Ukrtelecom (UTEL: HOLD) To Provide Wireless Services

Georgy Dzekon, CEO of UTEL, announced that the company submitted an application for a UMTS mobile license. He also announced that UTEL expects to obtain the license in two months. Dzekon said UTEL plans to have 2 mln subscriber base by the end of 2008. Also, UTEL will provide digital television services IPTV. Concorde Capital: UMTS (Universal Mobile Telecommunication Service) is a wireless G3 telecommunication standard, supporting a data throughput of up to 2 Mbps. We remain cautious on these plans as the feasibility of the project is not clear. The management estimates USD 300 mln is needed over a three year period. This will translate into ~15% of CapEx/EBITDA annually, in addition to a CapEx/EBITDA of ~65-67% from previous years. We will be watching to see if the return on investment remains high enough not to harm UTEL?s margins.