Ukrtelecom not to be sold this year: universal service fund delay blamed

27 Sep 2010

The Ukrainian Cabinet has once again postponed the privatisation of Ukrtelecom, reports local newspaper Delo, after a meeting on 22 September concluded that the auction would not go ahead this year. The State Property Fund (SPF) had previously scheduled a sale of the government’s 92.8% stake by the end of this month. The report said that the communications ministry did not make an official comment on the reasons for postponing the privatisation. However, ministers have noted that the amount fetched by a sale of the incumbent telco – with the SPF proposing a starting price of UAH12 billion (USD1.5 billion) – would fail to reach the desired level, partly because of the structure of Ukrtelecom’s existing unprofitable ‘social’ services such as rural telephony. A remedy for this situation is pending with the delayed creation of a universal service fund, to be supported by contributions from private telecoms operators. There is ministerial support for waiting until the group’s market capitalisation is increased before launching a sale, whilst development plans to increase the firm’s value include further rollouts of upgraded broadband internet infrastructure and expansion of its 3G mobile services. A communications ministry source was quoted as saying that there appears to be a strategic decision to wait for the implementation of the universal service fund before returning to the issue of privatisation. A member of the Parliamentary Committee on Transport & Communications, Yuri Moroka, gave the opinion that ‘It is hardly possible to solve the whole range of complex problems that require solutions before the privatisation of the company until the end of the year.’

Ukraine, Ukrtelecom (incl. TriMob),

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