Ukrtelecom(UTEL: BUY)expects to report USD 1.29 bln in sales (1.2% yoy growth) and USD 121 mln in net income (32% decrease yoy). The company plans to start providing mobile services in 2007, which UTEL expects to bring USD 96 mln in losses in 2008. UTEL’s fixed line segment financials for 2007 are expected to continue their downward trend: -5.8% in sales and 75% in net income. This information was disclosed at meeting with equity analysts and UTEL management on Friday. Alexander Paraschiy: UTEL’s position in the fixed line segment is weaker than we forecasted, due to a higher than expected rate of mobile cannibalization. Management’s mobile segment projections for 2007 are in line with our forecasts. We are not changing our recommendation for UTEL yet but will be revising its 12m target downward.