Ukrtelecom to see 10% growth in local tariffs from 2H12

The National Communications Regulatory Commission approved an increase in monthly charges for the use of fixed-line phone by 10%, Interfax reported yesterday. The commission hopes the regulation will be approved by the Ministry of Justice and validated by July 1. The commission also outlined a possible increase in monthly telephone charges in rural areas by another 10% in November 2012. Ukrtelecom (UTLM UK) previously said it applied for the 10% tariff increase.

Alexander Paraschiy: The news is encouraging for Ukrtelecom, which generates 40% of its revenue from monthly fixed-line telephone charges. The new regulation, if introduced on time, will allow the company to add another UAH 170 mln (USD 21 mln) to its top line and EBITDA in 2012, raising full-year EBITDA by up to 11%. We note that the fixed line tariff adjustment is only one of four possible triggers in mid-2012, as we outlined in our April 26 news on Ukrtelecom.