Ukrtelecom Announces 1H05 Results.

Ukrtelecom (UTEL: HOLD) increased its consolidated (with LD operator Utel) revenue by 9.9% yoy, to USD 745 mln. Revenue from data transfer and Internet access services increased 22.6% yoy. Ukrtelecom installed an additional 188,000 fixed telephones (growth of 27% yoy). However, UTEL?s net income in 1H05 decreased by 18.7% yoy, to USD 67.5 mln.  The main factors that caused this decline were the reduction of the more profitable LD segment due to mobile cannibalization (4.6% drop yoy) and the increase of the less profitable local telephone segment. Concorde Capital: UTEL?s tariff rigidity caused the company?s loses in the LD segment. Tariff policies may be changed in the near future, as the state tries to increase the attractiveness of UTEL before its privatization. However, the absence of a consistent state policy may drag out this process.