraine graduated with bachelor’s degrees,
175,700 as specialists and 10,600 with master’s degrees.
Specialties related to ICT, at start of 2001–2 school year
1=state funded; 2=branch funded; 3=privately funded; 4=state funded; 5=employed after graduation; Bac=Bachelor; Sp=Specialist; M=Masters
specialization
enrolled
graduated
total
Telecommunications:
Bac
Telesystems & networks:
Sp
M
Computer-integrated technologies:
Bac
Sp
M
Information-measuring systems:
Sp
M
Computer systems,
automation & administration:
Bac
Sp
M
Flexible computer systems:
Sp
M
Computer engineering:
Bac
Computer systems & networks:
Sp
M
System programming:
Sp
M
Specialized computer systems:
Sp
M
Source: DerzhKomStat, 2002 Statistics bulletin
26
institutions
total
state
total
1
2
3
4
5
1,496
691
53
752
1,299
944
320
7
7
82
63
42
25
-
40
38
547
55
328
48
167
23
5
6
5
6
1,584
791
730
827
298
163
4
28
3
753
465
564
763
1,127
547
602
789
411
67
556
289
24
29
26
24
29
26
181
90
35
63
3
-
143
27
135
54
86
52
77
29
4
3
4
3
1,253
555
574
431
273
230
16
11
806
282
333
628
810
534
420
667
426
49
440
249
11
19
15
10
18
15
67
-
34
-
33
119
17
110
15
98
15
4
2
4
2
1,738
588
6
1,144
564
309
67
15
15
1,566
534
367
195
1
17
1,198
322
725
663
537
456
424
268
23
18
22
18
189
80
81
12
4
108
64
83
64
71
19
55
18
7
2
7
2
234
64
96
25
4
-
134
39
196
76
184
69
159
44
9
6
9
6
SECTION 2
NETWORKED LEARNING
History of Distance Learning in Ukraine
In 1995, UNESCO specialists, the International Centre of
Information Technologies, the National Academy of Sciences, and the Ministry of Education and Science began
working in distance learning technologies using computer
telecommunications with international cooperation.
Partners included leading universities in the UK, the Netherlands, Bulgaria and Lithuania, Sumy State University,
Kharkiv State Polytechnical University and the Odesa Academy of Telecommunications.
By 1996, the first free distance learning course in
Ukraine “Distance learning to work in the Internet” was
developed. In all, 352 students from seven CIS countries
took part in it. Kyiv-Mohyla Academy began to work in this
area, on a project called “Internet training of trainers,” as
did the State Academy of Telecommunications and L’viv
Polytechnical. In 1997, a number of pilot experiments were
undertaken with the WBT to test WWW-based courses.
In 1998, the training of teachers from the International
Finance University began. In 2000, the National Centre for
Distance Technologies was set up. The International Financial University and The Institute of Investment Management, both in Kyiv, introduced Internet-based distance
learning in specialized areas like banking, international
finance, and so on.
In 2001, an international centre for distance learning
technologies opened under the auspices of the UNESCO
International Centre. By 2002, practically all large cities in
Ukraine and all large educational institutions had some
elements of distance learning as a second degree. Public
domain edu.ua for higher educational institutions –of the
3-4 levels of accreditation– has been established. Today, it
has 69 subdomains. Distance learning issues are regularly
discussed on www.udl.org.ua.
Distance learning departments and courses, at June 2002
Nº
1.
organization
Kyiv National Taras Shevchenko University
2
Ukrainian Distant Education Centre, Kyiv
3.
4.
5.
International Financial University, Kyiv
Kharkiv Polytechnical University
V.M. Glushkov Center of Cybernetics, Kyiv
6.
L’viv Management Institute
7.
8.
Nikopol Institute of Management,
Business and Law
Kyiv Institute of Investment Management
9.
Kharkiv Technical University of Radioelectronics
8.
Academy of State Administration under
the President of Ukraine, Kyiv
Ukrainian Institute of Scientific-Technical
and Economic Information Kyiv
9.
10.
11.
12.
13.
Sumy State University
Ternopil State Technical University
Kharkiv Aviation Institute at the Zhukovsky
National Aerospace University
Kyiv University of Information and
Telecommunications Technologies
DL departments
courses
ICC
UNINET network
5
4 DL labs on the basis of
6
Kyiv Polytechnical University
DL lab
51
DL lab
38
UNESCO International
12
Scientific and Training Center
for Information Technologies
and Systems
UDL System
(Ukrainian DL System)
3
DL Department
DL Server
13
3
Laboratory of Virtual
Distant Learning
2
World Bank DL Center
4
SEMicom Computer
Training Center
DL Lab
6
25
9
Osvita DL Center
2
DL Department
3
cost, USD
free
50-100/course
500/year of training
250/year
100/6 months
130-140/course
free
Source: UNESCO International Centre of Information Technologies, NAS, Ministry of Education and Science and Ukrainian Distant Learning Centre in Kyiv
27
SECTION 2
Other Education Initiatives
In 1993-96, UNDP assistance resulted in several other
Ukrainian “firsts:” the creation of the first Ukrainian academic and research network, UARNET; the first public
access Internet portal on Kyiv FreeNet; and the connection
of both Ministries and the Verkhovna Rada to the Internet.
In 1997-2000, UNDP continued to build on its ICTD portfolio with initiatives aimed at strengthening the ICT and
networking capacity of key Ukrainian institutions.
Highlights of these “second generation” programmes
include in particular: setting up a network between Ukraine’s universities and national libraries, and expanding
the support of higher education networks. A new programme on the UNDP agenda, called Innovation
Springboard, was launched on Sept. 28, 2001, to strengthen the process of balanced national development and
poverty alleviation though appropriate and innovative
uses of information and communications technologies.
The Ukrainian Research and Academic Network or
URAN computer data transmission network is today the
network for Ukrainian science and education. It is segmented into seven regions: Central in Kyiv, Northeastern
in Kharkiv, Eastern in Donetsk, Dniprovskiy in Dnipropetrovsk, Southern in Odesa, Western in L’viv, Crimean in
Simferopol.
28
NETWORKED LEARNING
Developing The ICT Workforce
T
he Cisco Network Academy was started in Ukraine in
partnership with Kyiv National Taras Shevchenko University, UNESCO and Cisco Systems, and became fully
operational in October 2001. Having the status of a regional institution, the Academy actively educates network
engineers, not only for Ukraine but for countries in the
entire region, particularly Central Asia. Initially, the Academy benefited ICT institutions in Azerbaijan, Kazakhstan, Kyrgyzstan, Tadjikistan, Turkmenistan, Ukraine, and
Uzbekistan by educating trainers in new networking technologies. The Academy addresses the growing demand for
ICT specialists and experts and provides a basis for better
meeting the challenges of the emerging information economy in the region. (See also Section 1, p. 22 and associated table in Appendix A, p. 60, for software development
and service support training.)
Since its creation, the Regional Academy for Advanced
Network Administration and Design has trained over 200
fellows in a variety of specialties. The RAANAD programme is based on an e-learning model that delivers webbased educational content, online testing, student performance tracking, instructor training and support. It
combines lectures and online learning with hands-on laboratory exercises in which attendees apply what they learn
in class while working on actual networks. On completing
a training session, participants take certification exams for
CCNA degrees.
The International Civil Aviation Organisation’s Aviation Security Centre, the seventh centre of its kind in the
world, has been established in partnership with the Kyiv
National Aviation University and UNDP. The Centre trains
aviation specialists and works for ICAO scientific and security programmes.
SECTION 3:
NETWORKED
SOCIETY
UNDP commissioned a survey of ICT
penetration in June 2002. The survey
was conducted by the Centre for Social
Expertise in six oblasts in Ukraine:
L’viv, Donetsk, Luhansk, Kharkiv,
Ternopil, and Ivano-Frankivsk. The
sampling size was 1,200 and
represented the demographic make-up
of Ukraine. Kyiv was deliberately
excluded from the survey to focus
mainly on the regions. While the
prevalent share of Internet users is
concentrated in the capital, the
survey fully details the situation
in the regions.
SECTION 3
UNDP ICT SURVEY
UNDP commissioned a survey of ICT penetration in June 2002.
The survey was conducted by the Centre for Social Expertise in
six oblasts in Ukraine: L’viv, Donetsk, Luhansk, Kharkiv,
Ternopil, and Ivano-Frankivsk. The sampling size was 1,200
and represented the demographic make-up of Ukraine. Kyiv was
deliberately excluded from the survey to focus mainly on the
regions. While the prevalent share of Internet users is concentrated in the capital, the survey fully details the situation in the
regions. Selected data from the survey is in Appendix D, p. 67.
The survey shows a high level of basic awareness of ICT
among the population: 75% of respondents knew about the
Internet and over 95% knew what a PC is. However, the level
of actual penetration for the Internet and the usage of PCs is
much lower, at 34% and 46%.
Occasional use of the Internet is common. According to
30% of respondents, the most popular places of interaction are
public access centres such as cyber-cafés or Internet clubs. The
method of access also determines its frequency: 53% used the
Internet from time to time, 21% used it several times a month,
16% several times a week and only 8.8% used the Internet
daily.
NETWORKED SOCIETY
of Ukraine, according to the last census conducted in
December 20011, there is a definite discrepancy in gender
representation on-line.
Digital Divide by Age
The lowest number of people who knew what the Internet
was pensioners: only 44% were aware of it. However, 81%
of young people between 9 and 18 years old knew what
the Internet was, and the highest percentage of awareness
was reported by people between the ages of 20 and 40.
Internet awareness by age
People and Organizations On-line
ICT Awareness and Penetration
ICT Awareness and Penetration by Occupation
T
Expectedly, the lowest level of awareness about the
Internet, 26.83%, was observed among farmers and workers of collective farms. This corresponds to the low level of
available information infrastructures in rural areas. They
are followed by pensioners. The same two occupational
groups are outsiders in the awareness of the PCs, at
92.68% and 80.17%. The most Internet-savvy categories
are entrepreneurs, at 93.06%, and students, at 93.66%, followed by state employees, 85.80%. The level of actual
Internet penetration is the highest among students, at
72.50%.
People with higher educations dominate the Internet
in Ukraine, representing 79% of all users. It is also possible
to note a substantial presence of top and mid-level managers among the users of the Internet. In general, 80% of
Internet users are employed and 67% of the remaining
20% are students2. According to this survey, Internet users
in general perceive themselves financially as doing well,
43%, or even wealthy –16%.
According to the sales director of Mediacom, an Internet advertisement firm, the average user is a 24-35 yearold mid-level manager who uses the Internet at work.
here is a direct connection between the place of residence and the level of penetration and access to ICT,
and, not surprisingly, the rural population is fairly disadvantaged in the use of ICT.
Digital Divide by Gender
There is a slight gender gap in Internet and computer penetration. The share of women among computer and
Internet users is smaller. Marginally less women, at 73%,
than men, at 77%, know what the Internet is and fewer
women, at 44%, than men, at 49%, ever used a PC.
According to the data of another survey conducted by
MMI Ukraine, the distribution of Internet users by gender
is 61% men and 39% women. Taking into account the
prevalence –54%– of women in the demographic make-up
30
Organizations On-line
A substantial share of the more than 15,000 Ukrainian
websites represent organisations and institutions. Model
agencies and lotteries, private associations, consulting
groups, radio stations and religious organisations all create
1
2
www.ukrstat.gov.ua/
www.korrespondent.net/main/34688/
SECTION 3
NETWORKED SOCIETY
websites, look for new affiliates or partners, and distribute
information about their activities on-line. (See table p. 33)
Locally Relevant Content
T
he share of Internet users in Kyiv compared to all
Ukrainian Internet users is overwhelming, and altogether they comprised 66% of all UAnet3 users in 2001.
Kyiv is followed by Odesa, Dnipropetrovsk and Donetsk
oblasts4. The least represented oblasts are Rivne, Chernihiv, Cherkasy. The high representation of the top three
oblasts is due to the presence of major infrastructure providers, a favourable business environment, and the presence of highly-qualified personnel looking for new niches
in the process of economic restructuring.
The typical representation of an oblast in the UAnet is
composed of a city portal, several local Internet providers,
commercial companies, and the websites of business and
personal advertisement. At least one or two higher educational institutions are usually present on-line. The same is
true of local media.
Portals
Some national portals offering comprehensive links, but
they experience double competition from international
English language portals like Google and Yahoo and Russian portals, which have powerful search tools5. Yandex, a
Russian portal, even offers special searches within Ukraine.
The leader among national portals is Meta-Ukraine. It provides regional and thematic searches and basic reference
services. El-Visti, Asearch6 and UAportal7 follow MetaUkraine in the number of hits. Thematic or vertical portals
provide information on business tourism, civil society and
so on. The World Bank has initiated a national global
development gateway portal as well8.
Financial Websites
There are a substantial number of websites providing financial information and services on-line9. There are both general news services such as www.interfax.Kyiv.ua and specialised sites such as www.ufs.Kyiv.ua. Liga-online10, identifying itself as an “information business portal,” is a viable
tool for everyday use covering business and political news,
press monitoring, stock market information and foreign
exchanges. Liga-online was the first portal in Ukraine to
provide a ‘Real-Time terminal’ – with applications operating
on the currency and stock market in real-time format.
Several business topic forums provide space to discuss ongoing issues and share individual experiences with colleagues.
A sizeable number of Ukrainian websites publish the
prices of various goods while running commercial advertisements. The array of goods and services presented there
is indeed vast: from pulp and plastic tubes to translation
and marketing services. Such sites serve as natural marketplaces for SMEs and individuals.
Shopping and Food On-line
On-line shopping substantially lags behind other Internet
activities in Ukraine. The limited number of credit cards
forces commercial websites to use other forms of payment.
Three main types of payment are used when customers buy
goods on-line: payment upon delivery, filling in bank invoices on-line and making an off-line bank transfer, and payment
by credit card. According to TNS “Global e-commerce report.
2002”11 the percentage of on-line buyers among the Internet
users has actually decreased: from 22% in the year 2001 to
only 6% in 2002. A lack of trust and uncertainty about the
quality of goods have substantially increased among potential on-line shoppers. Some of them were repelled by their
first unsuccessful experience with on-line shops.
Buying goods on-line is considered by both corporate
and private users as a low priority for at least the next two
years, according to a UMG survey dated June 2001.12
However, several specialised on-line shops in the capital sell mobile phones, household appliances, and books.
The first on-line supermarket13 sells food and beverages,
and takes payment both through credit cards and COD.
Sample of city website profile: L’viv
www.lvivbest.com
www.lviv.ua
www.city-adm.lviv.ua
www.franko.lviv.ua
www.ce.lviv.ua
www.bizinform.net
www.vacancy.ukrbiz.net
www.in-lviv.com.ua/dov
www.adrenalin.lviv.ua
www.spea.lviv.ua/index_win.html
www.postup.itgo.com/main
3
4
5
6
7
8
The Ukrainian Internet space
Oblast – a regional division in Ukraine
http://www.umg.com.ua/rus/issl/issl_rez_prco.html
search.avanport.com/rus/default.asp
www.uaportal.com/
www.e-ukraine.org
regional portal, presenting L’viv Internet resources
English language portal about L’viv
L’viv City Council
Ivan Franko National University of L’viv
regional information resource
business catalogue for commercial enterprises and goods
employment agency
L’viv yellow pages, for finding enterpries or institutions on-line
information and promotion of “extreme” sports in L’viv
Yavoriv Economic Zone
Postup, a L’viv newspaper
www.liga.net and www.finance.com.ua
www.liga.net
11
www.tnsofres.com
12
The Internet services market in Ukraine, UMG. June, 2001
www.cebit.Kyiv.ua/conferences/internet/reports.html
9
10
31
SECTION 3
NETWORKED SOCIETY
Reasons for not buying on-line (among Internet users)
Do not trust on-line products/lack of trust
Never know what you will get
It’s safer to buy goods or services at a regular shop
Products or services found in Internet do not interest much
It’s easier and more enjoyable to buy goods or services at a regular shop
High prices
It’s too complicated/lack of necessary skills
Do not want to leave credit card number/security problem
Delivery time is too long; other problems related to delivery
Creditworthiness was not checked
Other reasons
Culture and Entertainment On-line
Ukrainian literature is in a continuous publishing crisis
and is trying to find its audience on-line. The literary website Samvydav14 site, which identifies itself as “the labyrinth of Ukrainian self-publishing” – the old samizdat of
soviet underground days – presents modern independent
Ukrainian authors.
Excellent Ukrainian theatre life is broadly represented
on the Modern Ukrainian Theatre website15. Galleries16 and
individual artists17 are busy creating their own sites to gain
publicity through virtual exhibitions. There are more than
100 sites devoted to Ukrainian musicians and several
dozen entertainment portals aimed at various target audiences, particularly young people.
There are several sites that rate restaurants in Kyiv:
chicken.kiev.ua and afisha.bigmir.net. Major cities also
have entertainment guides that mainly offer the addresses
of restaurants and clubs without any ranking.
Job Search On-line
Although the majority of job-search sites have started
operations only within the last three years, they are quite
well developed. Most of them promote both with job seekers and employers and concentrate on the capital and
major cities –though a limited number of vacancies in the
regions are available18. Recruiting agencies are represented
on-line and offer e-forms for placement in the agency
database. Southern oblasts adjacent to the sea have several specialised on-line crewing agencies for seamen19.
Politics On-line
Ukrainian political life is gradually moving on-line,
although its proportion among user inquiries is still
small. At the moment, according to data from the MetaUkraine portal20, there are 70 sites belonging to Ukrainian political parties, 42 personal sites belonging to indivitual politicians and 42 politically-oriented news sites. Of
these, 70% are regionally situated in Kyiv21. The spring
2002 elections saw the launch and promotion of numerous research firms and institutions that claim to specialise in political affairs and public relations. At least 15
13
14
15
16
17
18
19
www.furshet.com.ua
www.samvydav.net/
www.virtep.org/announce.htm
www.ukrart.com/
www.muza.Kyiv.ua/
ajob.avanport.com/, www.vakansii.com.ua/, rabota.com.ua/
www.naut.utel.net.ua/, www.midmed.odessa.ua/
32
2001
21%
6%
6%
8%
7%
18%
13%
6%
3%
0%
29%
2002
24%
20%
15%
14%
14%
8%
7%
0%
0%
0%
22%
of them are represented on the Net. The Internet was also
widely used in the first hours after the elections to access
immediate results.
Government Sites
There are around 200 sites ending in the gov.ua domain,
70% of them situated in Kyiv22. One of the oldest Ukrainian resources is the site of the Verkhovna Rada, the
country’s legislature23. It was established in the fall of
1993.
However, the executive branch was rarely on-line until
a Jan. 4, 2002, Cabinet Decree on the order of publication
of information about the activities of the executive branch
in the Internet network. Government structures and
departments were obliged to “provide publication and
continuous maintenance of information on their own
websites in the Internet” in an order determined by the
Decree. In particular, the government website is supposed
to include: the name of the institution, its main objectives, the legislative base for its activities, its structure and
names of top managers, the location of its offices, legislation related to its activities, opening hours, news, and so
on. The Cabinet of Ministers site24 serves as a vertical portal for government resources.
To date, all the Ministries and 11 of 17 State Committees have launched their own sites. 25 of 27 oblast administrations are also represented on the Web.
NGOs On-line
Various social services that deal with different aspects of
life in Ukrainian society can also be found on-line. A site
devoted to consumer protection, www.potrebitel.org.ua,
provides legal consultation and information on the safety
of new products and services. It also contains a “Cheaters’
Museum,” with examples of bad practices.
There are several high-quality Internet sites for people
with disabilities. The International Renaissance Foundation-sponsored website for blind people assists with free
downloads of specialised software, educational and entertainment programmes25. The Association of disabled IT
professionals turned its site into a comprehensive portal
20
21
22
23
24
www.meta-ukraine.com
O.P. Golobucki, O.B. Shevchuk, 2002. Electronic Government. Kyiv, Atlant
UMS
GIPI presentation at the E-governance in Ukraine roundtable, Feb. 8, 2002.
www.rada.gov.ua
www.kmu.gov.ua
SECTION 3
NETWORKED SOCIETY
dealing with all aspects of life for disabled people, their
problems and special needs26. Despite its comprehensive
nature and useful content, the number of visitors remains
minimal – only 1,035 visitors registered since the chapter
was created. The service has existed since 2000. This is primarily due to the low incomes earned by the disabled and
the absence of information networking among them.
The Civic Internet portal initiated and implemented
by the IRF27 and the UNDP28 aims to facilitate civil capitalization in Ukraine by providing proper IT services for the
benefit of the third sector. It also serves as a meeting place
for third sector organisations. Its web catalogue provides a
snapshot of the type and number of organisations active
on-line.
Hot Internet topics
Source: Meta-Ukraine portal survey, May 2002
Civic organizations on-line
On-line Medicine
Medical services and institutions alike are represented on
Ukrainian websites, although health and medicine are not
among the top priorities for users29. Thus, in May 2002,
these issues comprised 1.13% of all inquires by Ukrainian
users . One example is the vertical portal Mednavigator30,
which provides health-related information: health-care
publications, professional consultations on-line, pharmaceutical reviews of novel alternative medicine. Drugs can
be ordered on-line through an e-drugstore at www.e-apteka.com.ua or tracked through the pricelists of distributors
at www.ukrwest.net/~wzrv/ttpharm/index.html.
Art unions
Children’s rights advocacy
organizations
City development organizations
Civil society and democratic
support organizations
Commercial and business associations
Donors
Ecological organizations
Educational organizations
Health protection organizations
Institutes
Legal and remedial organizations
Mass Media
Nationally-oriented organizations
Organizations for developing an information
society
Organizations of national minorities
Resource centres
Social and political organizations
Social services
Sports organizations
Think-tanks
Trade unions
Women’s organizations
Youth organizations
Education Networks
Education is second in popularity for Ukrainian Internet
users. Educational institutions at all levels, starting from
kindergarten, are represented on-line.
A useful resource, Educational Network Ukraine at
www.ednu.Kyiv.ua, provides information about the educational system in Ukraine, international and domestic
scholarships, and links to higher educational institutions
and nascent distance learning programmes.
In Ukraine, it’s very popular among students to
retrieve academic reference materials and papers from the
Internet. There are a number of sites that host collections
of various ready-made papers, so called “referats”31. In fact,
the word “referat” leads the most popular words used for
Internet inquiries, according to Meta-Ukraine32.
2
2
4
2
11
13
6
11
6
2
7
4
6
6
7
5
20
2
2
6
9
6
28
Education websites
higher institutions
special/ vocational education
secondary schools
educational organisations
education abroad
training courses
25
26
27
28
michint.hypermart.net/
www.aik.Kyiv.ua/ru/
www.irf.Kyiv.ua/ukr/
www.un.Kyiv.ua
www.meta-ukraine.com
A-Search
www.yandex.ru
(Russian search engine)
154
32
65
75
42
101
216
53
36
37
101
71
12
21
13
meta-ukraine.com/WIN/rs/dynamics.asp
www.mednavigator.net/
http://referat.svitonline.com/
32
meta-ukraine.com/WIN/rs/words.asp? 2002-05
29
30
31
33
SECTION 3
NETWORKED SOCIETY
ICT in Everyday Life
Internet access among users, 2002
though PCs in other place
(Internet café, friends, libraries)
through PCs at work
through PCs at home
through PCs at school or university
through a mobile and personal organiser
(notebook)
Internet Penetration and Usage
A
ccording to data collected by the Ukrainian Marketing
Group, the country’s 275,000-327,000 computers
owned by private users are used by an average of two persons per household. Private PCs are used for e-mailing,
web-surfing and text-processing, as well as for games. PCs
are also used for professional activities: programming,
database creation and web-design33.
There were some interesting results concerning computer literacy and Internet usage by the Ukrainian population. A question about the level of computer literacy was
asked in a survey conducted by the Institute of Sociology,
March 200234. (See also p. 30)
44%
42%
21%
2%
<1%
Source: Taylor, Nelson, Sofres: Ukraine in the regular Omnibus Survey, March
2002. Total is greater than 100% because of multiple responses.
What is your level of
computer literacy?
under 30 age 30-54 over 55
ICT in the Workplace
computer illiterate
can use PC and use
it often
constantly use PC
at work
Public Sector
Do you use the Internet? under 30 age 30-54 over 55
There are about 279,000 public servants in Ukraine. Public
institutions have 150,000 PCs, so the proportion of public
service equipped with available PCs is around 54%.
•
•
I don’t need it
I need it but I don’t have
the possibility
I use it at home
I use it at work
I use Internet cafés/
computer clubs, etc.
PC distribution is very uneven. Employees of the
National Bank are completely equipped with PCs;
there is a high level of PC equipment –over 80%– in
the Secretariats of the Cabinet of Ministers,
Verkhovna Rada, the Ministry of the Interior, the
State Tax Administration and in other ministries and
institutions. At the same time, the supply of PCs in
local and oblast administrations and in some public
institutions is far below the demand for them.
57%
80%
97%
31%
13%
1%
8%
5%
0.5%
68%
80%
98%
22%
2%
6%
17%
1%
3%
2%
0.2%
0.4%
5%
0.5%
0.5%
•
The banking system, including enterprises that provide different financial services, is 100% equipped
with modern personal computers. The majority of
private enterprises, particularly SMEs, are highly
equipped with PCs: almost every company has at
least one PC for accounting, regular operations and
business correspondence. Large enterprises, which
tend to still be state-run, as a rule, have a relatively
low number of PCs.
•
The business sector outside banks and financial
services is characterized by low PC use for production and enterprise management.
Many computers are outdated. 286/386 models and
others comprise an estimated 30% of all computers
in public institutions.
Private Sector
More and more Ukrainian enterprises are on-line. According to MediaCom, if two years ago there was hardly a single SME corporate website, today almost everyone is on
the Internet. There are several reasons for establishing a
website, including simply having an Internet presence,
landmarking the site for future business promotion, and
the desire to use the current capacities of the Internet.
According to a survey conducted by UMG, in June
200136 there were more than 600,000 corporate users in
Ukraine and over 110,000 companies. Some 6,000 use
leased lines, covering more than 111,000 users, and
102,115 companies use a dial-up connection.
The presence and distribution of PCs in Ukraine is
quite a mixed picture:
The Internet services market in Ukraine, UMG. June, 2001
www.cebit.Kyiv.ua/conferences/internet/reports.html
34
Ukrainian society: from election to election. Institute of Sociology. Kyiv. 2002
33
34
35
36
meta-ukraine.com/WIN/rs/subj.asp?2002-05
The Internet services market in Ukraine, UMG. June 2001.
www.cebit.Kyiv.ua/index
SECTION 4:
NETWORKED
ECONOMY
Despite a confusing and often
contradictory legislative environment,
the ICT sector is now developing very
rapidly in Ukraine. In 2000, the
telecommunications share of GNP was
4.2%. At the end of 2001, the number
of Internet users in Ukraine ranged,
according to different unverified
estimates, from 1,200,000 to
1,570,000. Another 500,000 people
used the Internet from time to time.
The number of mobile Internet or
WAP users is estimated at 50,000
and is growing steadily.
SECTION 4
NETWORKED ECONOMY
A NOTE ON DATA
Despite a confusing and often contradictory legislative environment, the ICT sector is now developing very rapidly in Ukraine.
In 2000, the telecommunications share of GNP was 4.2%. At
the end of 2001, the number of Internet users in Ukraine
ranged, according to different unverified estimates, from
1,200,000 to 1,570,000. Another 500,000 people used the
Internet from time to time. The number of mobile Internet or
WAP users is estimated at 50,000 and is growing steadily.
Several sources for economic data exist in Ukraine, including DerzhKomStat or the state statistics committee, the National Bank of Ukraine, UkrTelecom and private companies. In
addition, a number of surveys have been conducted on the
strength of the IT sector and independent publications have
reported useful data. Among them is “High-Tech Navigator,”
published by SoftPress Publishing House in cooperation with
AVentures and Euroindex, two Ukrainian IT firms –a must-read
for those interested in this sector. Numerical data appears in
range format when more than one source is used.
80 people and individual professionals providing services
to both domestic and foreign markets who have not registered themselves as a company. Some domestic specialists
also produce software for their company’s internal use.
Problems of salary scale and differences between private and public sectors are common in Ukraine as they are
in many other countries. These differences create a vicious
cycle where labour prefers employment in the private sector, leaving public institutions behind in terms of available
skills quality and quantity, while public sector employees
scramble to augment their salaries with additional –and
better-paid– activities. A review of the salary scales may be
in order to examine and compensate for this trend.
Workforce at a Glance
1. About 50,000 people are employed by the software
development sector.
2. About 15,000 graduate each year with IT as a component of their universities studies;
ICT Employment Opportunities
3. 1,600 graduate with bachelor’s, specialist’s or master’s degrees in IT;
Labour
4. 1,000 students graduate with advanced programming studies qualifications.
A
ccording to the Ukrainian Association of Software Producers, UASP, there are over 800 companies in Ukraine,
that is, legal entities with business activity connected with
the development, production and distribution of software
products and databases, and also with the creation of the
infrastructure necessary for their existence and development: investment, communication, and personnel. In
addition to this, an uncertain number –5,000-7,000 according to UASP data– of temporary groups ranging from 2 to
Figures for other areas may be considerably lower.
average net monthly salary
developers
senior developers
testers
Quality Assurance
managers
project managers
architecture consultants
350-450
500-800
250-350
700-1,000
800-1,200
1,000-1,800
Source: UASP
Unemployment in ITC sector
Total registered unemployed
information and computer services
Total estimated workforce demand
information and computer services
Average total load per job (people/job)
information and computer services
Source: Ministry of Labor and Social Policy, State Employment Centre
36
Unemployment in the ICT Sector
From 1999-2000, there was an observable decrease of registered unemployment both in the economy as a whole,
and in the IT and computer sectors in particular. In 2000,
the number of unemployed in these industries fell by
10.5%, while job offers increased 2.4 times, reducing the
ratio of applicants per job from 44 to 16.
Areas of Specialization Among Programmers
Sample IT compensation in Kyiv, USD
position
Source: Ukrainian Association of Software Developers
There are approximately 50,000 software programmers in
Ukraine. The main programming languages and application development tools they use are C/C++, Java, Java
Script, VB Script, Delphi, CA Visual Objectives, Objective
C, Perl, SQL, Fox Pro, HTML, Macromedia Dreamweaver,
Visual Basic, Visual C++, Developer 2000, Power Builder,
and Home Site. The Internet technologies they apply in
their work include: PHP3, CGI, ColdFusion, XML,
DHTML, VRML, Flash, Shockwave, ActiveX, Java Beans,
MS Internet Site Server, and Apache Web Server. The DBMS
and Database tools used include: DB/2, Informix, MS
Access, Oracle, ODBC, JDBC, MS SQL Server, and My SQL.
Source: UASWD
1999
2000
1,205,000
1,900
51,000
44
24
44
1,188,000
1,700
68,000
106
17
16
SECTION 4
Volume of ICT work by type, 1999
1
2
3
4
5
6
7
8
9
10
11
IT Consulting
software development
data processing
databases
technical service, maintenance of office equipment
technical service, maintenance of computer equipment
assembling PC, supplying components, accessories,
peripherals
servicing computer networks, mobile/paging
communications
R&D in computerization
education, training and re-training of IT specialists
other activities
NETWORKED ECONOMY
Harmonization of national legislation with the requirements of the GATT/WTO system. Significant changes have
taken place with regards to improving the business environment, covering nearly all sensitive areas of foreign-economic relations. On the telecommunications front,
DerzhKomZviazok transformed its International Relations
group into the International Relations and European
Integration Department.
Sec. 13 of the Programme of Integration of Ukraine
into EC highlights the integration requirements and
specifically addresses ICT issues. Among the important
medium-term priorities for 2002-2003 are:
•
To undertake efforts to approximate current and
develop new legislative acts on information and
communications according to EU requirements.
•
To cooperate with the administrations of EU member-states and apply their experience with EU
requirements on communications and computerization in approximating and implementing legislation, regulatory and technical acts.
•
To ensure informational and analytical support in
the process of integrating the communications
industry, including the accumulation, translation
and study of organizational documents of the EU
on telecommunications policy, such as guidelines,
resolutions and recommendations of the IS General
Directorate of EC; to publish methodological materials on the key areas of this process.
•
To organize the participation of Ukrainian organizations in EU competitions for projects under the
Information Society Technologies program and to
sign related agreements with the EC.
•
To engage in cooperation those organizations which
have experience working within EC projects under the
Telematica, ACTS or Advanced Communications Technologies and Services, ESPRIT, and other programs.
•
To develop and implement joint international projects.
•
To organize joint research of opportunities to use
up-to-date technologies and software, and the technical means to support the development of e-commerce in Ukraine.
•
To strategize and form the basis for state policy to
support the Ukrainian segment of the Internet, and
to facilitate the spread of comprehensive and reliable information about Ukraine.
•
To create conditions for entering the global information system and to facilitate the access of individuals and legal entities to such resources.
ICT Market and Trade
D
irect foreign investments into Ukrainian enterprises
that focus on software production amounted to
$7,615,900 at the beginning of 2001. 1,193 enterprises submitted accounting statistics for their software production.
Integration With the EU and WTO Accession
The Ministry of Economy and European Integration is
implementing the requirements of the Secretariat of the
Interdepartmental Commission on Ukraine’s joining the
World Trade Organization. The Ministry’s efforts in 20002001 resulted in the implementation of the Schedule of
A software success story
Softline, a Ukrainian software developer, started out as a
team of 8 several years ago. Today the company has 300
people in Kyiv and is rapidly expanding in other cities.
Softline offers a diverse array of development services,
including financial applications such as budget workflow
tools, financial analysis, data warehousing, portals, and so
on. Softline has implemented a Forex system, Ameritradestyle, based on Oracle, and a stock exchange system. Another project involved addressing public sector needs with an
intranet for the State Employment Centre. The government
is a key customer, with 30% of revenues coming from the
Ministry of Labour, the Cabinet of Ministers, and Air Traffic
Control. This year, a major off-shore investment fund
bought into the company.
37
SECTION 4
NETWORKED ECONOMY
Regional piracy rates
CIS countries
retail piracy
software revenues lost, USD ’000*
1996
1997
1998
1999
2000
2001
95%
$49,469
92%
$44,276
93%
$47,477
90%
$43,520
89%
$29,700
87%
$58,434
Source: www.bsa.org/resources/2002-06-10.130.pdf
Chambers of Commerce On-line
The Ukrainian Chamber of Commerce and Industry has a very useful website at www.ucci.org.ua. The UCC
offers several services including:
•
helping Ukrainian and foreign companies find partners and establishing different forms of business;
•
foreign commerce consultations;
•
engaging Ukrainian businesses in conferences,
forums and seminars abroad.
•
inviting and receiving foreign business delegations
and individual business representatives in Ukraine;
•
arranging business conferences, forums and seminars in Ukraine on issues of international commercial cooperation;
•
arranging business meetings and talks between
Ukrainian entrepreneurs and their foreign counterparts on issues of cooperation;
•
organizing the presentation of foreign companies
in Ukraine;
•
organizing trade missions for Ukrainian entrepreneurs abroad.
The European Business Association, a memberbased organization, is very active in lobbying tax, registration certification and other issues that affect business in
Ukraine. It has an open website at www.eba.com.ua.
The American Chamber of Commerce, a memberbased organization, has a mainly member-only website,
with some generic information at www.amcham.Kyiv.ua.
The Canadian Business Club meets monthly at the
Embassy, but has no Internet presence at this time.
Software Market
Global piracy
sample countries*
piracy
US
Australia
Poland
Philippines
India
Ukraine
Russia
China
25%
27%
53%
63%
63%
87%
88%
94%
Source: Softjourn
* Etimates of lost revenues may not take into account real consumer buying power
and may actually be higher in wealthier countries.
countries. Apart from robbing the software industry of
revenues, it also reduces the capacity and interest of local
software developers to go to market with their offerings,
which stifles the market even further. Piracy also affects
other fields, from mobile communication to satellite TV,
to videotapes and music and DVD production. Fortunately, there is a very gradual but steady downward trend in
recent years.
Service Exports
DerzhKomStat provides official data on the volume of
export services connected with software production. Since
the transmission of information abroad through the
Internet is not regulated by law as a “transfer of intellectual property” and does not require specific registration
with customs and tax authorities, real exports of software
development services may be much higher than officially
stated. There are estimates, made public by UASPD and
published by the Russian website www.cnews.ru, that the
export of software design services from Ukraine in 2001
exceeded $20 million.
The size of a typical Ukrainian company engaged in
software development is 15-25 employees, with typical
annual revenues in domestic operations running $120180,000. Typical annual revenues for international services are $300-400,000. The hourly rate for time-and-materials-types of contracts are typically $9-25, depending on
company experience and reliability.
A
ccording to a UASP evaluation, the volume of software
and related services produced by private Ukrainian
companies in 2000 was worth $57-65 million. This figure
covers both domestic and export markets, with the export
component $32-37 million. The volume of licensed software sold in Ukraine by international companies or their
distributors was $13 million in 2000.
Piracy
Piracy is a very serious problem in Ukraine and other CIS
38
Volumes of software service exports
1998
1999
2000
USD
firms
2,434,600
2,384,200
3,165,800
56
38
45
[See also Appendix A pp. 59-60]
SECTION 4
NETWORKED ECONOMY
Computer services transfer, USD millions
1999
Export of computer services
share of total export
share of previous year
Import
share of total import
share of previous year
Balance
For reference:
Total export of services
Total import of services
2000
3.9
2001
5.9
0.1%
89%
7.6
0.2%
153%
11.7
0.2%
128%
13.3
1.0%
61%
17.3
1.0%
114%
-7.8%
1.5%
130%
-7.4%
3,613.9
1,113.2
-9.6%
3,486.8
1,360.8
3,544.7
1,148.4
Source: DerzhKomStat
Largest trading partners in computer services, USD millions
Total
Australia
Austria
Belgium
Germany
Latvia
Russian Federation
Switzerland
United Kingdom
United States of America
export
1999
import
balance (+/-)
export
2001
import
balance (+/-)
3.90
0.30
0.40
0.02
1.00
0.01
0.30
0.20
0.01
0.60
11.7
0.6
0.8
2.2
0.2
1.5
0.4
1.8
0.8
-7.8
0.3
-0.2
-0.8
-1.2
-0.2
-1.2
-0.3
-1.8
-0.2
5.50
0.20
0.10
0.20
1.30
0.01
0.30
0.10
0.20
1.50
11.6
0.4
0.3
3.5
0.4
0.5
0.1
4.4
0.9
-6.1
0.2
-0.3
-0.2
-2.2
-0.4
-0.2
0.0
-4.3
0.6
Source: DerzhKomStat
Types of computer services transfer and Trends in computer services transfer... see Appendix A pp. 59- 60
Computer Market
Dynamics of computer services transfer, 1995-2001
V
arious sources report that 370,000 to 400,000 personal computers were sold in the Ukrainian market, an
annual growth rate of 17-22%. This includes annual notebook sales of about 10,000 units. These figures can be confirmed against the number of monitors sold in Ukraine,
which was 360,000-390,000 units. This correlates with
data provided by Samsung, the leader in monitor sales in
Ukraine, with a market share of 40-50%, given that some
buyers of computers have existing monitors that they do
not replace.
The largest portion of PC sales is shared among BMS,
E-service, ICS, Inkom, K-trade, Kvazar-Micro, and Versia.
Electronic Commerce
IT companies by specialization
services
E
-commerce in Ukraine is still in its infancy and has not
yet achieved the critical mass necessary to “pull” the
market towards it. Although it has many benefits compared to regular commerce –wide access, low start-up and
operating costs, automated sales processes, high payback,
equal opportunities for businesss in both the capital and
the provinces–, and though the number of Internet shops
is growing quickly, they do not earn enough significant
profits for their owners, compared to conventional business or similar businesses abroad.
creating/supporting accounting systems
developing Web pages/products/technologies
creating software by outsourcing, developing
new technical products
delivering/installing/supporting complex ERP
systems, including workflow
developing/installing/supporting ERP systems
creating industrial/consumer/legislative
databases
share
40%
40%
35%
15%
4-6%
2-3%
39
SECTION 4
Delovaya Stolitsa, a Kyiv weekly paper, Nº24, 17.06.2002
ISPs Wait for Their First Million
A turning point
By A. Kuzmenko ©
In 2001, the estimated volume of the Ukrainian Internet
advertising market was about $500,000. Compared to 2000,
this reflected a growth of 100%. The dynamics of the first
months of 2002 show that growth rates this year are higher
and the $1 million benchmark will certainly be exceeded.
The Ukrainian Internet advertising market is maturing.
More and more Ukrainian companies either already use the
Internet for advertising, or are studing the possibilities of
attracting new clients and increasing brand awareness
through the Web.
“Last year was a turning point. It’s easier to negotiate with
clients now,” says Nelia Chernyshuk, sales director for Mediacom, an Internet advertising agency. “Practically all large companies have their own high-quality websites and they’re carefully studying us. They’re clearly interested in promoting their services on the Internet.”
One can add to this a long list of large international companies that have started to incorporate Internet advertising in
their Ukrainian budgets: Coca-Cola, Renault, BMW, Reemstma,
Nestle, Oriflame and others. The potential audience for
Internet advertising is also growing. «Spylog-Ukraine» reports
that today there are around 2 million Internet users nationwide and it’s been growing very year by over 150%. By the end
of this year, it may well reach 4-5 million users. Other experts
may not be quite as optimistic, but even they expect 3.5-4 million users by the end of 2002.
The reasons for this are several: the lack of payment
systems and legislation; mistrust or ignorance of e-commerce opportunities among large and medium businesses;
a lack of intermediaries and specialists in this sphere; low
numbers of Internet users in Ukraine; and insufficient
trust on the part of potential buyers.
Policy
Several legislative acts, rarely enforced and with varying
degrees of practical significance, govern the area of e-commerce in Ukraine:
•
on electronic documents and electronic workflow;
•
on digital signatures;
•
on national informational resources;
•
on protection of personal data;
•
on control over information security in data transmission networks.
NETWORKED ECONOMY
April, according to DerzhKomStat, as reported in
Ukrainian News. Mobile communications services made
up 21.3% of total sector revenues. The number of mobile
communications subscribers rose by 3.6%, to 2.74 million
in May. According to the adjusted data of DerzhKomStat,
in April the incomes of mobile communications operators
totalled UAH 171.2 million, a decrease of 5.6% over
March, rather than an increase by 83.2% to UAH 332.1
million. In 2001, the revenues of mobile operators totalled
UAH 2.02 billion, of that UAH 973.3 million for JanuaryMay.
Advertising
Web-based advertisements, although still small, is doubling in size every year.
B2C
T
he main B2B activity in Ukraine today is publishing
on-line information related to specific goods and services. Businesses do not yet see e-commerce as their priority, as cost-savings are limited and other areas of business,
such as the automation of accounting, personnel, inventory management and so on, are more pressing.
From the customer’s perspective, Ukraine –like most of
Eastern Europe– has no historical tradition of mail-order
shopping, so there is no natural move among consumers
from hard-copy to the Internet as many other countries
have. Most people still prefer personal interaction in buying and selling. In addition, payment systems do not yet
support on-line businesses and many companies do not
want to post their offerings and prices on the Internet for
fear of disclosing sensitive information either to the competition or to the tax office. However, several B2C sites
exist and a sample is shown in Section 3.
The best-known Ukrainian system of Internet commerce is the Centre INT-Commerce or CIC at www.int-
Leaders in cards issued
Internet
On the communication side, IP telephony services make
up about 1-1.5% of the international calls market in Ukraine, worth $7-12,000,000 per year. According to surveys
conducted by Utel, 110 operators provide IP telephony
services in Ukraine today.
Wireless
The incomes of mobile communications operators totalled
UAH 186 million in May 2002, an increase of 8.7% over
40
* the former state industrial investment bank
† known as PUMB in Ukrainian
** the state savings bank
SECTION 4
NETWORKED ECONOMY
ATM dynamics, Q1 2002
cash dispensers
pay terminals
increase
% change
total
domestic
international
133
285
7%
2%
1,779
13,250
330
791
1,492
12,499
Cards issued in Ukraine, Q1 2002
increase
% change
total
8.0%
32.0%
1,082,000
2,970,000
1,724,000
1,179,000
67,000
4,052,000
Physical Support Infrastructure
domestic
international
VISA
Europay
other
total
81,000
720,000
801,000
19.7
commerce.com. Only bank-registered credit cards holders
are allowed to use this payment system and although the
CIC project has been operating for quite a long-time, it
still has the status of a pilot project.
Today e-shops like Bambook, which sells books, periodicals and CDs, Dukat, which provides office supplies
and equipment, and Likon, which carries contact lenses,
are part of the CIC system. Consumers can also subscribe
to periodicals at Ukrposhta on-line, using the same system. The only client bank on the system is Aval.
PrivatBank has announced its own system of on-line payments through Visa and EuroCard/MasterCard. Any holder of these cards can apparently use it pay for goods and
services within the country.
International Card Payment Systems
According to the National Bank of Ukraine, at the end of
Q1 2002, 61 banks or 32% of all commercial banks of
Ukraine were members of domestic and international payment systems and issue payment cards, both debit and
ATM. 31 banks directly participate in the payment systems.
B2B
T
oo many components are still not in place to create an
effective B2B environment, such as agencies to handle
Certificates of Authority and Internet Digital Signatures.
Some IT-related industries do carry out goods and services
transactions using Internet applications, but payments are
still carried out by conventional means.
Kvazar-Micro, a Kyiv-based computer company, has
designed its own B2B system: any company which wants to
become a KM partner registers with its website, after which
it can place orders, secure stock and transact electronically
with the timely delivery of goods. Despite the absence of
COAs, all the transactions are secured by a proprietary certification system called KM e-business. This novel approach
has won recognition from the European headquarters of
Intel, the international chip maker.
Transport
D
omestic parcel delivery is largely supported by
Ukrposhta. International express couriers such as UPS,
DHL, and FedEx have also operated in Ukraine for many
yearas. In addition, the country has a well-developed, if illmaintained road and railroad infrastructure, with connections to major European, Russian and CIS cities. The
Ukrainian airline system has domestic connections to all
major centres, and international connections to major
European cities, neighbouring countries and the US. The
cost of transportation is low domestically, but tends to be
above European averages for international shipments.
Postal Service
UkrPoshta, the post office, at www.poshta.Kyiv.ua, is
100% government-owned. It has been diversifying its
Internet services, offering free e-mail from a user-friendly
website. However, a list of Internet-based services and fees
was not available.
Customs
Customs has an automated system of cargo control and
payment integrated via communications system including
satellite communications, with all border and customs
checkpoints.
IT Parks
I
T parks are at the initial stages of development because
of a lack of capital and organizational structures. In
Kharkiv in May 2002, a conference was convened to establish parks as separate economic zones and seven protocols
of intent were signed there. However, outside small groups
and public initiatives, the business model of western-style
techno-parks does not yet exist in Ukraine. One the reason
is the limited amounts of venture capital.
UkrInfoTechs is a techno-park for IT and telecom-related applications. It is a government-oriented consortium of
companies established by presidential decree.
Start-up Support
Because Ukraine has not yet developed a formal system to
help bring ideas to the market, support for start-ups is very
limited and informal. This limits private R&D in software
and hardware innovation markets and relegates the country to working mainly with technology from abroad,
rather than producing its own.
41
SECTION 4
NETWORKED ECONOMY
The Ysea Techno-park
www.spea.lviv.ua/tehnopark/index_eng.html
T
he science-based technological park called YSEA
Techno-Park is one of the first regional R&D associations in Ukraine, created for the intensive development and implementation of advanced technologies.
The park was established with the assistance and support of the L’viv Regional State Administration, L’viv
Polytechnical University, the Western Scientific Centre
of the National Academy of Sciences, the Research
Assistance Foundation, Halytski Investitsiyi, an investment company, and other foundations.
According to their website, the main goal of the science-based technological park’s is the promotion of innovation through the creation of modern high technologies, the incorporation of high-tech into industrial SMEs,
and the establishment of attractive conditions for the
transfer of technology. This could become a basic factor
in spurring competition and ensuring sustainable social
and economic development in Ukraine. The incorporation of high-tech into industrial SMEs will allow:
Venture Capital
There is a formal but stagnating seed and reseed market.
An estimated $1 billion has been invested in the last 10
years, about a quarter of total investments in Ukraine.
Today, it is difficult to find financial resources for venture
capital enterprises. In Ukraine, IPOs exist even if the stock
market is quite weak.
Six venture capital companies are investing in the
country at the moment: AVentures, Commercial Capital
Enterprises, Euroventures, ING Barings Vostock Fund, the
Western NIS Enterprise Fund and US-based SigmaBleyzer.
Investments peaked in 1999-2000.
Specifically in the field of IT, these investors have completed only six deals. Among them, SigmaBleyzer closed
two in offshore software development, one cable company, and an ISP called P5 that is now out of business.
Barings Vostock invested in Golden Telecom, and has
done well, with 88% ROI upon exit.
In total, it is estimated that about $30-35 million is
still available in total investments in all sectors in
Ukraine today. A website published at
www.necin.com.ua/engl/Finance/technopark_group.htm
mentions investments institution by type.
Equity Market
There are only a few examples of IPOs in Ukraine, and
none involving IT companies. The retail equity market is
non-existent as the stock market is limited to blue chip,
professional traders because of the costs involved.
Tax Environment
There are no specific tax incentives or other facilitations
for the IT industry.
42
•
the development of key industrial technologies;
•
the development of infrastructures for sciencebased technological parks to accelerate the
growth of high-tech industry;
•
the integration and mobilization of R&D
resources to achieve synergistic effects;
•
the implementation of the R&D Industrial
Information Infrastructure program;
•
sustainable social and economic development;
•
international cooperation in R&D and technology transfers;
•
conditions for broad-based scientific-technological education.
Financial Infrastructure
T
he Interbank payment system is well developed in
Ukraine and interbank transactions are conducted
almost exclusively through electronic applications. However, Internet gateways and e-commerce-ready applications that encourage B2B transactions have not yet been
developed. Among these are key systems such as Internetbased digital signatures, certificates of authority, encryption and so on. This deficiency is slowing down the development of e-commerce services.
Electronic Inter-Bank Payment System
Ukraine’s political orientation in the early 1990s was
towards the formation of a free market economy. This
resulted in drastic changes in the country’s banking sector.
The commercialisation of state-owned banks, the formation of a number of new commercial banks, and an everincreasing number of businesses contributed to strong
public interest in an automated payments system. It was
expected that such a system would speed up bank settlements, as well as increase their reliability and security.
Every day of delay in the creation of such a system resulted in significant losses both to the state and to businesses,
due to rising inflation, delays in settlements, and the use
of fraudulent payment documents.
Given the insufficient level of computerization in
Ukraine, this system could not be developed “from the bottom up”, that is, by means of a gradual voluntary merger of
individual banks’ electronic settlements into a unified system. The National Bank of Ukraine had to impose both its
strategy and its technology on commercial banks, in order to
ensure the creation of an electronic interbank payment system. At the same time, it had to consider the full range of
financial capacities of the banks and the skill levels of their
SECTION 4
NETWORKED ECONOMY
Internet Incubators
Who created i-Nest
www.i-nest.com.ua
i-Nest is one of the first Internet incubators in Ukraine
set up to “nurture” Internet projects.
i-Nest is the brainchild of Euroindex, a Kyiv-based marketing company known for organizing some of
Ukraine’s largest trade shows –such as EnterEX for IT
and REX for advertising and marketing–, for holding
Internet advertising competitions, publishing Office
magazine, and other projects.
Why i-Nest is needed
Who helps i-Nest
Very often, developers of a promising Internet project
lack sufficient funds to implement it. It is impossible for
novices to launch projects on their own: they have to
pay for design, programming and initial promotion. In
addition to the lack of money, they often lack of professional knowledge in marketing, logistics, finances,
and business planning. Moreover, there is a need for
technical, legal and accounting support. The Internet
Incubator provides all of this.
The First Tuesday Kyiv Team
O. Drozdovich, patent attorney
The Agency of Commercial Graphics
Actis/Armitage Web Agency
i-Nest
What i-Nest wants
i-Nest’s mission is to help beginning Internet entrepreneurs get fast commercial results and competitive
advantages, and gain experience in management and
marketing. i-Nest’s mission is to contribute to the development of promising projects which could provide
services and contribute to the development of the
Ukrainian segment of the Internet as a whole.
What interests i-Nest
To interest i-Nest, a project should be concrete, easily
implemented, and at least potentially profitable. i-Nest
is interested in vertical or specialized projects devoted
to specific existing industries. At this time, i-Nest has
three active projects in its portfolio.
What doesn’t interest i-Nest
- global “superprojects” on a national scale;
- projects that rely on banner advertising;
- projects from authors who cannot work in a team.
How to contact i-Nest
Send a message to [email protected].
What i-Nest does not want
i-Nest is interested in long-term development, not
Internet speculation. It provides new Internet businesses with not only start-up support, but also long-term
support, to insure they can compete and survive in
today’s economic conditions.
What i-Nest has going
www.whoiswho.com.ua
A directory of Ukrainian state bodies and officials.
www.all-hotels.com.ua
An on-line hotel booking service
How i-Nest works
i-Nest accepts and evaluates applications from the
authors of promising projects. If i-Nest is interested,
cooperation will be offered and the financial and legal
conditions of further work are negotiated.
www.chicken.Kiev.ua
An on-line guide to Kyiv restaurants with on-line reservation. Winner of Web Project 2000, a national competition, as “Best Internet business.”
A history of the Electronic Inter-Bank Payment System
January 1993
NBU board and senior management decide to develop EIPS.
August 1993
The first 5 Ukrainian banks begin participating in EIPS.
September 1993
Wide-scale linking of banks to EIPS begins.
January 1994
100% of Ukrainian banks are connected to EIPS.
January 1995
100% of Ukrainian banks use special hardware for encrypting payment instructions.
September 1995
100% of Ukrainian banks use digital signatures.
January 1996
EIPS changes to multicurrency mode with direct gateway to S.W.I.F.T.
January 1998
EIPS incorporates International Accounting Standards
March 2001
The new NBU Urgent Funds Transfer System starts up.
43
SECTION 4
staff, as well as its own limited access to funds. These realities
are reflected in the main features in the system today:
1) low costs in the system’s development, operation
and technical maintenance;
2) reliability and compatibility of system hardware
and software;
3) short terms of implementation;
4) operational simplicity of hardware, especially simplicity of applications for commercial banks;
5) short terms and low costs in training staff.
Online Banking
Almost all banks offer bank-to-consumer services for a fee.
This includes bank-related services such as on-line statements, electronic transactions, bill payment, and so on.
E-Government
T
he history of computerization efforts by various government institutions goes back to the early 1950s, but
there is no qualitative indication as to what use this equipment was put to.
The Verkhovna Rada, Ukraine’s legislature, has a powerful information database containing more than 100,000
different legal documents, from the Constitution to regulatory acts of the ministries and institutions, laws, presidential decrees, resolutions and instructions from the
Cabinet of Ministers and so on. This legislative information is updated on a daily basis, and it is in great demand.
Information services are provided through a website called
www.rada.kyiv.ua, which has around 3,000 visitors a day
browsing an average 20,000 legislative documents.
Source: Viktor Lysystskyi, Cabinet secretariat
There are a number of websites which provide useful
information about both national and regional government
agencies and activities. Some of these websites are available in the footnotes to Section 3.
44
NETWORKED ECONOMY
Central and regional computerization
government institution
Pension Fund
Ministry of Fuel and Energy
Secretariat of Verkhovna Rada
State Customs Service
State Treasury
Ministry of the Interior
Ministry of Transport
Ministry of Economy
and European Integration
State Property Fund
Ministry of Labor and Social Policy
State Tax Administration
Ministry of Health
Ministry of Foreign Affairs
Ministry of Emergencies
and Chornobyl
Ministry of Agrarian Policy
Ministry of Finance
Ministry of Education and Science
Ministry of Ecology
and Natural Resources
Ministry of Justice
Secretariat of the
Cabinet of Ministers
Chief Control
and Audit Department
Regional executive governments
Total
Source: V. Lysystskyi, Cabinet Secretariat
date
1994
1995
1995
1996
1996
1996
1996
computers
12,000
430
900
7,300
9,500
11,600
330
1996
1997
1998
1999
1999
1999
850
640
12,000
38,000
60
500
1999
2000
2000
2001
500
250
700
270
2002
2002-3
800
200
2002-3
600
-
1,070
1,950
100,450
SECTION 4
NETWORKED ECONOMY
E-Government milestones
date
action
Ukraine is a republic of the USSR
25 December 1951
First small electronic computing machine in Continental Europe is put into operation
in Kyiv.
Beginning of 1960s
The development and introduction of automated production management systems begins.
1960s to1991
An estimated 120,000-140,000 specialists worked in the soviet IT sector.
1991
Ukraine becomes Independent
24 March 1992
A resolution is passed by the Presidium of Verkhovna Rada to develop bills on
computerization and data protection.
13 March 1995
A Presidential Decree is signed on establishment a National Agency on Informatisation.
04 February 1998
Two laws are passed: on the National IT Program and approving objectives of the
NIP for 1998-2000.
14 July 2000
A Presidential Decree is signed on improving the provision of data and analysis to
the President and Government bodies.
31 July 2000
A Presidential Decree is signed on activities to develop the national component
of the global Internet information network and ensuring wide access in Ukraine.
11 August 2000
A Cabinet Resolution is passed on setting up an Information Resource Centre
within the apparatus of the Cabinet of Ministers.
Beginning of 2001
The construction of a computer network at Government House begins, involving
2,400 workstations.
06 May 2001
A Cabinet Resolution calls for the approval of a program to computerize secondary
and rural school during 2001-2003.
21 August 2001
A Cabinet Instruction approves activities to implement in 2002 the General Directions
of Social Policy for 2004, envisaging the development of software for an automated data
and analysis system for allocating and paying pensions.
09 October 2001
A Presidential Decree calls for additional measures to ensure the development of
education, specifying the need to prioritize the computerization of education within
the framework of the NISP for 2002 and further.
04 January 2002
A Cabinet Resolution is passed on procedures for placing information about the activities
of the Executive on the Internet in order to improve conditions for the development
of democracy, support the Constitutional rights of citizens to participate in state
governance and to free access to information about the activities of the Executive and
its agents, and to ensure openness and transparency of such activities.
The resolution calls on the Cabinet Secretariat, MinEcon, DerzhKomZviazok, and the SBU
to facilitate the development and implementation of a unified web-portal for the Cabinet
of Ministers in order to integrate information resources that Executive bodies place
on the Internet.
45
SECTION 4
46
NETWORKED ECONOMY
SECTION 5:
NETWORK
POLICY
The process of developing an
information technology infrastructure
–“informatisation” in Ukrainian–
is covered by a number of laws and
resolutions.
These regulate the development and
implementation of the National
Information Systems Program,
determine parallel branch and
regional programs and projects
as its components, facilitate the
integration of these processes
at all levels, and determine the
mechanisms for interaction.
SECTION 5
NETWORK POLICY
National IS Program
T
he process of developing an information technology
infrastructure –“informatisation” in Ukrainian– is covered by a number of laws and resolutions:
1. The Law “On the National Information Systems
Program.”
2. The Law “On the approval of the Concept of the
National IS Program.”
3. Cabinet Resolution Nº1352 of 31.08.98 “On
approving of the Provision to develop and implement a National IS Program.”
4. Cabinet Resolution Nº644 of 12.04.2000 “On
approving the procedures for developing and
implementing a regional IS program and project.”
National Information Resource System
To integrate and support a systemic approach to the development efforts in this area, a concept to form a National
Information Resource System was developed. This contains the strategy for solving technological, organizational
and legal issues in establishing and operating the NIRS.
Financing the NISP
The law on approving NISP objectives for 1998-2000 was
adopted in 1998 and determined the major objectives, targeted state clients, and expected results. It called for a
three-year budget in the amount of UAH 71,761,000 or
about $35 mn in 1998 hryvnia. Today this budget is worth
only about $13.5 million. Insufficient financing is the main
reason for the failure of government clients to fulfill the
entire objectives of the NISP.
The NISP plan for 2002 focuses on implementing integrational objectives/projects in the IT sector. Priorities for
2002 include to:
5. Cabinet Resolution Nº1702 of 18.12.2001 “On
approving the procedures to develop and implement a branch IS program and project.”
1. improve organizational, legal and regulatory provisions to build an information society and introduce
electronic document circulation;
These regulate the development and implementation
of the National IS Program, determine parallel branch and
regional programs and projects as its components, facilitate the integration of these processes at all levels, and
determine the mechanisms for interaction.
2. develop current system for standardization in the
national information system;
Legal and Regulatory Support
A
ctivities implemented within the National IT Program
are aimed at developing regulatory and methodological documents; creating information and analytical systems and their components to support state government
functions, such as local computer networks, software and
technical systems, databases, and so on; and developing
and implementing information security systems.
3. create and develop integrated systems of data and
analytical support to government bodies. Priority
goes to the Administration, the Verkhovna Rada,
the Cabinet of Ministers, the National Security
Council, and the Ministries of Finance, Economy
and Defense;
4. create a WEB-portal for the Cabinet as an element
of e-government;
5. develop the Ukrainian segment of the Internet and
expand services provided in this market segment;
6. create a data and analysis system to support local
executive governments;
Standardization
Basic state standards and a system of state certification of
IT and information-telecommunication systems have
been developed within the framework of policy formulations and organizational-regulatory provisions for computerization and a concept for a unified state standards
system for documenting technological and software
designs and automated systems. A set of draft state standards for the IT sphere has been prepared.
7. develop a financial and monetary system, and
agencies to oversee state finances and the economy;
8. Improve data and analytical support to science,
education, culture and medicine.
Planned vs budgeted NISP funding
1998
1999
2000
2001
48
costs for NISP according
to the 1998-2000 law,
UAH ’000
15,000
29,880
27,900
-
allocations to NISP
in annual Budget,
UAH ’000
15,000
10,000
5,000
8,000
actual financing,
UAH ’000
0
300
4,835
4,284.2
SECTION 5
Policies and Coordination
The Government, with Decree Nº3 of January 4, 2002,
required all government institutions to provide information
on their activity in the Internet and even specified the nature
of the information to be provided. At the moment, there are
over 160 sites where government bodies provide information
on their activities and staff. A common portal with the
Cabinet of Ministers is to be launched by the end of 2002.
Coordinating Councils
The National IS Program for each subsequent year is to be
drafted by the Scientific-Technical Council of the National IS
Program. This council is a consultative body under the leadership of DerzhKomZviazok and it includes representatives
of government IT departments, scientists, and IT business.
Each Ministry or Oblast administration has an IT division in its structure, which is responsible for internal IT
development. This division reports to the deputy head of
each institution.
Budget Allocations
Modest though it is, there is a budget covering deployment of workplace IT solutions and workflow systems in
some of the oblast, state administrations and Ministries.
Although not in force yet, the Secretariat of the Cabinet of Ministers is introducing an integrated workflow
system funded by NISP 2002 in the amount of $300,000.
The pilot integrated info-support system is to be developed for the oblast state administrations at a total cost to
NISP for the year 2002 of about $400,000.
Telecommunications Regulation
A Brief History
P
rior to 1991, the Soviet Ministry of Telecommunication
directly manage regional telecommunication enterprises across the entire Soviet Union. In Ukraine, these services were administered by regional enterprises operating at
the oblast level. Once Ukraine became independent, it
took seven years to consolidate all state-owned oblast
enterprises into a national company, which took the name
of UkrTelecom.
The years between 1995, when the first Communication Law (see below) was drafted, and 1998, when
UkrTelecom was established, were very critical for the
development of telecommunication. This is because the
law introduced some amount of liberalization, at the same
time as there was no established national operator. As a
result, many small private operators emerged at the
national and regional level, and began competing with
state-owned provincial enterprises.
Typical business practices at that time included using
personal connections and bribes as the principal drivers to
success. Government efforts to establish UkrTelecom were
in essence intended to increase the effectiveness of the legacy it inherited from the Soviet system while, at the same
1
NETWORK POLICY
time, guaranteeing services and paving the road to eventual privatization, a process that is currently in progress.
Today, UkrTelecom has 85% of the market of fixed
local telecommunication, 95% of long distance and,
together with its subsidiary, Utel, 92% of conventional
international telephony .
1
Regulating Bodies
DerzhKomZviazok is the de facto regulator of communication, which includes telecommunication and post, in
Ukraine today. The Committee reports directly to the Cabinet of Ministers and the President. The first vice premier
has supervisory functions over the Committee, which has
the functionality of a Ministry of Post and Telecommunications:
•
licensing,
•
tariff regulations,
•
frequency spectrum management,
•
telephone number management,
•
policy-making and preparation of draft laws,
•
management of public shares in state-owned communication companies;
•
relations with international bodies, international
regulations and Eurointegration;
•
drafting a budget and implementing NISP budget.
The State Commission for Radio Frequencies and Communication is responsible for coordinating ministerial
activities related to the management of the national
telecommunication system, managing RF distribution and
use, dealing with equipment compatibility, and so on. The
Commission, consisting of 23 commissioners from various
agencies, is the main advisory body to Government for
radio-based communications.
The Main RF Management Department is subordinated
to the Cabinet, and manages the use and distribution of
the RF spectrum. In addition, several other bodies have
varying roles in regulating the environment of telecommunication, broadcast, monopoly, and so on:
1. MinEcon: The Ministry of Economy and European
Integration participates in elaborating and implementing the national strategy for social and economic development, setting mechanisms for putting the strategy into effect, and improving the system of measures aimed at supporting economic
independence.
2. National Security & Defense Council: A coordinating body advising the President on national securi-
DerzhKomStat
49
SECTION 5
ty and defense. Includes the Interdepartmental
Commission on Information Policy and Security.
3. DerzhKomInform: The State Committee for Information Policy, Radio and Television Broadcasting
prepares in propositions that shape state policy in
the information and publishing sectors, promotes
their implementation, and handles the overall management in these domains, as well as interdepartmental coordination and functional regulation of
issues within its powers.
4. Special Telecommunications Systems and Information Protection Department of the NSDC: Implements state policy in regards to the protection of
state information resources in network data transfer, cryptographic and specialized data protection.
Also manages the state system of government communications.
5. National Radio and Television Council: In charge of
licensing radio and TV companies, formulates and
implements policy in this sector. An eight-members
body, four of whom are appointed by the president
and four by the Verkhovna Rada. The NRTC licenses cable and broadcast operators alike.
6. Anti-Monopoly Committee and the State Property
Fund: Since the communications sector is subject to
anti-monopoly control, the AMC regulates the monopoly position of certain operators. The SPF is in
charge of issues related to the privatization of
UkrTelecom, the national telecoms operator.
NETWORK POLICY
As is often the case, no single law distinctly defines the
terms “communications” and “general communications,”
setting the ground for ambiguous interpretation of many
provisions and leaving the issue of monopoly on communications services open.
To foster market reform, in 1992 Ukraine adopted the
Law limiting monopolism and banning unfair competition in business activities. Under this law, UkrTelecom, the
national communications operator, is regarded as a monopolist and its activity as subject to anti-monopoly regulations. With the state’s backing, however, UkrTelecom has
consistently won lawsuits and is essentially given carte
blanche to abuse its monopolist position.
Within the framework of the privatization programme,
the Law concerning the privatization of UkrTelecom was
adopted. It provides for 50%+1 share to remain state-owned,
bans changing the company’s profile, and so on. Although
its privatization had been scheduled for 2001, it has not been
implemented. Today, a global recession and trouble in the
worldwide telecoms industry are not increasing the chances
of sale in the near future.
Licensing
A number of services in the IT sector are subject to licensing. The general validity period of a license is three years
and the cost of issuing the license is about $64 for:
•
developing, producing and trading in special technical devices for acquiring data from communications channels and other mechanisms of covert
information collection;
•
elaborating producing, using, operating, certification testing, researching, expertly evaluating, importing and exporting cryptosystems and tools for
cryptographic data protection; providing services in
cryptographic data protection; trading in cryptosystems and tools for cryptographic data protection;
•
elaborating, producing, applying, maintaining, providing services, researching systems and tools for
technical data protection;
7. Verkhovna Rada: As the legislature, it handles general policies and legislation.
Source: GIPI/Internews
Legislation
Ukraine has a number of communication laws that are in
the process of being reviewed. A comprehensive review of
Ukrainian laws is published at www.rada.gov.ua and
www.liga.ua. The principal laws are:
•
•
50
The 1995 Law on Communication (#160/95) performed an important function by putting an end to
the practice of non-payment of mass media for
broadcasting frequencies.
The 1992 Law on Communications (#160/92) prohibited granting exclusive rights for performing
any kind of activity in the communications sector
to enterprises, entities, establishments and organizations of all ownership forms, apart from activity
related to the protection of the state’s interests,
national security and defense. General communications are defines as a natural monopoly by the 2000
Law on Natural Monopolies (#1692).
Other activities have varying licensing fees and validity periods:
•
providing radio communication services using RF.
Such licenses are valid for a period of 10 years and
cost about $641;
•
providing telephone communications services,
except public administration institutions. Such licenses are valid for a period of 15 years and the maximum fee is about $65,000;
•
maintaining TV, radio and cable broadcasting networks within an industrial operation. Such licenses
are valid for a period of 5 years and their maximum
cost is about $190.
SECTION 5
NETWORK POLICY
Lacking a clear definition of the term “telephone communications,” Ukraine has run into constant problems
with companies providing IP telephony services, attributed by the Cabinet of Ministers to the telephone services
providers (see below). Consequently, they are charged
license fees, though current legislation does not define IP
telephony or license terms for its operators.
The 1995 Law on Communications brought into effect
the requirement for all technical devices and equipment
applied in networks for general use to be certified according to the standards of current standardization and certification legislation.
Despite bilateral intergovernment agreements with
Belarus, Armenia, Georgia, Kyrgyzstan, Moldova and
Russia on mutual recognition of certification, no mechanisms were put into effect. The certification waiting period is at least two months, which significantly hampers
import: within this time-span, the owner of a shipment
cannot use the product and is obliged to pay bonded
warehouses fees.
Source: GIPI/Internews
Should its privatization ever materialize, UkrTelecom’s
main selling point is its de facto monopoly over fixed-line
services. Although it has theoretically faced competition
in this sphere since 1992, the fact remains that
UkrTelecom presides over all but a tiny percentage of the
country’s local loop and national infrastructure. At the
end of 2001, it had installed 9.19 million main lines, 8.67
million of which were in service.
During 2001-2002 it moved to tighten its stranglehold
on the sector even further by taking full control of the
country’s second largest fixed line operator, Utel, after purchasing stakes held by western operators, AT&T and
Deutsche Telekom, and BrokBiznesBank, a local bank. The
move was viewed by many as a bid by UkrTelecom to
make itself more attractive to foreign investors.
Utel holds a 15-year license to offer long-distance and
international telephony, and since 1992 has been
installing a national digital backbone. It has two international exchanges, in Kyiv and L’viv, and has direct connections with more than 50 international telephony operators in 45 countries.
Source: www.citresearch.com/dee/dee/ukr_a.htm
Privatizing UkrTelecom
T
he partial privatization of UkrTelecom has long been
imminent, but has been repeatedly delayed since
December 1999 when, as a prerequisite to any sale, it was
transformed from a state enterprise into a joint stock
company. Following the latest postponement in 2001, the
divestment of 49% of UkrTelecom by the state is now
expected to take place sometime in late 20023.
UkrTelecom
UkrTelecom was, until the end of 2000, 100% publicly
owned. The company is in the process of a privatization
that will eventually include 51% state ownership and not
less than 26% investor ownership, allocated through open
tender. The privatization of UkrTelecom is the key to
restructuring the sector, as it will improve transparency
and put competition on an equal footing for all telecom
operators. As it stands now, although progress has been
made, it seems to be far from complete and there has been
considerable delay for a number of organizational, institutional, and political reasons. The privatization of
UkrTelecom will signify the first concrete step in bringing
together the much divided public and private telecom
operator communities in Ukraine.
Foreign Ownership
T
here are legal restrictions on foreign ownership of
telecommunication-related enterprises, including TV
and broadcast. Under Sec. 2, Art. 13, Para. 4 of the Law on
broadcasting, the statutory funds of any organization
involved in radio or television cannot include more than
30% foreign investment. All such ventures are under the
control of the NRTC.
Fixed Telephony
2
3
UMC
51%2
Utel
90%
Ukrainian Wave
24%
Infocom
51%
Telesystems of
Ukraine
9.9%
Telecominvest
26%
Universal Service
T
here are no requirements in the law or any other regulation for fixed-based operators to cover any specific
amount of territory. However, since UkrTelecom is the stateowned operator and has the de facto monopoly, the management of the company is addressing this issue in order to
remain viable and responsible to the needs of the country.
26% as of Nov. 5, 2002. 25% was sold to MTS of Russia.
At the time of publication, 2002 was drawing to a close, and the much-vaunted sale had not taken place. Word from the SPF was a sale might take place in 2003.
51
SECTION 5
Universal service was hence addressed solely by
UkrTelecom and today there is a penetration rate in rural
areas of 8 lines per 100 inhabitants, compared to the national average of 22 per 100. From the financial viewpoint, since
universal service is rarely profitable, the service is crossfinanced by subsidization coming from a percentage of
UkrTelecom’s and Utel’s international voice traffic revenues.
However, with the advent of IP telephony, the revenues
available to finance universal service have substantially
decreased, an estimated 20-25% in the last three years4.
In universal service, the system of cross-subsidizing
local telephony at the expense of long-distance, international, and other communications is increasingly losing its
efficiency because of intensified competition in the market and the advent of new technologies, in particular, IPtelephony.
Moreover, the system does not ensure any control over
the usage of surplus revenues from artificially-inflated
prices for certain services. In addition, accessibility of services achieved through underrated tariffs for local communications slows down network development, and this
A warning from the US Dept. of State
BRAMA, January 22, 2002, 9 am ET
INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL
SERVICE AND U.S. DEPARTMENT OF STATE, 2002. ALL
RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.
1. UkrTelecom is a state-owned corporation that administers the national wire-line infrastructure, including
72,000 pay phones A regular payphone in Ukraine is
used for local calls only. The payment is made either
with tokens or prepaid cards that are valid only in the
city of issue. To date, 44,000 existing payphones have
been upgraded to card phones. Prepaid cards are manufactured in Kyiv and in Odesa using imported elements.
2. To upgrade the national network of card phones to
international standards, UkrTelecom introduced a single
national prepaid phone card valid for local, long-distance, and international calls in 1999. So far, only
16,690 public phones have been upgraded to provide
local, long distance and international calls. Phone sets
are manufactured by a Ukrainian-Italian joint venture
located in the city of Khmelnitskiy.
Source: Hi-tech Panorama, August 2001
3. One of the main problems in developing the system of
public payphones is artificially low tariffs for local calls.
As most customers use public phones for local calls
only, prepaid cards of small nominations are unprofitable, because profit generated by local loop calls doesn’t cover the prepaid card’s production cost. In the
meantime, the growing market for mobile telecommunications is successfully competing with public payphones and limits investments in this industry subsector.
4. U.S. investors and equipment suppliers are urged to
exercise caution before concluding transactions in
Ukraine. Post suggests consulting the Country Commercial Guide available at: http: //www.usatrade.gov and
discussing prospective investments with Embassy staff,
the American Chamber of Commerce, accounting firms,
legal counsel and other sources.
52
NETWORK POLICY
makes communications services inaccessible not only for
the poorer groups and the rural population, but for consumers in large cities as well. There are many solutions to
this problem, all dependent on proper regulation, transparency and the privatization process.
Tariff Regulations
A 1990 Law on Prices and Price Setting and a 1994 Cabinet
Decree define the authority of the Government to regulate
certain prices, including telephony. The Decree states that
prices for basic telephony services are regulated by a clearcut mechanisms. Firstly, DerzhKomZviazok proposes to
the Government to adjust telephony rates. The proposal is
then sent to the Ministry of Economy for clearance, who
then sends it to the Cabinet of Ministers for final approval.
The tariffs thus set apply to all operators. However,
operators are using loopholes in current legislation to
establish special tariffs. As an example, private companies
introduced a minimum volume of consumption and established a fixed base for service according to the lines
existing per building.
Network unbundling procedures clearly affect local services, depending on the location, and this requires the process
to be adjusted accordingly. All prices are otherwise regulated
using a minimum and maximum range. Regulations on
prices for fixed based telephony affect all services.
The regulation actually establishes minimum and maximum tariffs in effect for all services. The regulation states
that the minimum tariff must be “not more than 20% less
than the maximum,” but “not lower than the cost of providing such services” (sic). The figures in the table represent
the maximum figures, used by both domestic providers,
UkrTelecom and Utel.
The existing tariff regulation aims at killing two birds
with one stone, i.e., achieving accessibility goals and fostering fair competition. Moreover, setting tariffs based on
the cost estimate is not grounded on any methodology, as
no detailed information about costs is available. The same
is true of cost estimates based on an “ideal” network.
Thus, tariffs turn out to be distorted, creating misleading incentives for market agents, which results in faults in
the functioning of the telecommunications sector, that is,
in relations among providers, and those between providers
and consumers.
Quality of Service
Items such as essential requirements, call completion rate
and scope of services are all defined and regulated. However, in the presence of a monopoly and lack of true convergence across networks, it is uncertain how these rule
truly apply to fixed-based operators who are only reaching
the customer in less than 20% of the market. Unbundling
local loop regulation practically affects only UkrTelecom,
as the only provider of local access.
QoS regulations exist also for wireless and for packetized traffic. Again, however, they affect only the “public”
network and do not necessarily influence private operators.
4
International Center for Policy Studies, ICPS
SECTION 5
NETWORK POLICY
IP Telephony
Wireless and Fixed Networks Interconnection
Internet telephony, or IP telephony, is in a regulatory
limbo. On the one hand, the Government states that IP
telephony is to be treated as a fixed telephony service,
when it is accessed through a fixed-wired installation, and
must be regulated accordingly. On the other hand, IP Telephony operators argue that, since it is based on data transmission, it should not be regulated at all. If it is entirely
mediated through computers, IP Telephony is not regulated at all, but, to date:
The development of the telecommunications sector is stifled for lack of transparent practices and regulations. This
sparks conflicts among providers and impedes the entry of
new market players. Existing practices do not foster fair
competition in the cellular market.
Specifically, key issues on interconnection with providers
of fixed telephone communication and local loops are not
transparent, leaving a perception of unfair practices in this
environment. Consumer rights protection and anti-monopoly laws should apply in this sector as they do in others.
•
There has been no Court decision on this matter as
no case has been yet been brought to Court.
•
The Cabinet of Ministers made a decision to issue IP
telephony licenses, but no such licenses have been
issued to date.
•
UkrTelecom is concerned about cross-subsidizing
small IP companies. They, in their turn, blame UkrTelecom for the tariff burden. Such mutual accusations have not been resolved so far.
Local Loop
Access to the telecom infrastructure by customers is covered by the Local Loop and LD Use regulations. The only
bases for refusing a customer connection are the lack of
technical facilities or the lack of registration for residential
users. Special regulations have been adopted for corporate
customers and are regulated by the Cabinet’s RF Management Department.
Source: Yelena Dregulyas, Kononov & Sozanowsky
Wireless Telephony
Satellite Internet Networks
T
P
he wireless segment is regulated by the RF Management Department for frequency spectrum allocation
purposes.
There are no mechanisms other than the market to regulate mobile tariffs. There was an attempt made by some
lawmakers in early 2002 to change legislation to prohibit
charging subscribers of mobile phones for incoming calls.
Today, nearly all tariff plans of operators of mobile telephony continue to charge for incoming calls, unless it is
within the provider’s own network. The move was obstructed by mobile operators, who feared such a change
would destroy investment possibilities for the sector.
ermits related to satellite-based access include a frequency permit, an operating license, and a custom clearance
permit. However, the frequency and operating permits
apply only to the transmitting station, not the receiving
one. Hence, some ISPs use satellite systems in simplex datareceiving mode and use land lines such has fiber to send
data to their access providers overseas. Satellite data transmission is otherwise not regulated. Voice for internal corporate service is legal, but it is illegal to resell voice services
to others, as this infringes on UkrTelecom’s monopoly, despite an anti-monopoly law being in effect.
Setting tariffs, USD
lines per building
1-2
3-9
10-19
20 or more
installation+connection
1,000
800
600
250
minimum service
package/month
deposit for international calls
50
40
30
20
200
150
100
100
Source: www.citiustele.com. Other operators offer similar tariffs.
Service charges, USD
service
line installation
local calls
long distance
international direct dial
residential
40.00
0.0039 / min
0.0192-0.0600 / min
0.257-2.448 / min
commercial
160.00
0.0062 / min
0.03-0.06 / min
0.257-2.448 / min
Source: STCI site
53
SECTION 5
Internet Regulations and Licensing
I
nternet data transmission is not regulated in Ukraine and
no license is required for data communication. This has
spurred the creation of several independent networks and
leased-line services. New legislation is expected following
a June 2000 Presidential Decree on the development of the
Ukrainian segment of the Internet, which should also
describe regulations for such areas as e-commerce and digital signatures.
Source: Yelena Dregulyas, Kononov & Sozanowsky
e-Commerce Law
There is no legislation yet in Ukraine addressing e-commerce issues, and so far, bills on e-documents, e-document
circulation, and e-signatures have not yet been adopted.
Today, e-documents are not recognized by the Ukrainian
system of finance and tax accountability, making e-commerce nearly impossible.
Despite this lack of legislation to regulate e-commerce,
up-to-date legislation regulating e-payments was adopted
in the Law on payment systems and money transfers in
2001. This law enables arrangement for and receipt of epayments. Consequently, enterprises and entrepreneurs are
entitled to use e-payment, but they must confirm the legitimacy of the payment, whether financial or tax accountability standard, by a hard copy of the contract or other document of the kind. Although this defeats the purpose of ecommerce, especially in B2B transactions, it is expected
that this issue will soon be addressed by specific legislation.
NETWORK POLICY
Policy and Security. The Commission has not issued a single document to date. The Decree also contains a number
of provisions requiring state institutions to prepare for the
Verkhovna Rada, bills providing for ISPs to license their
activities and keep logs of Internet traffic for six months.
Although the Decree has not been put into effect, the
Executive has been granted authority to apply tougher
control of ISP activity and to monitor data traffic.
In 2001, the Cabinet of Ministers adopted an Order on
the protection of state information resources in the information and telecommunications systems. As decreed by
the Order, the transfer of such resources is authorized
exclusively via switching nodes with a compliance certificate. Thus, an indirect form of licensing companies willing
to provide services involving the transfer of state information has been introduced.
Source: GIPI/Internews
Cryptography
In Ukraine, controls are being exercised over activities related to cryptography. A 1998 Presidential Decree approved regulations on the procedure for protecting data cryptographically. State policy in this sector is supposed to be shaped by
the National Security Council’s Department for Special
Telecommunications Systems and Information Protection.
Cryptosystems are subject to certification and can be imported only with this department’s consent. Cryptosystems are
automatically considered State property, although they can
also be owned privately by DSTSIP’s authority.
Source: GIPI/Internews
Other e-Services
Network Compatibility
Laws in the area of telemedicine, teleworking and other
Internet-mediated professional activities do not yet exist
in Ukraine.
The draft of a new Telecommunications Act provides a unified notion of services designated to “transmit, radiate and
receive signals, texts, sounds, moving and still images or the
transmission of other types of information such as voice
over IP data transmission, and services rendered through
telecoms facilities and operators.” It is, however, expected
that current TV and radio broadcast regulations will continue to operate and that telecom and IT regulations will merge.
Privacy and Data Protection
Despite the existence of databases containing personal
data, Ukraine does not boast any special legislation to safeguard this type of data against misuse. To protect their
rights and interests, Ukrainian citizens can only refer to
Art. 32 of the Constitution, which prohibits “collecting,
preserving, using and disseminating confidential information about an individual without their consent except in
cases defined by law and only in the interests of national
security, economic welfare and human rights.” At the
same time, there is a conflict among regulations that
determine an individual’s access to the data collected
about them. The Constitutional Court gave its interpretation in 1997, in Case Nº18/203-97, recommending that
Ukrainian legislation be adjusted to European standards in
terms of personal data protection.
The 1994 law on data protection in automated systems
defined the owner-user relations and general requirements
for data protection in similar systems. The law introduced
obligatory certification of systems processing state data.
As the result of long-drawn deliberations about protecting the national information space against outside
interventions, a Dec. 6, 2001 Presidential Decree established the Interdepartmental Commission on Information
54
Source: Yelena Dregulyas, Kononov & Sozanowsky
Copyright and Intellectual Property
In 2001, Ukraine adopted a revised edition of the Criminal
Code that contains a chapter entitled “Crimes related to
the use of electronic computers, systems and networks.”
The Code stipulates the responsibility for computers and
network attacks, unauthorized access to computer data,
and breaches of computer operation rules, as well as for
the violation of copyright.
In 2001, under the threat of US sanctions, a revised version of the Law on copyright recognized software programs and databases as subject to copyright regulations.
Rules and standards for modifying, decompiling and copying software programs and databases have also been established. The US nonetheless pursued action against the distribution of pirated CDs, eventually shutting down four
out of six domestic CD factories. This has undermined the
development of this technology in Ukraine.
US sanctions against Ukraine speeded up the adoption
SECTION 5
by the Cabinet of Ministers a concept of software legalization and measures against unauthorized use. The document includes provisions for measures to curb mass dissemination of illegal software and distinctly defines the
list of activities that qualify as copyright violations.
NETWORK POLICY
•
reducing individual income tax rates by reforming
the personal income tax regime;
•
indexing specific excise rates in the national currency;
•
improving mechanisms to impose revenue tax.
Source: GIPI/Internews
Legislation related to Intellectual Property generally
pertains to the filing of trademarks, the basic legal enactment of intellectual property in Ukraine. A section of the
High Tech Navigator written by Altheimer&Gray, a
Chicago-based law firm with a Kyiv office, states that “the
person who first submits an application to the State
Department on Intellectual Property has the right to
obtain a certificate.” Hence, the right to obtain a trademark is established on the date of filing an application.
Secondly, a reform of judicial system is under way. This
should increase the efficiency and transparency of
Ukraine’s legal system and improve contract implementation.
Source: “Ukraine and the World Economy: Risk Evaluation and
Recommendations for Economic Policy,” April 2002, prepared by the Institute
for Economic Research and Political Consultations and the German Consulting
Group on Economic Reforms with the GOU.
Certification Authority
Not yet implemented in Ukraine.
Foreign Economic Strategy
ICT Trade Policy
L
egal procedures for investment activities are regulated by
the March 19, 1996 Law on the Foreign Investment
Regime. The law establishes conditions to favor and provide
guarantees for all kinds of investments. Accordingly, a
Ukrainian legal entity is considered an enterprise with foreign
investments if its share of foreign capital is at least 10% of
authorized capital stock. There is no defined maximum share.
In fact, there are no limitations with regard to the form
of investment, either. Contributions can be made both in
cash and in kind. However, certain spheres are off-limits to
foreign investors: arms, the production of explosives and
other areas of national interest. According to the law, foreign investments in the form of property are exempt from
VAT, currently 20%, and import duty, if such investments
are not alienated for three years.
However, Verkhovna Rada adopted Law Nº2899-S on
Dec. 20, 2001, amending some laws to eliminate the evasion of tax, duty and dues or obligatory payments by some
EFIs. This canceled tax privileges for EFIs in order to set up
equal conditions for all manufacturers, domestic and foreign, who operate in Ukraine. Massive state arrears to
exporters and other businesses for VAT refunds darkens
the whole picture.
At the same time, during last two years Ukraine has
taken definite steps to improve the investment climate,
and this work continues. First of all, it is planned to gradually introduce the basic provision of a Tax Code by
adopting of legislation on taxation. In particular, this year
several draft laws have been proposed to solve the most
acute issues of taxation and balancing budget revenues:
•
cancelling economically ungrounded tax breaks;
•
improving the mechanism for imposing VAT and
reducing indebtedness in VAT refunds from the
Budget;
K
ey aims of Ukraine’s foreign economic strategy are to
ensure “optimal parameters of openness” in the economy according to world standards and criteria, to obtain
full membership in the European Union, and to integrate
Ukraine into the world economy. Priority steps in this
process will be acceeding to the WTO, creating a free trade
zone between Ukraine and EU, and other activities which
should create real grounds for Ukraine to enter EU.
Source: Sec. X of the State of the Nation Address of the President to the VR
called “European Choice” at www.kuchma.gov.ua
Investment Climate
The openness of the Ukrainian economy and its macroeconomic stability, as well as specific, concrete actions on
the part of its Government with the aim of improving the
investment climate and domestic tax legislation should
reduce the risks in attracting direct foreign investments
and, consequently, increase the trust of foreign investors
in the country.
Information Support to Foreign Economic Policy
Developing an information support system is a key element in promoting Ukrainian products on external markets. So, since the beginning of 2001, two open databases
of commercial export, import and investment proposals
have been made available on the Internet in on-line mode
at www.ukrdzi.com. Also, a Catalog entitled “Importers
and Exporters of Ukraine,” with data on some 5,000 leading domestic manufacturers was published in 2001 and
placed on the Internet at www.eximbase.com.
In order to help Ukrainian manufacturers, a special
Exporters’ Council website was created on the Internet
under the Cabinet of Ministers.
55
SECTION 5
56
NETWORK POLICY
APPENDIX
APPENDIX A
ADDITIONAL TABLES
This appendix contains tables in support of the texts in
Sections 1 and 4. The relevant page will be noted in the
text as well as here for cross-referencing.
Page 11. Telephone lines and growth rate
1995
1996
1997
1998
1999
2000
lines
8,056
8,186
8,415
9,263
10,074
10,417
growth %
1.6
2.8
10.0
7.5
2.8
* The sum of shares in all table columns totals over 100% because one user could
be classified several times if, say they use both national and local ISPs.
Source: SpyLOG, www.spylog.com
Page 11. General infrastructure data from ITU, ’000
ITU World Telecommunication Report 2002
cable television subscribers
home satellite antennas
television receivers
personal computers
population
% automatic main lines
% residential main lines
annual telecommunication investment
annual telecommunication investment, USD
cellular mobile telephone subscribers, digital
cellular mobile telephone subscribers, total
cellular mobile telephone subscribers per 100
cellular monthly subscription
cellular monthly subscription, USD
connection capacity of local exchanges
cost of a local 3-minute call (peak rate)
cost of a local 3-minute call (peak rate), USD
Gross Domestic Product (GDP)
Gross Domestic Product (GDP), USD
Gross Fixed Capital Formation (GFCF)
Gross Fixed Capital Formation (GFCF), USD
households
international incoming telephone traffic (minutes)
international outgoing telephone traffic (calls)
international outgoing telephone traffic (minutes)
Internet hosts
Internet users (estimated)
main telephone lines in operation
main telephone lines per 100 inhabitants
national currency per USD (end of year)
population of largest city
public pay phones
staff (total full-time in telecommunications)
telephone faults per 100 main lines
total telecommunication service revenue
total telecommunication service revenue, USD
total telephone subscribers
total telephone subscribers per 100
waiting list for main lines
1999
22,000
800
50,658
0
0
1,158,000
280,387
217
0
0
0
11,415
0
0
127,100,002
30,774,819
25,270,000
6,118,644
16,477
76,100
386,300
29
200
10,074
0
0
2,591
62
131
0
4,839,000
1,171,671
10,291
0
2,655
2000
2,640
130
23,000
890
50,456
0
0
1,458,000
268,015
759
819
0
920
50,296
0
2,225
0
11,662
16,300
269,500
71,500
383,000
36
350
10,417
0
0
2,539
64
128
6,534,900
1,201,268
11,236
0
2,500
This table illustrates the lack of adequate information about Ukraine from international sources.
58
2001
388,000
58
600
10,670
0
126
8,373,800
1,559,367
12,894
0
APPENDIX A
Page 13. Wireless affordability
operator brand
KyivStar GSM
package
Econom
cost in USD
monthly fee 5.00
outgoing 0.48/min
incoming 0.24/min
internal network in free
Elite
monthly fee 36.00
outgoing 0.27/min
incoming 0.19/min
Ace&Base PrePaid
outgoing 0.19-0.51/min
incoming 0.00-0.25/min
UMC20
monthly fee 9.00
20 domestic min free
outgoing 0.46/min
incoming 0.03/min
internal network free
UMC250
monthly fee 71.00
20 domestic min free
outgoing 0.46/min
incoming 0.03/min
internal network free
SimSim PrePaid
outgoing 0.15-0.54/min
incoming 0.15-0.45/min
Second
monthly fee 5.00
outgoing 0.08-0.30/min
incoming 0.08-0.30/min
internal network out 0.22/min
internal network in free
Second 1000
monthly fee 160.00
first 1,000 minutes free
outgoing 0.08-0.30/min
incoming 0.08-0.30/min
internal network out 0.14/min
internal network in free
UNI PrePaid
outgoing 0.18/min
incoming 0.04-0.21/min
www.kyivstar.net/tariffs/index.html
www.kyivstar.net/prepaid/index.html
UMC – Ukrainian Mobile Communications
www.umc.com.ua/umc_tariff_packages_u.html
www.sim-sim.com/ukr/howmuch3.html
Golden Telecom
www.gsm.goldentele.com/tariffs
www.uni.goldentele.com/tarifs
Page 38. Types of computer services transfer, USD millions
services related to ICT
including:
consulting
software development
data processing
database
servicing/repair of
office/computer equipment
export
3.9
1999
import
11.7
balance
-7.8
export
5.9
2000
import
13.3
balance
-7.4
export
7.6
2001
import balance
17.3
-9.6
0.7
2.4
0.2
0.1
2.7
4.2
1.7
0.6
-2.0
-1.8
-1.5
-0.5
2.1
3.2
0.4
0.1
4.2
3.9
1.9
0.3
-2.0
-0.7
-1.5
-0.1
0.4
6.3
0.8
0.0
3.2
7.9
2.8
2.1
-2.8
-1.7
-2.1
-2.1
0.5
2.4
-1.9
0.1
3.1
-3.0
0.2
1.2
-1.0
Source: DerzhKomStat
59
APPENDIX A
Page 18. Weekly Internet users and traffic by city
users, ’000
share, %
national networks
Kyiv
Dnipropetrovsk
Odesa
Donetsk
Kharkiv
Zaporizhzhia
L’viv
Simferopol
Mariupol
Luhansk
Mykolaïv
Ternopil
Sumy
Kherson
Kryviy Rih
Ivano-Frankivsk
Khmelnytskiy
Uzhhorod
Chernivtsi
Sevastopol
Kirovohrad
Poltava
Rivne
Kremenchuk
Lutsk
Mukachiv
Chernihiv
Pivdennoukrainske
Horlivka
Vinnytsia
Cherkasy
Zhytomyr
other cities
undefined city
72.5
275.8
50.0
48.9
30.8
22.7
14.7
13.9
7.2
6.0
5.4
5.1
3.8
3.8
3.6
3.4
3.2
3.1
2.5
2.4
2.2
2.2
2.1
2.0
1.6
1.4
1.3
1.1
1.0
0.9
0.8
0.7
0.7
2.1
10.6
12.0
45.6
8.3
8.1
5.1
3.8
2.4
2.3
1.2
1.0
0.9
0.8
0.6
0.6
0.6
0.6
0.5
0.5
0.4
0.4
0.4
0.4
0.4
0.3
0.3
0.2
0.2
0.2
0.2
0.1
0.1
0.1
0.1
0.3
1.7
TOTAL
605.2
100.7*
Page 22. Access to IT support training
provider
training
Oracle
In Ukraine, Oracle training is
available in at certified Oracle
training centre, BMS Consulting.
Oracle Russia has 7 centres.
Microsoft
Microsoft provides training at 4
certified training centres in
Ukraine: BMS Consulting,
Shevchenko University, Setyeviye
Tekhnologii, and KvasarMicro
Training Centre.
SCO
Only BMS Consulting provides
SCO training.
Informix
BMS Consulting’s certified
training centre shares the market
with Softline, which reputedly is
more popular.
Thompson-Prometric Thompson-Prometric provides
training at three centres in Kyiv:
UN0 at Kvazar- Micro, UN1 BMS
Consulting, UN3 at ViadukTelecom. AMI UN2 is in Donetsk
at the Academy of Networking
and UN5 is in L’viv, at the
Professional Training Centre.
Cisco
No certified private training
centres. Cisco Ukraine provides
training at Shevchenko
University and at the Ternopil
Academy. In addition to BMS
Consulting, three training
centres are expected to be
launched in the nearest future.
HP
Hewlett-Packard works with three
training partners in Ukraine: BMS
Consulting, S&T Ukraine, and
Soft-tronic
Source: BMS Consulting Ltd.
Page 38. Trends in computer services transfer by type
1999
services related to ICT
including:
consulting
software development
data processing
database
servicing/repair of office/
computer equipment
Source: DerzhKomStat
60
2000
2001
export
-11.4
import
-39.1
export
+53.5
import
+14.1
export
+28.6
import
+29.7
+142.9
-2.1
-73.1
-72.7
-42.6
-64.8
+4.4
+177.5
+198.5
+32.8
+95.3
+54.5
+51.3
-8.3
+14.5
-56.8
-80.5
+97.5
+108.8
-66.1
-23.0
+104.4
+49.1
+699.4
-21.0
+348.0
-73.9
+29.0
+25.0
-62.5
APPENDIX A
Page 19. Pre-paid Internet cards
provider
service
rate
other services
Lucky Net
card.lucky.net
7 days
45 UAH ($8.49)
30 days
132 UAH ($24.91)
free access to news.lucky.net news
server in read-only mode
access to proxy.lucky.net proxy-server
Access +
Hourly
charge
09:00-00:00: $0.69/h
00:00-09:00: $0.29/h
weekends: $0.29/h
Night Unlimited
00:00-09:00: $5/month
24-hours
$42/month
Home
Unlimited
19:00-09:00+weekends:
$15/month
1 Day-24 hrs
$1.00
Plan L 490-0490
09.00-21.00: $0.70/hr
21.00-09.00: $0.30/hr
weekends: $0.30/hr
09.00-21.00: $0.85/hr
21.00-01.00: $0.50/hr
01.00-09.00: $0.30/hr
weekends: $0.30/hr
$10.00/month
$0.50/h
$20.00/month
$0.40/h
IP Telecom
www.i.com.ua
Svit Online
(Golden Telecom)
www.svitonline.com
490-0491
Plan XL:
20 hours online
Plan XXL
50 hours online
Global Ukraine
www.gu.net
TEST
NIGHT
HOME
BUSINESS
UNIVERSAL
Ukr Net
www.ukr.net
24 hours: $1.00
Night
Night+
Home
01:00-09:00: $6.00/month
23:00-09:00:$11.90/mo.
19:30-09:00+weekends:
$19.00/month
15:00-09:00+weekends:
$23.90/month
$27.90/month
09:00-01:00: $0.48
01:00-09:00: $0.24
Unlimited
per hour
free mail-box (10 Mb)
free personal www-site (10 Mb)
roaming in Ukraine and CIS
Hr 9.00 ($1.70)
24 hours from first access
Hr 19.00 ($3.58)
0:00-09:00 for 1 month
Hr 79.00 ($14.91)
19:00-09:00 Mon-Fri
+ weekends
Hr 79.00 ($14.91)
07:00-19:00 for 1 month
Hr 99.00 ($18.70)
24 hours for 30 days
Single day
Home+
free mail-box
free personal www-site
free mail-box
free-www-site
61
APPENDIX B
BASIC INDICATORS FOR UKRAINE
OFFICIAL NAME
UKRAINE
CAPITAL
KYIV
Area
People
Population
Population growth rate
Projected population in 2025
Projected population in 2050
Population distribution
Population density
603,700 sq km or 233,100 sq mi
Share urban
Share rural
Largest urban areas
Kyiv
Kharkiv
Dnipropetrovsk
Donetsk
Odesa
Ethnicity
Ukrainian
Russian
Other
48,416,000 (Dec. 5, 2001)
-0.78% (2001*)
43,292,725 (2001*) (2001*)
37,726,401 (2001*) (2001*)
80 persons per sq km (2001*)
208 persons per sq mi (2001*)
67% (2001*)
33% (2001*)
2,602,000 (2001*)
1,470 ,000 (2001*)
1,064 ,000 (2001*)
1,016,000 (2001*)
1,029,000 (2001*)
73%
22%
5%
Languages
Ukrainian (official)
Russian
Romanian
Polish
Religious affiliations
Agnostic/Atheist
Ukrainian Orthodox-Moscow Patriarchate
Ukrainian Orthodox-Kyiv Patriarchate
Ukrainian Autocephalous Orthodox
Ukrainian Catholic (Uniate)
Protestant
Jewish
Muslim
HEALTH AND EDUCATION
Life expectancy
Total
Female
Male
Infant mortality rate
Health care
Population per physician
Population per hospital bed
Literacy rate
Total
Female
Male
Education
expenditure as a share of GNP
response of years of compulsory schooling
response of students per teacher, primary school
62
66.2 years (2001*)
72.0 years (2001*)
60.6 years (2001*)
21 deaths/1,000 live births (2001*)
216 people (2000)
105 people (2000)
99.9% (2001*)
99.9% (2001*)
99.9% (2001*)
1.8 (2001)
9 years (2002)
20 students per teacher (2001)
APPENDIX B
GOVERNMENT
Form of government
Voting qualifications
Constitution passed
Armed forces total military personnel
republic
universal, at age 18
June 28, 1996
310,000 (2000)
ECONOMY
Gross domestic product (GDP, in USD]
GDP per capita (USD)
$37.6 billion (2001)
$772 (2001)
GDP by economic sector
Agriculture, forestry, fishing hunting
Industry + construction
Services + other rypes of economic activities
16.6% (2001)
39.0% (2001)
44.4% (2001)
EMPLOYMENT
Workforce share of economic sector total
Agriculture, forestry, fishing
Industry
Services
Unemployment rate
85% (2000)
27% (2000)
28% (2000)
33% (2000)
11.7% (2000)
11.1% (2001)
NATIONAL BUDGET (USD)
Total revenue
Total expenditure
Monetary unit
Major trade partners for exports
Major trade partners for imports
$7.25 billion (2001)
19.3 of % GDP
$7.49billion (2001)
19.8% of GDP
1 hryvnia, consisting of 100 kopiykas
Russia, China, Belarus, Turkey, Germany
Russia, Turkmenistan, Belarus, Germany, China
ENERGY, COMMUNICATIONS, AND TRANSPORTATION
Electricity production
thermal sources (TES)
hydroelectric sources (HES)
nuclear sources (AES)
Electricity from geothermal, solar, and wind sources
47.67% (1999*)
9.65% (1999*)
42.67% (1999*)
0% (1999*)
Consumer access
radios per 1,000 people
telephones per 1,000 people
televisions per 1,000 people
Internet hosts per 10,000 people
daily newspaper circulation per 1,000 people
response of motor vehicles per 1,000 people
paved road as a share of total roads
Sources
Basic Facts and People sections
Area data are from the statistical bureaus of individual countries. Population,
population growth rate, and population projections are from the US Census
Bureau, International Programs Centre, International Data Base at www.census.gov. Urban and rural population data are from the Food and Agriculture
Organization of the UN, FAOSTAT database at www.fao.org. Largest cities population data and political divisions data are from the statistical bureaus of individual countries. Ethnic divisions and religion data are largely from the latest
CIA World Factbook and from various country censuses and reports. Language
data are largely from the Ethnologue, Languages of the World, Summer Institute
of Linguistics International at www.sil.org.
Health and Education section
Life expectancy and infant mortality data are from the US Census Bureau,
International Programs Centre, IDB at www.census.gov. Population per physician and population per hospital bed data are from the World Health
Organization at www.who.int. Education data are from the UNESCO database
at www.unesco.org.
882 (1997)
199 (1999)
353 (1997*)
6.6 (2000)
54 (1996)
102 (1999)
97% (1999)
Government section
Government, independence, legislature, constitution, highest court, and voting
qualifications data are largely from various government websites, the latest
Europa World Yearbook, and the latest CIA World Factbook. The armed forces
data is from Military Balance.
Economy section
Gross domestic product, GDP per capita, GDP by economic sectors, employment, and national budget data are from the World Bank database at
www.worldbank.org. Monetary unit, agriculture, mining, manufacturing,
exports, imports, and major trade partner information is from the latest Europa
World Yearbook and various IMF publications.
Energy, Communication, and Transportation section
Electricity information is from the Energy Information Administration database
at www.eia.doe.gov. Radio, telephone, television, and newspaper information is
from the UNESCO database at www.unesco.org. Internet hosts, motor vehicles,
and road data are from the World Bank database at www.worldbank.org.
Figures may not total 100% due to rounding.
63
APPENDIX B
TELECOMMUNICATIONS DATA
UKRTELECOM DATA
Information as of Oct. 5, 2000
COMPANY DETAILS
Company name:
Address:
Post Code:
City:
Country:
Telephone:
Fax:
Website:
Ukrtelecom, Joint-Stock Company
bul. Tarasa Shevchenka 18
01030
Kyiv
Ukraine
+380 44 226 2541
+380 44 229 2506
www.ukrtel.net
1. COMPANY PROFILE
The company is a:
Status of the company:
Type of operator:
Date of the company’s foundation:
public (state-owned) company
Will be privatized in the future
Network operator AND Service provider
15-Dec-1993
2. NETWORK AND SERVICES
As network operator, the company owns:
As service provider,
the company provides:
Local network
Long-distance network
International network
Fixed telephone service:
By cable
By fiber
Local area
Long-distance
International
Telephone booth/public payphone
Internet access
Circuit switched (traditional telephony)
Is your company authorized to supply
this (these) service(s):
Type of authorization :
When did this authorization enter into force:
What does the authorization expire:
If the company supplies different types
of service, is it under the same corporate name:
Yes
Licence
05-Apr-2000
18-Sep-2010
Yes
3. ORGANIZATION
The company is :
The parent company
4. INFRASTRUCTURE AND SIZE OF COMPANY
End of financial year:
response of subscribers:
response of employees:
31-Dec
1998
7,717,800
5. GEOGRAPHICAL COVERAGE
The national coverage of the company is:
In terms of territory:
64
100%
1999
8,164,500
431,057
APPENDIX C
6. PARTNERSHIPS - ACTIVITIES
Has the company already concluded
partnerships or alliances:
With what kind of companies:
Company’s principle shareholders:
Company’s principal shareholdings:
Yes
Foreign companies both in developed
and developing countries
Shareholders
Percentage
Government
100
Shareholdings
Percentage
Utel
51
UMC
25
Infocom
51
7. PROJECTS
Kind of project(s) for 2000:
Brief description of this (these) project(s):
Kind of project(s) for 2001:
Does the company seek
partner(s) to achieve
this (these) project(s):
What kind of partners:
Expansion of the network
Modernization of the network/system
Improve quality of the existing equipment,
service offered
Provision of new services
Black Sea Fibre-Optic Cable System (BSFOCS)
Expansion of the network
Modernization of the network/system
Improve quality of the existing equipment
Provision of new services
Yes
Financers
UTEL DATA
Information as of Oct. 1, 2000
COMPANY DETAILS
Company name:
Address:
Post Code:
City:
Country:
Telephone:
Fax:
Website:
Utel
vul. Volodymyrska 101
01033
Kyiv
Ukraine
+380 44 230 4250 / 4220
+380 44 230 4259 / 4229
www.utel.com.ua
1. COMPANY PROFILE
The company is a:
Percentage of share owned by the State:
Status of the company:
Type of operator:
List of network operator(s) used to supply
the service:
Date of the company’s foundation:
Has the company ever changed its name
since it was founded:
Semi-public company
51%
Will be privatized in the future
Service provider
Ukrtelecom
01-Dec-1992
No
2. NETWORK AND SERVICES
As service provider, the company provides:
Fixed telephone service:
By cable
By fiber
Long-distance
International
Telephone booth/public payphone
65
APPENDIX C
Data transmission
Internet access
Is your company authorized to supply this
(these) service(s):
Type of authorization :
When did this authorization enter into force:
What does this authorization’s expire:
If the company supplies different types of service,
is it under the same corporate name:
Please state the types of service and c
orresponding corporate names:
Yes
Licence
01-Dec-1992
01-Dec-2007
No
ISP: Unet
3. ORGANIZATION
The company is :
Name of the parent company:
A subsidiary company
Ukrtelecom, Joint-Stock Company
4. INFRASTRUCTURE AND SIZE OF COMPANY
End of financial year:
31-Dec
1999
2000
response of employees:
5. GEOGRAPHICAL COVERAGE
The national coverage of the company is:
In terms of territory:
In terms of population:
100%
20%
6. PARTNERSHIPS - ACTIVITIES
Has the company already concluded partnerships
or alliances:
Is the company interested in any partnerships/
alliances:
Company’s principle shareholders:
No
No
Shareholders
Ukrtelecom
AT&T
Deutsche Telekom
KPN
Percentage
51.0
19.5
19.5
10.0
7. PROJECTS
Kind of project(s) for 2000:
Brief description of this (these) project(s):
Kind of project(s) for 2001:
Brief description of this (these) project(s):
Does the company seek partner(s) to achieve
this (these) project(s):
66
Modernization of the network/system Improve
quality of the existing equipment, service offered
Provision of new services
Prepaid Internet
Modernization of the network/system Improve
quality of the existing equipment
Provision of new services
Prepaid IDD services
No
APPENDIX D
UNDP SURVEY
PARTIAL RESULTS OF SURVEY CONDUCTED FOR E-READINESS ASSESSMENT, JUNE 2002
Question #1. At home, do you have: Electricity
Total 1,204 Answered 1,203 (99.92%)
Yes
No
response
1,200
3
% of total
99.67
0.25
% of answered
99.65
0.25
response
1,154
48
% of total
95.85
3.99
% of answered
96.01
3.99
response
701
484
% of total
58.22
40.20
% of answered
59.16
40.84
% of total
33.64
65.12
% of answered
34.06
65.94
% of total
78.41
20.85
% of answered
79.00
21.00
% of total
74.83
24.83
% of answered
75.08
24.92
% of total
33.55
49.42
% of answered
40.44
59.56
% of total
5.90
11.21
5.48
13.79
2.24
% of answered
17.79
33.83
16.54
41.60
6.77
Question #2. TV
Total 1,204 Answered 1,202 (99.83%)
Yes
No
Question #3. Phone
Total 1,204 Answered 1,185 (98.42%)
Yes
No
Question #4. Is there a payphone near your home?
Total 1,204 Answered 1,189 (98.75%)
Yes
No
response
405
784
Question #5. Do you read newspapers or other periodicals?
Total 1,204 Answered 1,195 (99.25%)
Yes
No
response
944
251
Question #6. Do you know what the Internet is?
Total 1,204 Answered 1,200 (99.67%)
Yes
No
response
901
299
Question #7. Do your relatives use the Internet?
Total 1,204 Answered 999 (82.97%)
Yes
No
response
404
595
Question #8. If yes, who does? (Specify)
Total 1,204 Answered 399 (33.14%)
Husband/wife
Child
Parent
Brother/sister
Other
response
71
135
66
166
27
Question #9. Do you know anybody else who uses the Internet?
Total 1,204 Answered 992 (82.39%)
Yes
No
response
719
273
% of total
59.72
22.67
% of answered
72.48
27.52
67
APPENDIX D
Question #10. If yes, who? (Specify)
Total 1,204 Answered 717 (59.55%)
Friend
Colleague
Relative/friend abroad
Other
response
422
260
206
43
% of total
35.05
21.59
17.11
3.57
% of answered
58.86
36.26
28.73
6.00
% of total
28.32
54.24
% of answered
34.31
65.69
% of total
8.39
19.60
% of answered
29.97
70.03
Question #11. Did you personally ever use the Internet?
Total 1,204 Answered 994 (82.56%)
Yes
No
response
341
653
Question #12. Do you have personal e-mail?
Total 1,204 Answered 337 (27.99%)
Yes
No
response
101
236
Question #13. How many e-mail messages do you receive in a month?
Total 1,204 Answered 1,02 (8.47%)
None
<10 messages a month
10-50 messages a month
> 50 messages a month
response
8
44
35
15
% of total
0.66
3.65
2.91
1.25
% of answered
7.84
43.14
34.31
14.71
Question #14. Do you have any Internet service (or Internet café) in your area?
Total 1,204 Answered 339 (28.16%)
Yes
No
response
209
130
% of total
17.36
10.80
% of answered
61.65
38.35
% of total
6.06
21.84
% of answered
21.73
78.27
Question #15. Do you have Internet access at home?
Total 1,204 Answered 336 (27.91%)
Yes
No
response
73
263
Question #16. Did you use the Internet in the last 12 months?
Total 1,204 Answered 333 (27.66%)
Yes
No
response
284
49
% of total
23.59
4.07
% of answered
85.29
14.71
% of total
2.49
4.57
6.06
15.03
% of answered
8.85
16.22
21.53
53.39
Question #17. How often do you use the Internet?
Total 1,204 Answered 339 (28.16%)
Every day/almost every day
Several times a week
Several times a month
From time to time
68
response
30
55
73
181
APPENDIX D
Question #18. Do you use a PC at work?
Total 1,204 Answered 328 (27.24%)
Yes, we share one PC
Yes, we share several PCs
Yes, everyone has a PC
No
response
43
83
39
163
% of total
3.57
6.89
3.24
13.54
% of answered
13.11
25.30
11.89
49.70
% of total
10.05
3.41
% of answered
74.69
25.31
% of total
5.23
8.55
7.39
3.82
3.16
% of answered
18.58
30.38
26.25
13.57
11.21
% of total
12.38
21.51
3.65
9.63
1.08
% of answered
43.95
76.40
12.98
34.22
3.83
% of total
2.57
8.14
8.14
15.12
6.81
7.97
1.58
1.91
2.16
% of answered
9.31
29.43
29.43
54.65
24.62
28.83
5.71
6.91
7.81
Question #19. Do you have access to the Internet at work?
Total 1,204 Answered 162 (13.46%)
Yes
No
response
121
41
Question #20. Where did you use the Internet last?
Total 1,204 Answered 339 (28.16%)
At school
At an Internet café
At work
At home
Other
response
63
103
89
46
38
Question #21. What Internet service did you use last time?
Total 1,204 Answered 339 (28.16%)
Surfing sites
Searching for materials/information
Chat
E-mail
Other
response
149
259
44
116
13
Question #22. Why do you browse websites?
Total 1,204 Answered 333 (27.66%)
To search/buy products, services
For business
To read news
To find materials for my studies
Games
Entertainment
For financial information
Health
Other
response
31
98
98
182
82
96
19
23
26
Question #23. What services would you prefer on the Internet?
Total 1,204 Answered 332 (27.57%)
Educational courses
Libraries, vocabularies
Reference information
Applications
Application facilities for business
Digest of local news
Business and political digest
Other
response
143
96
184
16
52
32
72
20
% of total
11.88
7.97
15.28
1.33
4.32
2.66
5.98
1.66
% of answered
43.07
28.92
55.42
4.82
15.66
9.64
21.69
6.02
69
APPENDIX D
Question #24. Do you use any government sites?
Total 1,204 Answered 331 (27.49%)
Yes
I looked, but I couldn’t find any
No
response
59
15
257
% of total
4.90
1.25
21.35
% of answered
17.82
4.53
77.64
% of total
2.16
1.74
1.08
% of answered
43.33
35.00
21.67
Question #25. If you did, what did you think about the site?
Total 1,204 Answered 60 (4.98%)
Useful, found what I needed
Too difficult, but found what I needed
I didn’t find what I needed
response
26
21
13
Question #26. What information would you like on government sites?
Total 1,204 Answered 266 (22.09%)
About officials, politicians
About social services, health, education
Documents
On-line forms
Other
response
127
106
100
51
15
% of total
10.55
8.80
8.31
4.24
1.25
% of answered
47.74
39.85
37.59
19.17
5.64
% of total
15.37
12.29
% of answered
55.56
44.44
Question #27. How do you find your access speed?
Total 1,204 Answered 333 (27.66%)
Acceptable
Too slow
response
185
148
Question #28. How much do you spend on the Internet (e-mail) a month?
Total 1,204 Answered 284 (23.59%)
Minimum
0..000
Maximum
500.000
Average
30.141
Coefficient of variation
1.607
response
53
118
75
6
% of total
4.40
9.80
6.23
0.50
% of answered
21.03
46.83
29.76
2.3
response
886
40
% of total
73.59
3.32
% of answered
95.68
4.32
response
433
493
% of total
35.96
40.95
% of answered
46.76
53.24
% of total
65.95
10.55
% of answered
86.21
13.79
Question #29. How do you pay for Internet (e-mail)?
Total 1,204 Answered 252 (20.93%)
By card
By cash
By company bank transfer
Other
Question #30. Do you know what a PC is?
Total 1,204 Answered 926 (76.91%)
Yes
No
Question #31. Did you ever use a PC?
Total 1,204 Answered 926 (76.91%)
Yes
No
Question #32. Do you know anybody who uses a PC?
Total 1,204 Answered 921 (76.50%)
Yes
No
70
response
794
127
APPENDIX D
Question #33. Are you male or female?
Total 1,204 Answered 1,202 (99.83%)
Male
Female
response
533
669
% of total
44.27
55.56
% of answered
44.34
55.66
response
355
379
470
% of total
29.49
31.48
39.04
% of answered
29.49
31.48
39.04
response
73
163
195
41
98
207
46
65
120
181
2
% of total
6.06
13.54
16.20
3.41
8.14
17.19
3.82
5.40
9.97
15.03
0.17
% of answered
6.13
13.69
16.37
3.44
8.23
17.38
3.86
5.46
10.08
15.20
0.17
response
253
170
327
449
% of total
21.01
14.12
27.16
37.29
% of answered
21.10
14.18
27.27
37.45
response
200
214
190
200
200
200
% of total
16.61
17.77
15.78
16.61
16.61
16.61
% of answered
16.61
17.77
15.78
16.61
16.61
16.61
Maximum
764.000
Average
373.349
Coefficient of variation
0.530
Question #34. How old are you?
Total 1,204 Answered 1,204 (100.00%)
8-19
20-40
> 40
Question #35.What do you do?
Total 1,204 Answered 1,191 (98.92%)
Business manager
State employee
Skilled worker
Farm worker
Laborer
Student
Housewife
Unemployed
Pensioner
Pupil
Other
Question #36. In what type of settlement do you live?
Total 1,204 Answered 1,199 (99.58%)
Hamlet
Village
Town
City
Question #37. Region
Total 1,204 Answered 1,204 (100.00%)
L’viv oblast
Donetsk oblast
Luhansk oblast
Kharkiv oblast
Ternopil oblast
Ivano-Frankivsk oblast
Question #38. Response of respondents
Total 1,204 Answered 1,035 (85.96%)
Minimum
1.000
71
APPENDIX E
HARVARD e-DEVELOPMENT READINESS GUIDE
READINESS FOR
THE NETWORKED WORLD
A Guide for Developing Countries
We would like to acknowledge the Computer Systems Policy Project for their
assistance and original work on Global Electronic Commerce Readiness, and
our colleagues throughout the world who provided their input and comments during the development of the Guide. We are especially grateful to
IBM for their support of this project.
T
he technological gains of the last several decades lie at the core of staggering new
surges of wealth and well-being within the richest countries of the world.
Electronic commerce and related applications of information and communication
technologies (ICTs) have become tremendous engines for economic growth and productivity and are changing the shape of the world in which we live. Yet the developed world is reaping the vast majority of these gains. It is our view that the appropriate use of information and communication technologies can also improve the
lives of the 80% of the world’s population that lives in the developing world.
The great divide between rich and poor countries, long observed with regard to
economic wealth and social conditions, is equally prevalent and worrisome in the
realm of information and communication technologies. While the growth of the
Internet and the continuing “digitization of society” are much heralded events in
more developed countries, many leaders in developing nations are left wondering
how they can participate in the rapid changes going on around them. How can ICTs
help their businesses, governments and communities become more productive? How
do they get ready for the Networked World?
We believe that there now exists a unique opportunity for many of these communities to join global information networks to propel them to greater wealth and
prosperity. Without a concerted effort by the developing world to get ready for the
global networked economy, however, the gaps in living standards between developed
72
HARVARD e-DEVELOPMENT READINESS GUIDE
and developing countries will only grow wider, and the productive use of these technologies will remain a phenomenon that is largely confined to the richest parts of
the world.
Building upon earlier work by the Computer Systems Policy Project (CSPP) on
Global Electronic Commerce Readiness, and with the support of IBM, we have created a systematic but flexible approach to assessing Networked Readiness. This
Guide is a tool that provides the first step in creating a strategic approach to planning for developing world communities. Our collective understanding of Networked
Readiness is still in its infancy, particularly with respect to the largely untapped
markets and resources of the developing world. The landscape is shifting rapidly,
and we recognize the challenge of creating a methodology that must serve diverse
communities and apply to a rapidly evolving subject matter. To that end, the Guide
is a general framework that each community should tailor to its own needs. It
should be used not for comparison among communities, but for appraisal within
them.
It is our hope that Readiness for the Networked World: A Guide for Developing
Countries will become a valuable resource that business people, policy-makers,
community leaders and others will use to unlock the tremendous potential that ICTs
hold as a catalyst for development. It is not an easy task, for there exist myriad
obstacles to Readiness, but with hard work and cooperation among the public, private, and non-profit sectors, we believe that the communities in the developing
world can begin to better capture the benefits of the Networked World.
Jeffrey D. Sachs
Director
Center for International Development at Harvard University
APPENDIX E
GETTING STARTED
WHAT IS THE NETWORKED WORLD ?
E
ver-evolving and increasingly powerful information and communication technologies (ICTs) have fundamentally changed the nature of global relationships,
sources of competitive advantage and opportunities for economic and social development. Technologies such as the Internet, personal computers and wireless telephony have turned the globe into an increasingly interconnected network of individuals, firms, schools and governments communicating and interacting with each other
through a variety of channels. The explosion of this technologically mediated global
network has resulted in a world in which virtually everyone, everywhere, has the
potential to reap the benefits of connectivity to the network.
An artisan in a rural village using her community center’s computer to sell
handicrafts on the World Wide Web.
Healthcare workers accessing on-line databases to research recent health advisories.
Students in different countries collaborating on a science project over the
World Wide Web.
Programmers creating customized software for distant clients through the
Internet.
Government procurement officers using the World Wide Web for purchases
and contracts.
A farmer using a wireless hand-held device to research market prices.
THE NETWORKED WORLD IS:
•
•
•
•
•
•
WHAT ARE THE BENEFITS OF THE NETWORKED WORLD
FOR DEVELOPING COUNTRIES ?
Success in the Information Age depends upon the widespread integration of information and communication technologies into society-at-large. New value propositions based upon ICTs emerge as individuals begin to accept and understand their
usefulness. This change in attitude and behavior leads to creative solutions and new
models that can radically reshape how businesses, hospitals, schools and governments work.
HARVARD e-DEVELOPMENT READINESS GUIDE
In the more developed nations, the deployment of ICTs is more widespread and is supported not only by better infrastructure, but also by more fundamentally sound societal
building blocks such as healthcare and education. The developing world, on the other
hand, suffers from serious deficits and profoundly uneven distributions within these areas.
Rapid increases in computing power, plunging prices for silicon chips and electronics, and advances in wireless communications have made powerful technologies
accessible to many parts of the world which have historically lagged far behind in
technology adoption. Suddenly, this accessibility allows developing nations to
achieve significant, shared and sustained gains from joining the Networked World,
particularly if broad development goals are kept in mind as communities in these
nations focus on their own Readiness.
T
he new ICTs are a powerful yet neutral tool that can be used to address a host of
issues in every community – their real power, therefore, lies in their ability to support holistic development that promotes long-term social and economic benefits. If
information and communication technologies are used effectively, they can help to
create a trained, educated and healthy workforce that can build a vibrant and successful economy.
The value of a network increases as its number of users grows. By participating in
the global information network, developing nations not only add value to the rest of
the world, but also benefit from the ability to use the network to communicate and
trade with all other users. For this reason it becomes ever more important for the
developing world to get ready for the Networked World.
Getting ready for the Networked World creates new opportunities for firms and
individuals in the developing world, eliminates barriers that have traditionally stifled
flows of information and goods to and from developing nations, and promotes efficiency in a host of activities. Students can learn more about the world and about
themselves through use of the network. Business people can find new market opportunities and more efficient ways to run their firms. Governments can more effectively provide public services. Individuals can communicate with friends and family and
become more informed about virtually anything that is on the network.
Participation in the Networked World can provide new ways for developing countries to improve their economic, social and political well-being. These opportunities
for positive change are increasingly relevant and achievable as information and communication technologies become more powerful and less expensive.
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APPENDIX E
Increases convenience
and choice for consumers
Extends market reach for
businesses and supports
fair return on goods and
services
Allows new business
models to develop
Creates
New Opportunities
•
•
•
•
•
•
Eliminates
Barriers
Provides access to information to all on the
network
Overcomes physical and
virtual isolation
Permits individuals to
become better informed
of government policies
and processes
Streamlines product
and service delivery
Increases transparency of operations
Reduces transaction
costs
WHAT ARE THE BENEFITS OF PARTICIPATING IN THE NETWORKED WORLD ?
•
•
•
Promotes Efficiency
WHAT IS READINESS ?
Readiness is the degree to which a community is prepared to participate in the
Networked World. It is gauged by assessing a community’s relative advancement in
the areas that are most critical for ICTadoption and the most important applications
of ICTs. When considered together in the context of a strategic planning dialogue, an
assessment based on these elements provides a robust portrayal of a community’s
Readiness.
The value to a community of assessing its Readiness lies in evaluating its unique
opportunities and challenges. Most communities will not be uniformly Ready across
all evaluation criteria. The result is not a simple “yes” or “no,” but rather a complex
map or detailed snapshot of a community’s potential. A community may be well
poised for some applications of ICTs, but unable to use others. The scope and detail
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HARVARD e-DEVELOPMENT READINESS GUIDE
of the Guide’s output makes it a powerful tool for identifying a community’s strategic priorities for participating in the Networked World.
WHAT IS THE GUIDE ?
This Guide is an instrument that systematically organizes the assessment of numerous factors that determine the Networked Readiness of a community in the developing world. The Guide requires significant participation and interpretation on the part
of its users. It examines 19 different categories of indicators, ranking each by levels of
advancement in
Stages One through Four. The Guide neither offers specific advice nor suggests
that the only route from Stage Two to Stage Four be through Stage Three. Nor does it
provide an overall score; it seeks only to offer a starting point in an ICT planning
process.
The categories are linked, each driving the others, such that a community cannot
concentrate solely in one area, but must pay attention to each, noting where it might
be able to capitalize on synergies among the categories.
The categories fall within five groups:
Network Access:
What are the availability, cost and quality of ICT networks,
services and equipment?
Networked Learning: Does the educational system integrate ICTs into its processes
to improve learning? Are there technical training programs in
the community that can train and prepare an ICT workforce?
Networked Society:
To what extent are individuals using information and
communication technologies at work and in their personal
lives? Are there significant opportunities available for those
with ICT skills?
Networked Economy: How are businesses and governments using information and
communication technologies to interact with the public and
with each other?
To what extent does the policy environment promote or
hinder the growth of ICTadoption and use?
Network Policy:
APPENDIX E
WHO SHOULD USE THE GUIDE ?
The Guide is targeted at communities in developing countries seeking to define a
strategy to participate in the Networked World. A “community” may be any size: a
country, province, city or village. The Guide will naturally yield unique results for
each community. For instance, the issues that are most easily addressed at a municipal level may be more challenging at a national level, and vice versa. Likewise, the
value of each category will vary for each community. Available data are also of different character and quality in each community. This will be reflected in the relative
precision of each assessment.
In referring to its audience as the “developing world,” the Guide groups together a
great number of communities with widely different characteristics. There is a great deal of
variation, not only among countries, but also within them. This is particularly true with
respect to comparative conditions between rural and urban areas. The Guide attempts to
be a one-size-fits-all model that is flexible enough to accommodate any community in the
developing world, recognizing that there are certain limitations to this approach.
Just as communities are different from each other, leadership styles and goals in the
development and implementation of ICT initiatives may arise from different places in
each community. The composition of leadership groups using the Guide will therefore
vary case by case. In some communities, businesses may take the lead. In others, academia or government may seize the initiative. In any case, a broad partnership among
leaders across these sectors may produce the most thorough assessment and provide
the best foundation for cooperation on future actions to improve Readiness.
HOW SHOULD THE GUIDE BE USED?
There is no one correct way to use the Guide; each community should determine how
the Guide best addresses its own needs. Depending on the resources and goals of the
community, the assessment process and results will vary in detail, depth and scope.
In general, however, users of the Guide should estimate their own community's
current stage within each Readiness category. Communities may have difficulty placing themselves in a specific stage within some categories, as certain indicators within a stage may not be consistently linked. A community facing this situation should
realistically determine which indicator is most relevant to its own ICT goals.
While the Guide alone does not offer prescriptions for improved Readiness, it is
useful for giving communities an idea of their current state of preparedness to participate in the Networked World. In order to decide where to go, each community must
first know where it is. The Guide provides a firm base upon which to build a planning
dialogue and is an important step in making sound policy and investment decisions.
HARVARD e-DEVELOPMENT READINESS GUIDE
NETWORK ACCESS
T
he minimum necessary condition for Readiness is access to adequate network
infrastructure. Without access to global communications networks, no community can participate in the Networked World. Access is determined by a combination of
the availability and affordability of use of the network itself, as well as of the hardware and software needed for network interface. The quality and speed of the network are also important in determining how the network is used. The customer service orientation of access providers is a major factor in network application adoption
and usability.
Because of the growing importance and unique character of the Internet, which
provides a global platform for both data and (increasingly) voice services, the assessment of network access should be carried out in the context of Internet access, rather
than access to either voice or data. The significance of the Internet will only continue to grow in terms of global trade and communication.
Information Infrastructure. For most communities in the developing world, a lack of
access to voice and data services remains a significant impediment to Networked
Readiness. Communications infrastructure is deployed with widely varying local and
regional rates of penetration, depending on factors such as geography and/or income
levels. Local network access may be provided by any one of a number of media that
make up the communications network (including twisted pair copper wire, coaxial
cable, wireless local loop, satellite and fiber optics). While in the future, mobile wireless technologies will undoubtedly provide an attractive option for data access (see
box insert: “The Promise of Wireless Communications”), as will cable networks and
perhaps even the electrical grid, currently most Internet access in the developing
world is provided through the traditional telecommunications network.
Internet Availability. Internet access is enhanced by competition among Internet
Service Providers (ISPs) that operate locally. The range of services offered, number of
dial-up lines (which helps determine ISP capacity) and transmission capacity all influence an ISP’s usefulness. The availability of leased lines is particularly important in
making the Internet available to the business community. Finally, in many communities in the developing world, public access is essential to making the Internet available to greater numbers of individuals and firms. Telecenters, Internet cafes and community information centers assume great importance in making the Internet available to those who do not have personal access at home, school, work or elsewhere.
Internet Affordability. The prices which businesses and individual consumers pay for
Internet access are in most cases determined by a combination of fees for basic teleph-
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HARVARD e-DEVELOPMENT READINESS GUIDE
Access to telecommunications infrastructure is very poor.
(Roughly: There are very few shared facilities for telecommunications access.
Telephone penetration is very low, with a teledensity of less than 2 mainlines
per 100 people. Mobile wireless penetration is below 0.5% of the population.
No cable services are available.)
A limited number of Internet Service Providers offers local dial-up access.
There are more than 1,000,000 inhabitants per local ISP. Some providers
offer only e-mail services.
There are limited opportunities for public Internet access.
Users often have difficulty establishing a dial-up connection to a local ISP.
There is no competition in commercial leased line provision. Businesses
may only lease lines from a single telephone operator.
There are no Internet Service Providers (ISPs) offering local dial-up access.
There is no public Internet access.
Businesses are unable to lease dedicated lines from the local telephone
operator, or there is a multi-year wait to do so.
Telephone charges for Internet access reflect emerging competition in the
telecoms market, yet they are high enough to discourage extensive use by
some users.
Internet access is priced within reach of the majority of citizens.
Competition in leased line provision for businesses has been introduced,
and prices are falling but are still high.
Rates for local telephone calls are high enough to discourage extensive
Internet use via local ISPs, even among most who can afford Internet
access.
Local access solutions exist, but rates for ISP services are high enough to
discourage extensive Internet use.
The lack of competition in the provision of commercial leased lines is reflected in prohibitively or very high leasing fees.
Most users are charged long distance or international rates for dial-up
access.
ISP rates are so high that few individuals can afford Internet access.
Internet Affordability
A small minority in the community has good access to the telecommunications network, but most of community does not.
(Roughly: Teledensity is between 2 and 8 mainlines per 100 people. Mobile
wireless penetration is between 0.5% and 3%. Cable penetration is below 5%
of all households in the community.)
There are between 500,000 and 1,000,000 inhabitants per local ISP. ISPs
provide full Internet access.
Subscribers may have some options between various Internet service packages.
There are some opportunities for public Internet access.
It is normally possible for users to establish a dial-up connection to a local
ISP, except during peak hours.
One or two private providers leased lines to businesses.
Prices for telephone usage are set competitively and are affordable for nearly all citizens.
Flat rate pricing may be in effect for local telephone calls.
Prices for Internet access are set competitively and are affordable for nearly all citizens. Flat rate pricing may be available. Free ISP services may be
available, particularly in communities with time-metered pricing of local
phone calls.
Higher bandwidth solutions such as DSL services and cable modem access
are priced competitively, which may include tiered pricing based on speed
of access or usage-based pricing based on total volume. “Always-on” connections are available without time-metered pricing.
Pricing for leased business lines is set in a competitive environment featuring multiple vendors.
Internet Availability
A sizeable portion of the community has good access to telephone services.
Growth in mobile wireless telephony is accelerating.
(Roughly: Teledensity is between 8 and 40 mainlines per 100 people. Mobile
wireless penetration is between 3% and 14%. Between 5 and 10% of households in the community subscribe to cable services.)
There are more than two local ISPs per 1,000,000 inhabitants.
Higher bandwidth solutions such as DSL(digital subscriber line) and cable
modem access are available. Most customers can tailor services to meet
different demands for speed, service, security, quality and cost.
ISPs provide web hosting services to their subscribers.
There are adequate opportunities for public Internet access for those without access at home, school or work.
Users are able to establish a dial-up connection to a local ISP on a reliable
basis.
Multiple private providers leased lines to businesses. Wireless solutions may
be available in addition to fixed line solutions.
Information Infrastructure
There is widespread access to telecommunications and network services.
(Roughly: There is high teledensity of 40 mainlines or more per 100 people.
Penetration of mobile wireless telephony is high and growing, with at least
14% of the community subscribing. Cable penetration is high, at 10% of
households or higher.)
APPENDIX E
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Stage 1
Stage 2
Stage 3
Stage 4
Fewer than half of all domestic telephone calls are successful.
For voice telephony, sound quality is often not acceptable for regular conversation.
More than 100 faults are reported per year for each 100 telephone mainlines.
No services beyond limited electronic mail capabilities are supported by the
local telecommunications infrastructure.
Large businesses which want access must link their networks directly to
infrastructure backbone outside their community.
Some off-the-shelf hardware and software solutions are available locally,
but there are none or very few in the native language of the community.
Basic hardware and software are affordable for some citizens and small and
medium-sized businesses.
There are no distribution/sales points for ICT hardware/software within the
community.
ICT hardware and software are too expensive for all but large businesses
and a small minority of citizens and small and medium-sized businesses.
Hardware and Software
Mainlines take at least one month to be installed.
It takes over one week for reported mainline problems to be resolved.
There is a growing customer service ethic among service and support
providers, although it is not a priority for most. Some ICT maintenance
and technical support services are available.
A nascent software industry is present in the community, and there is a
growing number of hardware technicians, web designers and network
administrators.
Mainlines take at least six months for installation.
It takes over one month for reported mainline problems to be resolved.
Providers pay no explicit attention to customer service.
A small community of software developers, web designers, network
administrators and other technical personnel exists.
Telephone mainlines take at least four years to be installed from the time
their orders are placed.
It takes over six months for reported mainline problems to be resolved, if
ever.
Very few or no software developers, programmers or computer technicians
are present in the community.
Service and Support
HARVARD e-DEVELOPMENT READINESS GUIDE
50-70% of domestic telephone calls are successful.
Dropped connections are frequent and extremely disruptive.
For voice telephony, sound quality is acceptable for regular conversation.
Between 50 and 100 faults are reported per year for each 100 mainlines.
The telecommunications infrastructure in most areas of the community supports dial-up modem transfer speeds of 9.6 Kbps or less. Some areas may
support speeds of 14.4 Kbps.
Large businesses and ISPs can link their networks to a local infrastructure
backbone, but backbone capacity is frequently inadequate to support user
demands.
Packet loss is significant and regularly disruptive for any on-line activities.
Most ICT products are sourced from abroad, but there is a strong and growing localization industry to adapt products to local needs.
Some software appropriate to local needs and languages is available.
A variety of hardware and software solutions are available and affordable
to most small and medium-sized businesses, as well as many individuals.
Mainline installation is usually completed within a few days.
Service providers can be contacted in a number of ways (e-mail, telephone, mail). Reported problems are usually resolved within 48 hours. Online help is available and may allow for immediate resolution. Customer
service is considered a source of competitive advantage for the service
provider. ICT maintenance and technical support are widely available.
A competitive and sophisticated web design market exists, incorporating
the latest development technology.
APPENDIX E
70-90% of domestic telephone calls are successful.
Connections are dropped with noticeable frequency and are somewhat disruptive.
Fewer than 50 faults are reported per year for each 100 mainlines.
Users have access to dial-up modem transfer speeds of up to 28.8 Kbps.
Leased lines with transfer speeds of up to 64 Kbps are widely available for
businesses and ISPs. Limited higher-speed lines are available in some areas.
Backbone facilities serving the community are usually sufficient, although
regular peak demand periods result in slower network response times.
Packet loss by the network may occur but is not generally disruptive.
A vibrant marketplace exists for software and hardware with a competitive
retail and wholesale market for these products.
Hardware and software appropriate to local needs and languages are widely available and affordable.
Network Speed and Quality
Dropped connections are fairly infrequent and not a major disruption.
Over 90% of domestic telephone calls placed are successful.
Fewer than 10 faults are reported per year for each 100 mainlines.
There is widespread access to dial-up modem transfer speeds up to 56 Kbps,
with some access to high speed solutions such as DSL, cable modems and
wireless media.
High speed services of 1.5 Mbps are common, with higher speeds available
in some areas.
Adequate backbone capacity exists to support community needs without
significant transmission delays except during infrequent periods of high
demand.
Packet loss by the network is below 10%.
Stage 1
Stage 2
Stage 3
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Stage 4
APPENDIX E
ony and ISP services. In communities where the sum of ISP and telephony fees is prohibitively high, a disincentive to network usage exists, and access is curtailed. Pricing
packages can be structured in ways that are conducive to Internet usage – per minute
or hourly pricing (unlike flat rate pricing) for both Internet and telephone service can
limit users’ time on-line and therefore inhibit the use of the network for many activities such as electronic commerce (e-commerce). The provision of tiered pricing packages can improve the affordability for many subscribers by allowing them to purchase
only what they need.
Network Speed and Quality. The available bandwidth, both for individuals’ local
access and for a community’s connection to the Internet backbone, determines the
number of users and types of on-line activities the network can support. Bandwidthintensive activities, such as large file transfers or video streaming, may be unavailable
to communities with constrained access to the network. The quality of the network,
including servers, also determines its usage. High numbers of mainline faults, poor
connections, dropped connections and packet loss can render any network useless or
operationally sub-optimal, thus discouraging use of and investment in new technologies.
Hardware and Software. A vibrant market with numerous hardware and software
options can encourage more specialized usage of the network, including ICT solutions that are tailored to local needs. More widespread retail and wholesale distribution channels for both hardware and software increase opportunities to use the network within the community. The prices of hardware and software are particularly
important in the developing country context, where generally low-income levels cannot support high-priced consumer items.
Service and Support. A strong customer service orientation is important in determining the success of network deployment. Long waiting periods for installation and
repair and a lack of support services by telephone companies and Internet providers
pose major obstacles to Readiness. The quality and number of technical support professionals are essential in maintaining the network and providing service.
Transport Infrastructure, Distribution Channels,
Electricity and Local Conditions
There are a number of factors that are important for economic development in general that deserve special mention because they can play a crucial role in Networked
Readiness.
• Where information technologies facilitate the buying and selling of tangible
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HARVARD e-DEVELOPMENT READINESS GUIDE
•
•
Particularly in the developing world, the reliability and cost of electric power
must be considered carefully in light of Readiness. The one billion people globally who do not have electricity consequently face tremendous challenges in
Networked Readiness terms.
Local distribution networks can also influence Readiness. The nature and quality of delivery channels are determined by a variety of factors (e.g. postal services, private shipping services, warehousing, licensing and permits). Each of
these factors can pose certain limitations on the movement of goods that
accompanies the growth of commercial activity associated with information
and communication technologies. Inefficient customs services can also be an
impediment in this respect.
goods, the non-ICT infrastructure in a community is essential in enabling
Readiness. The availability and efficiency of traditional physical transport
infrastructure such as roads, railways, ports and airports are extremely important for the movement of ICT equipment and of ICT-facilitated trade in goods.
•
Proper functioning of ICT equipment is also dependent upon local conditions
that may affect how the technologies perform – factors such as heat and
humidity (especially where air conditioning is rare or unattainable), dust or
exposure to other elements can render many information and communication
technologies unusable.
The Promise of Wireless Communications
•
•
Avoids potential problems and costs related to theft of copper wire and other
equipment.
Faster activation of individual connections than in fixed line systems. This
cuts down on subscriber waiting lists for access to the network.
Lower cost and less time to deploy the infrastructure than traditional fixed
lines.
In the context of the developing world, wireless telecommunications hold great
promise for overcoming many deficits of infrastructure and access. There are many
advantages to wireless technologies that make them well-suited for extending existing networks.
•
•
Mobile wireless offers convenience and flexibility to the user.
APPENDIX E
•
Global experience suggests that the rollout of wireless networks can accelerate
competition in the telecommunications market, leading to faster rates of innovation, rapidly declining prices, faster network growth and better service quality.
•
•
Improvements in human interface technology, including voice recognition,
may also lead to simpler, easier-to-use devices that will be more accessible to a
broader population.
With increasing availability of mobile data applications, hand-held devices
should become a good substitute for traditional access to data, removing the
need for larger, mor e expensive personal computers.
Currently there are limited data applications for mobile wireless. However, as thirdgeneration hand-held devices come on to the market, and the deployment of broadband wireless becomes a more cost effective market solution, there will be even more
opportunities to extend productive connectivity throughout the developing world.
•
Innovative solutions for extending access become available with the declining
cost and increasing power of hand-held devices. These include the development of “disposable phones,” or pre-paid plans with extremely low-cost telephones.
HARVARD e-DEVELOPMENT READINESS GUIDE
NETWORKED LEARNING
W
ithout an educated, ICT-savvy populace, no community can fully participate in
the Networked World. To foster this resource, information and communication
technologies must be incorporated into the learning system. Lamentably, although the
use of ICTs in education is one of the most powerful catalysts to Networked Readiness,
it is an opportunity that is often squandered, misunderstood or underestimated.
Schools’ Access to Information and Communication Technologies. Schools must integrate ICT tools into their learning processes if they are to be part of the Networked
World. Programs that give students access to information and communication technologies in the classroom provide an important step to improving Readiness. A school’s
Readiness in terms of access can be broken down into six broad areas: number of computers, physical access to the technology, types of computers, diffusion of the network,
access to and organization of electronic content, and quality and speed of connectivity
in the school. In general, the diffusion of information and communication technologies is driven by unit cost per pupil. Computers tend to be adopted first at the university level, then by the secondary school system, and finally by primary schools.
Enhancing Education with ICTs. While putting ICTs into schools is an important first
step to Readiness, the technologies need to be properly harnessed to improve the
learning process. Teachers must be trained to use the Internet and computers as tools
for the students’ benefit; this training is central to Readiness. Curricula must be
redesigned to encourage the use of ICTs in the pursuit of problem solving, group
learning and research. Students should be taught from the earliest age possible to use
information and communication technologies to enhance and improve their learning experiences. Full integration of ICTs into the learning process is optimal, and collaborative, project-based learning can make up a solid pedagogical strategy for ICTenhanced education.
Developing the ICT Workforce. It is essential that there exist opportunities within the
community to offer future ICT workers both first-time and continuing training in
essential skills such as software programming, hardware engineering and World Wide
Web design. These opportunities are fundamental to creating a sustainable ICT industry and support the integration of ICTs into the local economy.
Illiteracy and ICTs. While cutting-edge digital media do extend the usability of the
Internet, it is still largely a text-driven medium. Illiteracy seriously limits the ability
of many communities to utilize computers and on-line resources, particularly in the
developing world, where illiteracy rates can be quite high.
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HARVARD e-DEVELOPMENT READINESS GUIDE
There are no computers in schools.
Only a few teachers use computers in a very limited fashion. Teachers' basic
computer literacy involves skills such as use of the keyboard and mouse, a
basic understanding of the computer's operating system, manipulation of
files, and cutting and pasting.
Computers are mainly used at the university level.
Computers are not used by any teachers or students.
Technical classes and programs on ICT-related subjects are available from
a variety of public and private centers.
Some limited on-line access to training is available.
Some employers offer training in the use of information and communication technologies to their employees.
There are limited opportunities for training in ICT skills development.
Training opportunities for programming, maintenance, support, Web
design and other ICT professions are virtually non-existent.
Developing the ICT Workforce
Where there are ICTs in schools, it is primarily at the university level, and
there are generally fewer than five computers in a school or faculty.
Access to the computer(s) is limited to computer teachers and/or administrators.
Computers tend to be older generation models, such as stand-alone 486
PCs or the equivalent.
Where there are multiple computers installed, they are not networked.
Use of the computer(s) is limited to electronic documents that are available
on the hard drive or diskettes.
There may be connectivity for store-and-forward e-mail.
Teachers and students use computers to support traditional work and study.
Teachers who use computers are generally proficient with word processing
applications and may access information offline from CD-ROMs. They may
employ computers in some basic drill-and-practice lessons.
In some cases, teachers access and organize information from the World
Wide Web in their work, share information using e-mail, and create information in electronic format to share with others both inside and outside the
school.
There are many technical schools with specialized curricula in information
and communication technologies and computer science.
There are a variety of training opportunities relating to information and
communication technologies available through vendor certification programs, employers, educational institutions, private training centers and
distance learning courses.
On-line resources and courses are widely available for the development of
technical skills.
Enhancing Education with ICTs
Computers can be found at the university level as well as in primary and
secondary schools.
Up to 10 to 15 computers can be found in laboratories for classroom group
work, with about four students per computer.
Computer labs are generally only open for computer studies during the day
and closed after school, or may be open to teachers for class preparation
but closed to students.
Computers tend to be older generation models, such as 486 PCs or higher,
and they may be networked with a file and mail server.
There may be an internal Local Area Network (LAN) in place. If there are
multiple computer labs, they may be connected through the school network.
Where there are stand-alone PCs, they may have a limited CD-ROM library.
The networked lab achieves connectivity through a dial-up connection to
the Internet, which supports limited World Wide Web access.
Information and communication technologies are fully integrated into the
curricula, are used in the classroom and are essential to the learning
process. The curricula may feature collaborative, project-based learning
activities that enable students to use the Internet and advanced software
skills to work with other students and teachers in their school, outside their
community and internationally.
Teachers are well-trained in methods for incorporating computers and ICTs
into their instruction and curricula.
School’s Access to ICTs
Most schools at all educational levels have access to computers.
There may be a number of computer labs in each school, and computers
may be found in the classroom. In some cases, students and teachers may
have individual laptop computers.
Computer labs are open to students and reserved for subject matter classes
to use, and are open after school hours. The lab may be open to the community and other schools after school and on weekends.
There may be an internal Web server on the school network — computers
as well as other devices are connected to the network.
Classrooms may be wired and connected to the school's Wide Area Network
(WAN). Clusters of schools may be connected to a regional WAN to share
electronic resources. A national school network may be in place.
Connectivity may be obtained through a leased line or wireless connection
with at least 64 to 128 Kbps of dedicated access.
Stage 1
Stage 2
Stage 3
Stage 4
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APPENDIX E
NETWORKED SOCIETY
R
eadiness depends upon the community’s incorporation of information and communication technologies into the fabric of its activities in order to maximize the
gains of joining in the Networked World. In society-at-large, ICTs can have a profound effect upon people’s professional and personal lives by providing easier access
to information, more efficient ways to communicate and powerful organizational
tools. To understand how a community is using ICTs, it is important to assess not
only how many members of the community have access to the technologies, but also
how they are using them.
People and Organizations On-line. One of the hardest indicators to track is the actual number of on-line users. Particularly in the developing world, where multiple users
share many electronic mail (e-mail) accounts and other on-line tools, there are few
reliable indicators that accurately map how many people are on-line. The exponential growth in on-line usage also makes tracking current use difficult. This is nevertheless an important indicator. As more people access the Internet regularly, and networks of users grow, there is greater demand and opportunity for on-line interaction,
as well as better meshing with the Networked World at-large. As more organizations
gain an on-line presence, it becomes more likely that the community will use information and communication technologies to augment or carry out its activities and
needs. One of the most important drivers of on-line growth is awareness – people
must first know and understand what the Internet is in order to participate. Particular
attention should be paid to the demographics of Internet users in the community.
Particularly at lower stages of Readiness, groups such as women, the physically disabled, and racial and ethnic minorities often do not participate in the on-line environment. A community is more Ready when there are not large discrepancies in online presence among different groups.
Locally Relevant Content. Community members find the Internet medium more useful and relevant to their own lives when on-line content reflects their own interests
and needs. Locally relevant content is a major driver of growth of Internet usage.
Interactions such as chat rooms, on-line interest groups, special interest software, bulletin boards, listservs and websites all drive the community to use ICTs more widely
in their lives. Similarly, on-line content is more relevant when it is available in local
languages. English language dominance on the Internet remains a serious impediment to the world’s non-English speaking communities. While the preponderance of
English is waning, and other world languages are gaining, most of the world does not
speak a language that is strongly represented either in software or on the World Wide
Web.
HARVARD e-DEVELOPMENT READINESS GUIDE
Information and Communication Technologies in Everyday Life. Communities participate more directly in the Networked World when information devices, such as
radios, faxes, televisions, telephones, pagers and computers are culturally accepted
and widely incorporated into daily life. It is important to examine both penetration
of ICT devices into a community and their applications. In communities where either
income levels or the network infrastructure cannot support high levels of individual
access, public shared facilities provide a needed alternative. Such venues may include
telecenters, cyber cafés and community information centers. Strategies for drawing
people in to use these facilities are essential.
Information and Communication Technologies in the Workplace. The more that business and government offices are already using information and communication technologies, the better prepared they are to participate in the global networked economy. In order to realize important efficiency gains from ICTs, businesses and governments need to not only make technologies available to their employees, but also
effectively incorporate them into their core processes.
81
People and Organizations On-line
No websites exist providing information on local topics.
Few or no websites are available in local languages or
a dominant Web language spoken locally.
Locally Relevant Content
Information and communication technologies (telephones, fax machines, pagers, computers) are used to
a limited degree by some members of the community.
Public telephones are available in some parts of the
community and are used regularly b y many community members.
Personal computers with e-mail capability are made
publicly available by some businesses, but most users
are from outside the community (e.g. tourists and visiting business people).
Members of the community do not normally employ
information and communication technologies in their
daily lives. Most social communication is paper based
and/or oral.
Organizations achieve some efficiency gains through
some degree of deployment of ICT systems in their internal workings.
Many computers in business offices are internally networked for data processing, management reporting, and
other enterprise applications.
Some employees conduct research and business transactions over the Web, though most often they use a shared
workstation to do so.
Some employees use e-mail for internal communications.
Organizations achieve sporadic efficiency gains through
limited deployment of ICT systems in their internal workings.
Some employees have access to telephones.
Few offices have computers that are networked for internal file sharing and basic enterprise applications.
In offices where there are computers, only some employees use them for their work, though not for electronic
communications.
Employees have limited access to telephones.
A small minority of business and government offices
have at most a few computers, none of which are networked.
Most business communication takes place in person or
by mail. A small number of businesses use telephone and
fax.
HARVARD e-DEVELOPMENT READINESS GUIDE
Most of the population has never heard of the
Internet.
Less than 0.05% of the population has used the
Internet at any time during the past three months.
No business entity in the community has a registered
Internet domain name.
Few websites covering local topics exist, and most of
them are created and hosted outside the community.
Some websites are available in local languages or a
dominant Web language spoken locally.
There is little use of on-line bulletin-board systems,
Usenet groups, newsletters, and/or listservs.
Public telephones may be found in most parts of the
community and are heavily used.
Some members of the community have Internet access
at home.
Growing numbers of community members use telecenters, cyber cafés and other businesses that offer computer use and on-line services to the public for a fee.
Organizations achieve major efficiency gains through
widespread deployment of ICT systems in their internal
processes.
Computers in offices are fully networked. Different office
locations are connected to each other through external
networks. These networks may extend nationally or
internationally.
Most employees have Internet access from their own
workstations.
Most employees have their own e-mail accounts for
internal and external communications.
Workers commonly list their e-mail and website addresses on their business cards.
APPENDIX E
Much of the population has never heard of the
Internet, and most people do not know anyone who
has ever used it.
Less than 0.5% of the population has used the
Internet recently, and few are regular users.
Some local businesses and institutions have registered
domain names. There are fewer than two of these
domains per 1000 inhabitants.
There is no advertising in traditional media for on-line
companies or resources.
Some local websites are available, though most carry
static content and are updated infrequently. Websites
carry diverse types of information relevant to different
groups within the community.
Many websites are available in local languages or a
dominant Web language spoken locally.
There is some use of on-line bulletin-board systems,
Usenet groups, newsletters, and/or listservs.
There are opportunities for Web-related training,
although they may be expensive and accessible only in
certain areas.
Many members of the community use information and
communication technologies (wireless phones, digital
assistants, pagers, personal computers) to assist in their
personal lives.
Many members of the community use information and
communication technologies for household commerce
(on-line shopping, banking, investing) and for a variety
of social and commercial interactions with other people
(including bartering, consumer-to consumer trade, online chat).
Citizens without access through home, school or work
use a variety of public and private Internet access options, including on-line cafes and community centers.
ICTs in the Workplace
Most of the population has heard of the Internet,
although few have used it.
Less than 10% of the population uses the Internet regularly.
The overwhelming majority of Internet users are males
between the ages of 10 and 35.
The number of registered domains locally is at least 2
per 1000 people.
Advertising in traditional media for on-line companies
or resources is infrequent.
Many websites provide dynamic information on local
topics and are updated at least several times per week.
Local content is generated by citizens at all levels of
society, including websites and on-line bulletin-board
systems, Usenet groups, newsletters, and/or listservs.
A significant amount of information is available
through websites in local languages or a dominant
Web language spoken locally.
Many affordable opportunities exist for Web-related
training.
ICTs In Everyday Life
Most of the population is interested in using the
Internet and knows others who do.
At least 10% of the population accesses the Internet
with some regularity.
Males between the ages of 10 and 35 no longer represent the overwhelming majority of Internet users.
The number of registered local domains is at least 20
per 1,000 population.
Advertising in traditional media for on-line companies
or resources is fairly common.
Stage 1
Stage 2
Stage 3
Stage 4
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NETWORK POLICY
HARVARD e-DEVELOPMENT READINESS GUIDE
NETWORKED ECONOMY
P
APPENDIX E
B
There are a number of policy issues surrounding the Internet and electronic commerce whose stages of resolution are not clear, but which must be considered for their
profound impact upon Networked Readiness. In general, policies which ensure legal
certainty, security and consumer protection for on-line transactions and interactions
should be enacted. These include the resolution of issues such as transactional security, electronic contract enforceability and the authentication of individuals and documents. In dealing with issues such as Internet taxation, on-line privacy and intellectual property rights, the following guidelines should be followed:
Ongoing Public Policy Challenges
ICT Trade Policy. Information and communication technologies become more available
and affordable when there are low barriers to trade, including tariffs on ICT equipment
and software, and electronically ordered or delivered goods and services.
Telecommunications Regulation. Effective regulation should promote competition,
ensure affordable pricing for consumers and maximize telecommunications access in
the community. Liberalization within the telecommunications sector should establish a regulatory framework that encourages multiple carriers to operate competitively. As more operators enter and compete in the marketplace, service offerings become
more accessible and affordable, are deployed more rapidly and reach higher levels of
quality. At the same time, regulation should encourage universal access to telecommunications services.
ublic policy can be a help or a hindrance to the networked economy. The favorable climate that public policy can create for Internet use and e-commerce
encourages communities, organizations and individuals to invest in and use information and communication technologies. Important aspects of Networked Readiness
dealt with elsewhere in the Guide (such as Internet availability and affordability,
hardware and software availability and affordability, ICTs in schools and electronic
commerce) are all influenced by public policy. For a community to become ready for
the Networked World, the appropriate policy-makers must realize the implications of
their decisions upon ICTadoption and use.
usinesses and governments that are able to effectively employ information and
communication technologies find more sophisticated and efficient ways of managing their external relationships and communications. This growing ICT usage helps
form the critical mass of electronic transactions which supports a networked economy, both in terms of the network size and the demand for associated goods, services,
labor and policy reform.
ICT employment Opportunities. A thriving job market for ICT professionals provides
added incentive for growth of ICTadoption, training programs and overall use of
information and communication technologies within the economy. The retention of
technical workers becomes an important competitiveness issue for the community.
Business-to-Consumer (B2C) Electronic Commerce. On-line retail options enhance
consumer choice and access to products. They also allow businesses to reduce costs
associated with physical infrastructure and to augment their marketing outreach and
public relations via a dynamic communications channel.
Business-to-Business (B2B) Electronic Commerce. When businesses move their dealings with other businesses on-line, they can often communicate more easily at lower
costs, hold smaller inventories, and process billings and payments more quickly,
among other advantages. Moreover, networked businesses are likely to explore new
business models, including dynamic business partnerships and radical market restructuring.
E-Government. Governments can take advantage of information and communication
technologies to improve connections with their constituents, including using the
Internet to post information on-line and to offer interactive services for the public.
Governments can also lead by example and become a catalyst for the networked
economy by investing in information and communication technologies for their
internal use, leading to more efficient operations and the creation of a local market
for ICT equipment and services. Relationships with government contractors and procurement mechanisms can be streamlined by putting them on-line. ICTs can make
government activities more transparent to citizens and other observers.
•
Internet tax policy should neither penalize the on-line trade of goods and services vis-à-vis traditional commerce nor inhibit the growth of electronic commerce.
83
HARVARD e-DEVELOPMENT READINESS GUIDE
Few, if any, local businesses hire workers on the basis
of their technical background.
Some local businesses operate websites. The basic
information they provide is static and infrequently
updated.
Some businesses accept orders placed by telephone or
fax.
Some businesses distribute hard-copy catalogs for
remote browsing of goods and services.
No businesses in the community operate websites.
There is little awareness of on-line business, and all
dealings between businesses and consumers consist of
oral and/or paper-based transactions.
The deployment of electronic systems has increased
efficiency and transparency and lowered transaction
costs in B2B interactions.
Some B2B transactions are supported by electronic systems (e.g. proprietary systems and databases), but
some paper-based transaction (e.g. signature) is usually required at some point.
Electronic B2B transactions are a small percentage of
overall B2B commerce.
B2B interactions remain inefficient with little transparency.
Faxes and telephones are commonly used to facilitate
orders or for remote client support, although some
paper-based transaction (e.g. signature) is required.
Businesses have few sources of market information.
The efficiency of most B2B interactions is hampered by
this lack of transparency, as are prospects for new business opportunities.
B2B transactions are carried out in person or remotely
through paper-based transactions.
All governmental agencies post key information on websites and some have incorporated the Web into their
strategy for interaction with the public.
Interactive government websites allow the public to conduct transactions (e.g. apply for permits, pay taxes) online.
Much government procurement and many interactions
with suppliers take place on-line or with other electronic
mediation.
Some governmental agencies post key information on
websites, including directories of services, hours of operation, and downloadable forms. Information is often not
kept current and relevant. Transactions take place primarily in person, by fax or by telephone, though electronic mail may expedite the process.
The government manages relationships with some contractors and suppliers on-line or with other electronic
mediation.
A few governmental websites exist, providing basic information, often directed at parties outside of the community. This information is static and infrequently updated.
Some limited interaction with the government is possible
by telephone or fax.
The government distributes some information about
services, procedures, rights and responsibilities in hard
copy.
No government resources are on-line.
There is no awareness of on-line government, and all
dealings between government and citizens or businesses
are in person or paper-based. There is limited information available by phone.
E-Government
Although there are some employment opportunities
that call for technical skills, most workers with ICT
experience either must leave the community to find
employment or are unable to find work in their field.
Many businesses post key information on websites.
Information is often not kept current and relevant.
Websites provide information on goods and services for
sale. Purchases take place primarily in person, by fax or
by telephone, though electronic mail may expedite the
process. Some businesses may have introduced on-line
ordering.
Many efficiencies in B2B transactions are apparent as
a result of the deployment of electronic systems. These
efficiencies have changed market structures and redefined industry practices.
Many businesses have incorporated the Web into sales,
procurement and inventory management. Some transactions occur on-line over automated, fully-integrated
systems.
Order processing and delivery may be executed electronically and monitored through on-line tracking systems.
Overall levels of electronic B2B transactions are a
noticeable and growing percentage of total B2B transactions within the community.
B2C Electronic Commerce
Technical skills in the community are becoming a
source of competitive advantage and are beginning to
attract investment and employment opportunities by
companies from outside the community.
Many businesses in the community have incorporated
the World Wide Web into their sales, marketing, and
customer service systems.
The total volume of on-line retail is a noticeable component of the community's commercial activity, as may
be evidenced by advertisements for commercial websites in traditional media and other indicators.
B2C Electronic Commerce
A significant number of employees in the community
require technical skills to perform their jobs.
A sizeable portion of the community's economy is
based on the management of and trade in information, employing a large number of “knowledge workers.”
Information and communication technologies are
considered central to the strategies of many organizations.
ICT Employment Opportunities
APPENDIX E
84
Stage 1
Stage 2
Stage 3
Stage 4
APPENDIX E
Telecommunications Regulation
ICT Trade Policy
Trade barriers for ICT equipment have been reduced,
but are still relatively high.
There has been some opening in service sectors related to electronic commerce and ICT networks.
Foreign direct investment is allowed in network sectors under certain conditions.
Stage 1
Plans for the liberalization of telecommunications
services are in place or are being formulated.
Provisions for universal access to services have been
established, though they are ineffective.
Trade in ICT equipment is not restricted through
unnecessary standards or licensing requirements,
and tariffs are low and uniform.
The community has at least temporarily agreed not
to apply disproportionate tariffs on electronically
delivered products.
There has been significant opening in services that
facilitate electronic commerce and building and
operations of ICT networks, but some restrictions
remain.
Foreign direct investment in the ICT sector is
encouraged with some restrictions.
Trade in equipment for information and communication technologies is impeded by high tariffs and
other restrictions, including cumbersome technical
standards or licensing requirements.
Service sectors are not open to trade, creating a
barrier for electronic commerce and the building
and operation of ICT networks.
Domestic regulations may create de facto trade
barriers for ICT use.
There is little or no foreign direct investment.
Plans for the liberalization of the telecommunications sector are in place and are being implemented.
Progress is being made in achieving universal access,
but there are many hurdles in implementation.
Services such as data, paging and mobile telephony
are available from competing private providers.
Alternative carriers compete for private network services, leased lines and other telecommunications services for businesses.
Incumbent provider networks are being opened to
competition through interconnection and/or
unbundling obligations.
If tariffs exist on ICT goods, they are low and uniform.
Trade in services is fully liberalized, including services delivered electronically.
The community has explicitly affirmed that it will
not apply disproportionate tariffs on electronically
delivered products.
Foreign investment in the ICT sector is encouraged
and subject to few or no restrictions.
There are no plans for the liberalization of the community's telecommunications sector.
There are no regulatory provisions which promote
universal access to telecommunications services.
All services are provided by a single operator,
whether private or state-owned.
Voice and data service offerings are limited.
The telecommunications sector has been liberalized,
with a regulatory regime in place to promote open
competition.
Regulation is effective in promoting universal access.
An independent regulatory body sets and enforces
telecommunications regulations.
Citizens and businesses have a number of options for
their telecommunications and data services.
Incumbent networks have been opened to competitors, and new competing carriers are taking advantage of these arrangements to offer services.
There is vibrant competition among mobile wireless
providers. Spectrum has been allocated consistently
with international standards, and licensing arrangements encourage new market entrants.
The provision of value-added services such as broadband Internet is recognized as a source of competitive advantage.
•
Measures should exist that safeguard the privacy of end-users in the community.
HARVARD e-DEVELOPMENT READINESS GUIDE
•
The question of how to address intellectual property rights in a policy framework must be carefully addressed. Words as speech, property and contract
should be appropriately considered in any legal framework.
To resolve all of these issues, an appropriate mix of government regulation, marketbased solutions and industry self-regulation should be put in place which considers
both consumer and business interests.
The Business and Economic Environment
Stage 2
•
•
•
•
•
•
•
•
•
•
•
regulations and restrictions on small business
access to start-up capital
entrepreneurial culture
access to credit
credit card processing protocols
credit card usage
restrictions on capital flows
convertibility of local currency
openness to foreign direct investment
soundness of economic and monetary policies
predictability of the legal environment
perceived political risk
Use and deployment of information and communication technologies is largely
being driven by the private sector. Accordingly, the overall business climate of a community, while affecting diverse development concerns, is of particular importance
with regard to Networked Readiness and electronic commerce. The following factors,
often influenced or determined by national policy, should be considered:
•
Stage 3
85
Stage 4
APPENDIX E
WHAT NEXT?
T
•
Communities at lower stages of Readiness can get ideas for improvement from
the higher stage indicators. It is important to note, however, that the path
from Stage One to Stage Three does not necessarily lead through Stage Two.
Indeed, the absence of ICT development within a particular community may
present unique opportunities for rapid ICT adoption and a “leapfrogging” of
stages of Readiness.
•
A close working relationship between business and government is critical.
HARVARD e-DEVELOPMENT READINESS GUIDE
•
ICTs are constantly becoming more powerful and less expensive. Applications
that may be prohibitively expensive in the present may prove to be quite
affordable in the near future.
The on-line Guide contains further resources to aid in assessing Readiness.
Please visit the on-line version of the Guide on the World Wide Web at: http://www.readiness guide.org
International Development at Harvard University.
For more information on the Guide, please contact the Information Technologies Group (ITG) at the Center for
sarahbdesign
http://www.sarahbdesign.com
sarahbdesign
Graphic Design by:
http://www.ibm.com/solutions/government/readiness
e-mail: [email protected]
Bethesda, MD 20817 USA
6710 Rockledge Drive
Attn: Networked World Readiness
International Business Machines Corporation
With the support of:
http://www.cid.harvard.edu/ciditg
e-mail: e-Development@readiness guide.org
Cambridge, MA 02138 USA
79 John F. Kennedy Street
Information Technologies Group
The Guide was prepared by:
•
Reaching Stage Four does not mean a community is finished; there is a need
for continual improvement, especially in light of the speed with which ICTs
and their applications develop and change.
he results from the Readiness assessment act as the starting point in a participatory planning dialogue. They should heighten awareness of the opportunities and
challenges of joining the Networked World.
A planning process should be undertaken as a true partnership among business,
government and other members of the community. The process should encourage
but not require participation from the whole community. Participants should be key
stakeholders that might include local carriers (incumbent and competitors), ISPs,
high-tech companies, business users, appropriate government officials, educators,
universities, bankers and community groups.
Just as the other components of Readiness have been assessed, the nature and
progress of the planning dialogue that is currently underway within the community
should also be carefully understood. This is valuable whether a plan has already been
put into action or if there is not yet any planning underway.
•
Preparing people is at least as important as preparing the technology they will
use.
Center for International Development at Harvard University
•
The importance of education in Readiness cannot be overestimated – a heavy
emphasis upon incorporating ICTs in the educational system can yield
tremendous long-term benefits by investing in the future Readiness of the
workforce, society and economy.
The following concepts should be kept in mind during the planning dialogue:
•
Each community must decide its own priorities and resource allocation to get
Ready, but it should be careful not to sacrifice long-term gains for short-term
benefit.
86