Fixed Internet Market in 2025: How Higher Taxes and Wages Are Reshaping the Sector
In 2025, Ukraine’s fixed internet market demonstrated a trend that ran counter to many expectations. Instead of a mass shift into the shadow economy, the sector showed growth in tax revenues, higher official wages, and a noticeable increase in VAT payments. This does not mean that the shadow segment has disappeared. But it does mean something else: a trend toward more legal business models has emerged in the industry, even in a wartime economy where “grey” practices usually tend to expand. What matters most here are not general statements, but the numbers. And it is precisely the numbers that allow us to see the picture without illusions.
As of December 1, 2025, the total amount of taxes paid by taxpayers in the fixed internet provider segment reached UAH 6.1 billion. For the same period in 2024, the figure stood at UAH 4.1 billion. The difference is UAH 2 billion, or +48.5%. The structure of tax revenues in 2025 shows:
- personal income tax and military levy UAH 1.9 billion (+61%)
- corporate profit tax UAH 0.6 billion (+25.8%)
- VAT UAH 3.27 billion (+58.1%)
One indicator is particularly telling: the VAT share. The VAT payment rate in the sector increased from 8.61% to 9.71%. This is not a revolution, but it is precisely such gradual shifts that often signal that part of the turnover is no longer “dissolving” in schemes.
Wages as a marker: money started to become officially visible
Another indicator that is hard to ignore is the average salary in the sector.
- October 2024 UAH 14.1 thousand
- October 2025 UAH 17.9 thousand
Growth amounted to +26.9%.
This matters not only as a social indicator. In a market where for years a significant share of personnel costs could be paid unofficially or through non-transparent arrangements, an increase in official average wages often means that some companies are changing how they formally employ staff, or at least increasing their “white” payroll base.
Time for Action examined what “legalization” really means in these figures
It is easy to present the idea of “coming out of the shadows” as a finished fact. But analytical journalism requires clear boundaries.
Tax growth alone does not prove full de-shadowing. It may be the result of several factors acting simultaneously:
- growing demand for fixed internet due to regular power outages and the need for stable connectivity
- the shift of part of the audience toward optical and energy-independent solutions
- greater attention from the state to a sector that has become critical for work, education, communication, and security
- partial legalization of parts of the market, rather than a complete clean-up of the entire sector
Therefore, it is more accurate to say that the market is showing signs of legalization, but that this process is uneven and, in some cases, forced.
A problem that has not disappeared: fragmentation and the “small shadow” segment
Even against the backdrop of growing revenues, a key structural issue remains: operator fragmentation. This refers to business models designed to minimize tax burdens through multiple small legal entities or chains of individual entrepreneurs, fragmented turnover, and simplified schemes where, in reality, medium-sized or large operators are operating.
In the same context, another important signal appears: enforcement activity aimed at violations in the market has not yet taken on a systemic character. This means that the de-shadowing effect observed in 2025 is driven less by pressure and more by a combination of economic incentives, regulatory changes, and shifting consumer demand.
Why the state is simultaneously tightening rules in communications: the mobile segment and national roaming
It is important to clearly distinguish between segments. Tax statistics relate to fixed internet, while 2025 also brought stricter requirements for mobile communications.
A new law was signed that makes mobile internet speed an official quality indicator. It also improves the mechanism of national roaming, allowing networks to back each other up during emergencies so that people remain connected.
This does not directly “fix” the fixed internet provider market. But it fits into a broader logic: the state is trying to make communications more measurable and accountable. When quality becomes a formal standard, room for manipulation shrinks, and infrastructure requirements become stricter.
xPON and “internet without power”: what is changing at the technological level
A separate layer of change concerns energy-independent xPON networks. In 2025, amid a new wave of power outages, demand for xPON in different regions grew by 45–77%. The share of subscribers using energy-independent technology reached 52%, compared to 30% in 2021.
New functionality is also being introduced that allows people to check whether their building is connected to xPON, see available providers, estimate how long connectivity will last during outages, and leave feedback on service quality.
For the market, this means two things at once:
- competition increasingly shifts toward quality, not just price
- provider visibility increases, which in the long run puts pressure on “grey” operating models
What this means for 2026: the main scenarios
Scenario 1: continued cautious legalization
If the state maintains stable rules and strengthens quality measurement, part of the market will continue moving into the formal economy gradually, without abrupt shifts.
Scenario 2: legalization stalls due to economic pressure
If infrastructure, backup power, optical deployment, and network maintenance costs grow faster than revenues, some small operators may return to grey practices to survive.
Scenario 3: market consolidation
Technological requirements and subscriber expectations push toward consolidation, where stronger players absorb weaker ones, and small operators struggle to meet quality standards.
The year 2025 delivered an unexpected result: the fixed internet market did not collapse or hide, but moved toward higher tax payments and official incomes. UAH 6.1 billion versus UAH 4.1 billion is not a minor statistic, but a signal of changing behavior within part of the sector.
The key is not to fall into the illusion that “everything has been legalized”. Fragmentation and schemes still exist, enforcement remains inconsistent, and a wartime economy always creates incentives to return to the shadows.
At the same time, parallel processes stricter mobile quality standards, national roaming, the expansion of xPON, and public tools for checking coverage are shaping a new reality: connectivity is becoming not just a service, but critical infrastructure, where transparency and standards are gradually displacing informal market rules.
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