Ukrtelecom considers increasing telephone rates

The National Communications Regulatory Commission of Ukraine announced on Apr. 5 it’s considering an increase in monthly rates for fixed-line phones in two stages, the commission announced on Apr. 5. Monthly rates are planned to increase by 7% in urban areas and 10% in rural areas starting May 1, and by another 15% in rural areas starting Nov. 1, according to the LIGABiznesInform news wire.

Alexander Paraschiy: The news is clearly encouraging for Ukrtelecom (UTLM UK), Ukraine’s largest provider of local fixed-line telephony with a market share of 70%. With the new tariffs, the company’s 2013 revenue will match last year’s result, at minimum.

Monthly charges for fixed-line telephones account for about 44% of Ukrtelecom’s revenue. The proposed tariff adjustments, if approved, will increase Ukrtelecom’s APRU from local calls by 7.6% starting May 2013. The increase, however, will be partially offset by a decline in its fixed-line customer base, as the company is losing slightly above 1% of these customers each quarter. The total effect of the rate increase on Ukrtelecom’s full-year 2013 revenue will be just 1%, we estimate.