Ukrtelecom’s USD23m Q1 net loss – small potatoes compared to USD194m in FY2008

29 Apr 2009

Ukraine’s former monopoly fixed line operator Ukrtelecom has reported a consolidated net loss of UAH181.6 million (USD32.1 million) in the first quarter of 2009, an improvement over net losses of UAH97.5 million in January-March 2008. The wireline, broadband and mobile provider’s total revenues in the three months ended 31 March 2009 rose by 0.9% year-on-year to UAH1.7 billion. The results offered some encouragement after the state-run telco posted an annual net loss for 2008 of UAH1.53 billion (around USD194 million at today’s exchange rate), compared to a net profit of UAH267 million in 2007, on total revenues which fell by 2.1% to UAH7.83 billion. Core service revenues in 2008 were reported to drop 2.4% to UAH6.65 billion. Ukrainian businesses have suffered recently from rapid local currency depreciation (by around 52% year-on-year against the USD in 2008), and nearly 90% of Ukrtelecom’s annual loss was accounted for by the exchange difference resulting from the revaluation of a USD500 million loan attracted in 2005. According to TeleGeography’s GlobalComms database, just UAH35 million, or less than 1% of the company’s core service revenues in 2008, was earned by its 3G mobile service, Utel, which launched in November 2007 and had 149,000 subscribers by end-December 2008. The government is currently preparing to put a majority stake in Ukrtelecom up for sale, and has reported receiving expressions of interest from at least ten major international telcos and financial groups.

Ukraine, Ukrtelecom (incl. TriMob),

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