20:35 15.10.2024

About 500 internet providers in Ukraine have decided to stop operating

3 min read
About 500 internet providers in Ukraine have decided to stop operating

The State Regulation of Electronic Communications, Radiofrequency Spectrum and the Provision of Postal Services (NCEC) received 487 applications for exclusion from the register of suppliers of electronic communications networks from August to October 8, of which 386 applications were processed, said MP Oleksandr Fedienko, head of the parliamentary subcommittee on cybersecurity, on Facebook referring to the regulator's response.

"After the State Tax Service of Ukraine began destroying small internet provider businesses, I became curious about how many entities providing internet access services would stop operating… The response [from NCEC] shocked me – 1,316 entities have exited the regulator's register, effectively ceasing to exist," Fedienko wrote on Facebook on Tuesday, backing up his assertion with a table broken down by region.

At the same time, NCEC representative Bohdana Piven pointed out to the MP that the indicator 1,316 was incorrect. "A total of 487 business entities applied for exclusion for the period August-October, but each of them provides services in more than one region," she said.

Fedienko suggested that some providers had ceased operations, some had gone underground, and others were selling their businesses.

The highest number of closures occurred in the city of Kyiv and Kyiv region (156) and Cherkasy region (108).

As of August 1, the NCEC register had 4,210 legal entities; as of October 4, included 4,155 of them.

According to NCEC, 3,443 operators reported providing fixed-line internet access services in the first half of the year. The figure of 3,500 providers was also mentioned by the Ukrainian Internet Association (UIA) and the head of the parliamentary finance committee, Danylo Hetmantsev.

The Better Regulation Delivery Office (BRDO), the Ukrainian Internet Association (UIA), the Ukrainian Agency of Copyright and Related Rights (UACRR), the Ukrainian Institute of the Future think-tank, the Ukrainian League of Industrialists and Entrepreneurs (ULIE) have issued a joint statement calling for "stopping the illegal actions of the State Tax Service (STS) and preventing the illegal cancellation of the simplified taxation system for Internet providers."

Following the round table titled "Ways to solve problematic issues of taxation of Internet service providers", the BRDO press service reported that at the beginning of 2024, there were about 2,672 providers using the simplified taxation system. They supplied services to about 3 million subscribers, institutions and organizations in Ukraine.

Fedienko previously reported that, as of October 1, the State Tax Service of Ukraine had annulled the registration dates of all fixed-line internet providers registered as sole proprietors.

Earlier, Hetmantsev stated that Ukrainian fixed-line internet providers could no longer operate under the simplified tax system after October 1 and would need to pay taxes on a general basis. He assured that service prices would not increase, dismissing concerns about potential price hikes as "cheap rumors."

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