Ministry Of Justice Appeals For Validity Of NCRC.

The Ukrainian Justice Ministry has appealed a Pechersk Court decision which declared the appointment of a new member to the National Communications Regulation Commission (NCRC) in April 2005, illegal. Concorde Capital: From a legal standpoint, the dismissal of the old NCRC team in April and the appointment of a new one was not done in complete accordance with the law. However, as the new NCRC team has just started working, common sense suggests that stopping the work of the commission would paralyze licensing and regulation improvements in the telecom market for the next half of the year (as it was during 1H05). The government is unlikely to permit a regulator change now, as this would postpone the process of liberalizing the telecom market (tariff changes, mobile licensing), which will benefit Ukrtelecom (UTEL: HOLD). Note that UTEL is now being prepared for privatization in 1H06. Thus, the state is interested in clarifying the situation surrounding the NCRC before the start of Ukrtelecom?s tender, as uncertainty concerning validity of the NCRC (and, thus the validity of all their decisions and issued licenses) will reduce the value of UTEL.