Increase Of Local Telecommunication Tariffs Postponed.

The National Communications Regulation Commission (NCRC) announced that it cannot increase local telecommunications tariffs (tariff growth is expected in 2H05), as the initiative failed to be supported by the Federation of Trade Unions. According to local legislation, the Federation must sign off on tariff growth. Concorde Capital: If tariffs grow, fixed telecom revenues and profitability of Ukrtelecom (UTEL: HOLD) will increase. Postponement of such tariff growth (predicted by Concorde Capital, refer to UTEL desk-note of July 18) will limit the growth of UTEL?s value before privatization. The conflict between the NCRC and the Federation of Trade Unions is very likely to be solved by 2Q06, when the privatization of UTEL is expected to take place.