The history of Datagroup goes back to 2000 when in the structure of the ICS holding the company Datacom was created. Since, according to Mr. Alexander Kardakov, the Head of ICS, at that time the growth of system integration sales was restrained by absence of certain telecommunication services, it was resolved to establish the data transmission provider Datacom.
Initially, the terrestrial network of Datacom was built as an integral part of other major integration projects of the holding.
The Datacom's first customer was "Aval" bank, for which modernization and deployment of the corporate network and IP-telephony was carried out, which connected the bank’s 630 branches. Notwithstanding the fact that the network was built on leased lines, it represented not the lines themselves, but the services. And today's main difference of Datagroup, as compared with other Ukrainian service providers, is that the company doesn’t provide communication lines – Datagroup provides line-based telecommunication services.
During the period of 2002 to 2003, Datacom completed deployment of data transmission network all over the territory of Ukraine and designing of core optic-fiber network in Kiev. Datacom provided its services in 51 cities of Ukraine, including all regional and large district centers. There were the following regional agencies established: The Western – in Lvov, the Southern – in Odessa, the Eastern – in Dnepropetrovsk and the Central Agency – in Kiev. By that time, Datacom competed successfully with such famous Ukrainian telecommunication market players as Infocom and Golden Telecom.
Later, in 2001, on the basis of CTC, a satellite mobile service provider, and its young but professional and ambitious team, in the structure of ICS Datasat was established, a fixed-line satellite service provider. At that time, two satellite service providers already existed in Ukraine: Ukrsat and Infocom-SK. According to the business-plan approved by the company management, it was planned to install 300 satellite stations during five years. However, the correctly chosen satellite service promotion strategy allowed much more. The success exceeded all expectations.
By the end of 2003, Datasat confidently establishes itself as the leader of the Ukrainian satellite communication market. In this period, the company successfully fulfilled the assigned tasks, i.e. it launched several major projects in fields of power engineering, banking, transport and logistics. On the basis of satellite data transmission technologies, corporate information networks for more than ten large companies were built.
As an example of successfully fulfilled projects of Datasat, setting into operation of a unique corporate governance system for Kharkovoblenergo JSC can be mentioned. Due to remoteness of energy facilities and underdevelopment of terrestrial communications infrastructure, the choice was made in favor of satellite corporate communication. Datasat’s specialists installed at the facilities of Kharkovoblenergo JSC 35 ground stations. Besides, over thousand automated workstations were created; structural cabling systems (SKS) were built in association’s three major control stations, and necessary extra equipment was installed. Among the system’s advantages, managers of Kharkovoblenergo JSC pointed out its inimitable flexibility and scalability: New energy facilities can be included into the corporate network within 2 days regardless of their remoteness.
Being the first company in the CIS and the second in Europe to have built a modern satellite communications control centre (HUB), Datasat has extended the network control centre with the up-to-date satellite equipment Hughes Network Systems DirecWay 6000. Thus, from the end of December 2003, Datasat began to provide for its customers new services based on the up-to-date DW 6000 equipment, in acquisition of which some million dollars were invested.
In May 2004, Mr. Alexander Kardakov resolved to consolidate two dynamically developing companies Datacom and Datasat under one trade mark “Datagroup”. The consolidation was mainly aimed at increase of amount of the services provided, their quality, flexibility, as well as introduction of new products. Moreover, it helped to avoid competition between the companies inside the corporation. This decision fully paid for itself. The group of communication companies – Datagroup – was formed which offered to the customers all-in-one service pack based on existing terrestrial and satellite communications technologies.
Under the group of companies, the joint sales department was established, as well as there were operation and implementation services combined, which had to significantly improve customer support quality.
First, the new-established trade mark was to result in increasing the amount of telecommunication services provided more than twice compared with 2003. The development plans of Datagroup proved to be absolutely correct.
In early 2004, the company put into operation 900 VSAT-stations of the Direcway network, and just two months later the operator connected its thousandth subscriber. According to the results of 2004, Datagroup turned to be the undoubted leader in terms of number of VSAT-terminal installations in the satellite communications segment. The company left far behind other national operators who had been present at the market for almost seven years.
In 2004, the number of companies in the telecommunications group Datagroup increased. Following successful activities at the retail communications services market in Kiev of a company, which also belonged to the sphere of interest of Datacom and Datasat shareholders, it was resolved to integrate the company into the telecommunications group Datagroup. The company was Krokus Telecom – a fixed-line telephony operator. At the same time, communications operator Call was overtaken and affiliated. As a result of the deal, Datacom, a part of Datagroup, extended its metropolitan segment of the all-Ukrainian terrestrial data transmission network more than three times. Due to inclusion of such a significant segment into its infrastructure, the group of telecommunication companies managed to considerably broaden the scope and the geography of its services in Kiev. Technically, the integration of capacities of Krokus-Telecom and Call into the Datagroup’s structure and their setting-up were projected and carried out in such way that the customer support of both companies was not interrupted.
A year later, according to the chosen strategy of Datagroup’s expansion in regions of the country, another two telephone companies, this time the regional ones – Remeks Telecom and Nikolayev Telephone Company – became members of the telecommunication group. The companies had licenses for construction of their own telephone network in Vinnitsa and in Nikolaev region, respectively. On the basis of these companies, own optic-fiber networks were developed.
Practically at the same time, the group of companies Datagroup was completed with a large Kharkov communications provider NPP Teleport SV Ltd. This operator led the group of companies that provide telecommunications services under the trade marks TelesportSV, Interport and Traffic and possess an optic-fiber SDH data transmission network, which covers all districts of Kharkov, with aggregate bandwidth of 622 Mbps.
The Kharkov group companies provided services of telephony, Internet connections, designing of trunk and international data transmission lines, as well as banking communication: SWIFT, Reuters, Western Union, Sprint, UPC, and FSTS (the First Stock Trading System).
Due to affiliation of the said companies, the group of telecommunication companies Datagroup increased the capacity of its own all-Ukrainian optic-fiber data transmission network and extended its presence in eastern regions of the country.
According to the results of 2005, the group of telecommunication companies Datagroup combined seven communication operators – Datasat (all-Ukrainian satellite data transmission operator), Datacom (all-Ukrainian terrestrial data transmission operator), Krokus-Telecom (telephone communications operator, Kiev), Call (optic-fiber communications operator, Kiev), NTC (telephone communications operator, Nikolayev), Remeks Telecom (telephone communications operator, Vinnitsa) and TelesportSV group (Kharkov).
According to the results of the ranking “TOP 100: The Ukraine’s Most Dynamic Companies", Datagroup had been already twice acknowledged as the most fast-developing communications operator in Ukraine.
In 2005, Datagroup once again succeeded to almost double its turnover up to 17.7 million USD. As of December 7, 2005, the total number of Datagroup's employees was 372. The volume of capital expenditures in business development quintupled, compared with 2004, up to 16.4 million USD.
Taking into account the progress of the telecommunication group Datagroup, the company management made in the end of 2005 a strategic decision to reorganize the group of companies into Datagroup CJSC. The company firmly established itself as the leader in the corporate segment of professional data transmission in Ukraine. Most large Ukrainian banks, industrial enterprises, retail trade networks and state structures became Datagroup's customers.
In 2005, Datagroup updated its satellite network. New multimedia satellite communications systems DirecWay 7000/7700 were put into operation. Due to them, the data transmission rate of the reverse channel increased to 1 Mbps. By the end of the year, Datagroup, exceeding its connection plans, had installed the three-thousandth VSAT-station.
In June 2005, Datagroup introduced to the Ukrainian market a new trade mark - "InternetBoom" TM. The service means the high-speed two-way satellite Internet. This service is a perfect alternative to terrestrial leased lines and provides Internet access in any spot of Ukraine exclusively via a satellite data transmission channel.
Based on these technologies, Datagroup has established a unique scope of telecommunications services for banking and industrial sectors, business and state organizations, as well as educational institutions, all over the country:
As an example of Datagroup’s unique capabilities, the services for financial sector can be mentioned, namely prompt connection of mobile ATMs and POS terminals, at uniform rates and irrespective of customer’s geographical location.
Today, the Datagroup’s unique status at Ukrainian telecommunications market relies on four positions that were initially built into the chosen business model.
First of them is the use of innovation techniques. Datagroup makes solid investments in its development and selection of new technologies. So, for example, in 2005 the company constructed the DWDM network. After holding a tender, the company chose a rather spending CISCO solution. This offered a certain risk for Datagroup, since CISCO was an absolutely new and untested technology. As the result, it paid for itself.
The next example of how important the right choice of technologies and investments in quality may be for securing a market advantage can be that Datagroup, in its time, acquired and installed the Europe’s second satellite communications center supplied by the American company Hughes Network System. This contained a certain risk, but as the result the company succeeded to provide such services and of such reliability that so far cannot be guaranteed in the CIS by any company.
For implementation of its telecommunications projects, Datagroup always uses reliable solutions from vendors of worldwide reputation. In Datagroup, we understand that quality and reliability of the services are on the first place for the company customers.
The second position is the ongoing monitoring, network support and service quality maintenance, according to a SLA (Service Level Agreement), 24 hours a day, 365 days a year. The company possesses therefore the appropriate technical infrastructure: Car park of more than 100 motor vehicles, and appropriate engineering staff of more than 300 persons.
In 2003, Datagroup was the first company at the Ukrainian market to introduce the TQM (Total Quality Management) system. Careful staff training was carried out. The company fully applies TQM – the system of concepts and skills for creating high-quality products and services to cover the customers’ increased demands on the Ukrainian rapidly developing telecommunications market.
Based on TQM criteria, Datagroup carries out an ongoing improvement of its business processes. This includes a general participation therein of each company employee. Focusing on its customers, the company keeps attention to those whose varying demands determine the Datagroup’s success criterion. The general staff participation in the company development indicates that everyone in the company is the “process master”, and that everyone’s participation and skills are necessary to be able to meet market requirements.
Besides, work with customers is carried out strictly within the scope of SLA (Service Level Agreement). Co-operation between Datagroup and a customer company provides, first of all, for an ascertainment and systematization of customer requirements. Then, a workgroup consisting of customer employees, as internal business tasks specialists, and Datagroup’s employees, as network performance specialists, draw up a SLA describing a number of specifications to be complied with by the operator.
These specifications include data transmission rate, bandwidth stability, channel deference and error rate, and channel availability within the agreed time intervals. Depending on specific character of the customer’s activities, SLAs may differ considerably as to the stringency of requirements set for the above parameters. Only according to terms and conditions fixed in the SLA, implementation of the projects begins.
Due to availability of all transport types (optic-fiber, satellite, and wireless solutions), Datagroup assures network redundancy. The Datagroup’s national transport DWDM network has a ring topology. After having detected a channel trouble in the ring, the equipment will automatically send the data to the appropriate ring node through the rest of ring's working parts. In case of a break, this topology enables to restore the network performance promptly, without making the network integrity failure visible for the end customer. The availability index of the Datagroup’s network service is 50 m/sec.
Besides the topology redundancy, the whole infrastructure also provides for assuring the faultlessness of its nodes. Datagroup treats the problem of uninterruptible power supply at the nodes especially careful. The regional nodes are able to operate on uninterruptible power devices for 12 hours, and the intercity repeater nodes are able to operate on batteries for 24 hours without external power. In various spots throughout Ukraine, in regions, 11 mobile diesel generators are located. In case of serious power supply troubles, they go to the accident site and supply the corresponding node with power for such time as may be necessary for resumption of centralized power.
The strategy of the company may be conventionally divided into two parts: The first one is retention and consolidation of leadership in the corporate market of professional data transmission. The second one is an active entry into the private user market which is strategic for Datagroup. The both parts of Datagroup’s strategy have the same primary aim, namely to establish itself as a leader on the Ukraine’s telecommunication market and to become soon the second fixed communications operator in the country. No doubt, this is a difficult task, but the company management sees real possibilities for its performance.
Two years ago, Datagroup began to actively develop the private user market. At the moment, the company has more than 85 thousand subscribers.
Being aware of the necessity of access to end users, Datagroup since 2005 has been actively taken over small regional fixed communications operators and Internet service providers.
In 2006, providing services to corporate users all over Ukraine, and aiming at home user market development, Datagroup entered six further Ukrainian cities – Vinnitsa, Nikolayev, Lutsk, Dnepropetrowsk, Krivoy Rog, and Yevpatoriya. During seven month of 2007, the company expanded its retail services over next 10 cities of the country – Odessa, Cherkassy, Kovel, Rovno, Zaporozhye, Khmelnitskiy, Simferopol, Feodosiya, Poltava, Kherson and Donetsk.
Subject to implementation of subsequent expansion plans, Datagroup, by the end of 2007, will leave behind its competitors (major alternative operators) in terms of geography of home user services.
According to Datagroup’s strategic plans, it is projected to increase in the near future the number of retail subscribers of the company up to 600 thousand, and further to retain leadership in the corporate segment increasing its growth.
At the moment, the revenue proportion of the company is as follows: 60% of the revenue is obtained from corporate customers, and 40% is due to retail services. Bu it is expected that in the next year this proportion will be 50/50.
The company actively considers the strategy of entering the satellite telecommunications markets of Romania, Bulgaria and Moldova, Georgia, Armenia and Azerbaijan. This includes the full service pack which Datagroup provides to Ukrainians – telephony, data transmission, Internet, video, distance learning, banking and energy service.
Datagroup is one of the four largest fixed communications operators in Ukraine. In 2006, the revenue from communications services of Datagroup was 30 million USD. At the same time, the company shows one of the highest rates of annual receipts growth – more than 91%, as compared with the preceding year.
Today, Datagroup is the undoubted leader in data transmission segment. According to 2007 results, its market share was 34%. At the same time, as early as in 2005 the market share of the company made up only about 21% of total income in this segment. The considerable market share growth can be explained by higher income growth rates, as compared with other operators.
Unlike other operators who expanded their activities on the basis of service-specific networks (e.g. wire telephone networks, Ethernet networks for providing Internet access), Datagroup initially built its business on the basis of multiservice IP network.
This gives to the company a number of strategic advantages. Having already had a ready backbone network of new generation, the company prepared the basis for Triple-Play services, i.e. it is able to provide to end users both the whole range of existing fixed communications services (telephony, Internet access, data transmission services for corporate users) and the currently most innovative services: VoIP, IPTV, and VoD.
On the basis of the multiservice data transmission network, the company can provide such popular services as corporate IP-telephony and video conferencing.
Datagroup still remains the number one on the domestic and CIS satellite communications market. During 2003 to 2007, the Datagroup’s revenue from satellite data transmission increased by more than 10 times up to 5.7 million USD. During the above period, the revenue from the said activity increased at the average by 105% every year.
By July 1, 2007, the total number of Datagroup’s VSAT stations reached 6.6 thousand units, which is 87% of all VSAT stations installed in Ukraine.
Actually, by the end of 2008, the company plans to install 7.000 VSAT stations, by 2010 - more than 10000. Further, Datagroup plans to install more than 1.500 VSAT terminals every year.
Besides the support of major corporate customers, Datagroup focuses also on private users and SOHO segment – the InternetBoom service. This service is already provided to about 600 customers.
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