UTEL Announces 1H06 Results.

Ukrtelecom (UTEL: BUY) increased revenue by 0.5% yoy, to about USD 630 mln. The company decreased revenues from fixed LD services (excluding fixed-to-mobile) by 11.5% yoy, and increased revenue from internet and data services by 34% yoy. UTEL’s net income decreased by 74%, to USD 12.3 mln and its CapEx for the period amounted USD 138 mln (-5% yoy). Alexander Paraschiy: As expected, mobile operators took advantage on UTEL’s inflexible tariffs to gobble up the company’s LD traffic. UTEL has been concentrating more on the internet and data segment. Net income is expected to grow in 2H06 due to July’s tariff rebalance. The main expected driver of the company value, the mobile segment, is currently in the process of being tested.