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Reuters
Reuters
Business
By Thomas Escritt

Ukrainian telco Kyivstar digs in to win the war of words

FILE PHOTO: The logo of Kyivstar, one of Ukraine's largest telecoms company, is pictured at the company's headquarters in Kiev, Ukraine, March 3, 2016. REUTERS/Gleb Garanich

In a single hour, as a volley of Russian missiles wrecked homes, power stations, factories and playgrounds across their country, Ukrainians placed a record 67 million minutes of calls on Kyivstar's phone network.

"People are nervous and they are taking care of each other," Kyivstar's Chief Executive Oleksandr Komarov told Reuters in an interview. Normal evening peak traffic is around 50 million minutes.

It's not just about the human need to communicate. In a war being waged in the information space as well as on the battlefield, the ability to spread news from the front fast is crucial.

Mobile phone videos of Ukraine's early successes in rebuffing Russia's attempts to seize Kyiv in February were crucial in persuading hesitant Western governments to unlock military aid, analysts say.

Kyivstar's call record was set in the small hours of Oct. 11 when Russia, after a series of military setbacks, switched to a strategy of strikes deep in Ukrainian territory, destroying 30% of electricity generating capacity.

Data volumes are also up 30% year-on-year, even as the devastation of the war has driven a million of its people abroad.

For Kyivstar, the biggest of Ukraine's phone operators, the battle is on to preserve communications.

Komarov said it is importing batteries and diesel generators to ensure at least some its base stations will have power during any outages.

It also needs to fend off cyberattacks, or DDoS (distributed denial of service) onslaughts on its network that have increased by 200% since the start of the war.

In this, Kyivstar has an advantage over Russian operators, which have been cut off by Western sanctions from suppliers that can provide software updates to protect from attacks.

HIGH COSTS AND RISING REVENUES

It also has also developed experience in adapting to extreme circumstances.

Kyivstar began preparing for a possible Russian attack last November, three months before Russian forces entered the country in what the West condemned as an imperialist land-grab, but Moscow says is a "special military operation".

As Russian forces massed on Ukraine's borders, the company spent tens of millions of euros on moving data centres and staff to relatively safe areas in the far west of the country.

That allowed it to run a full service in the town of Chernihiv even when it was cut off by surrounding Russian forces, with staff keeping generators fuelled to run 20 base stations compared to the 70 the town would normally have.

The surge in demand has not been as lucrative as it might have been as Kyivstar and rival operators introduced discounts at the start of the war to help people stay in touch.

Revenues were up 9.4% over the first half, at 15.2 billion hryvnia ($411.59 million), though soaring costs meant EBITDA (earnings before interest, tax, depreciation and amortisation) slipped 0.2% 9.4 billion.

Kyivstar plans to invest 1.5 billion hryvnia in rebuilding. Some 80% of its sites in areas from which Russia has retreated have been destroyed, with equipment looted or damaged beyond repair.

It has also contributed to the wider effort to rebuild.

Komarov was speaking via video call to announce a 150 million hryvnia donation to Ukraine's infrastructure fund to coincide with a Berlin conference on rebuilding the country.

The mental scars are even harder to repair.

Staff at the operator have been personally affected: 140 of its 3,600 staff were drafted into the army, one was killed, another is in Russian captivity, and one is missing.

($1 = 36.9300 hryvnias)

(Reporting by Thomas Escritt, additional reporting by Pavel Polityuk in Kyiv and Supantha Mukherjee in Stockholm; editing by Barbara Lewis)

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