Ukrtelecom spins off 3G mobile service

Ukrtelecom (UTLM UK), Ukraine’s incumbent telecom operator, passed its 3G mobile service to 100% subsidiary TryMob Ltd. The subsidiary was granted all related mobile frequencies and the 3G customer base previously owned directly by Ukrtelecom.

Alexander Paraschiy: Now fully operational, TryMob can easily be sold to a third party. We expect competition for TryMob, which has Ukraine’s only UMTS (3G) license, to be high. Ukrtelecom’s 2012 bottom line stands to benefit from USD 50-100 mln in profit from divestment. Cash proceeds from the sale of TryMob (USD 250-350 mln by our estimates) will be most likely allocated to partially repay debt and to support Ukrtelecom’s market-leading fixed broadband segment.