| Profits at Ukrtelekom are likely to decline due to increased competition from mobile operators, overstaffing and policy uncertainty, its chairman said. Ukrtelekom, which has a fixed-line monopoly, is scheduled for privatisation in 2007.
Georgiy Dzekon, Ukrtelekom's chairman, said the company installed 700,000 new lines in 2005 while Ukraine's four mobile operators added about 15 million new subscribers. The company's profits fell to US$ 103 million in 2005 from US$ 190 million in 2004. Officials expect about US$ 80 million in profits this year.
The government, which owns 92.86% of Ukrtelekom, wants to increase the company’s value and has granted Ukrtelekom permission to offer mobile services, including the country’s only 3G license.
Dzekon said a lack of certainty on government policy on privatising the company was damaging. The government has been attempting to sell Ukrtelekom for seven years. However, the sale has been delayed due to political struggles and fears that the company would be sold for too little. Parliament also needs to pass a special law on Ukrtelekom's privatisation, specifying the amount to be sold and the terms of the tender.
Source: Reuters - WDR/Intelecon Regulatory News |