Ukrtelecom: Poor 1Q06 Results, Hope For 3G Mobile Segment.
1 June 2008
Ukrtelecom’s (UTEL: BUY) net revenue increased 3.8% yoy, to USD 318.6 mln. The company’s margins: EBITDA (25.1%), EBIT (9.8%) and net income (1.8%) fell by about 5% yoy due to the stickiness of UTEL tariffs compared to mobile operators. In related news, UTEL, together with Ericsson, is going to launch part of a new 3G mobile network in July 2006 in order to study the feasibility of the 3G project more closely. Concorde Capital: In the fixed line segment, we expect an increase of margins in 2H05, due to approval by regulators of local call tariff growth and the decrease of long-distance tariffs. As for the mobile segment, at the moment it is not clear how much UTEL will be allowed to spend for its 3G network development in 2006, as the CapEx program should be approved by the government. Cabinet has not approved UTEL’s plan because it has not decided on the company’s privatization schedule.
