Experts: Investment Priority Of Ukrtelecom’s New Owner Is In Broadband Internet

Experts believe that the investment priority of the new owner of the Ukrtelecom telecommunications company is broadband Internet services.

“I think that (investments will be directed) primarily toward development of the Internet. This is the segment that is developing most dynamically. In addition, computer communication requires less investment than mobile communications,” said Viacheslav Ivanyshyn, an analyst with the TASK investment group.

At the same time, Ivanyshyn believes that there will be no fundamental change in Ukrtelecom following its acquisition and that the company will remain unprofitable.

According to Ivanyshyn, the biggest problem of Ukrtelecom is that it has too many employees, but he does not expect a significant reduction in the number of its employees.

Yehor Samusenko, an analyst with the Concorde Capital investment company, believes that one of the first steps of the new owner of Ukrtelecom will be a 30-40% staff reduction and estimates the payouts related to the staff reduction at approximately UAH 900 million.

Samusenko also shares the view that the main focus of investments will be Internet access services.

Regarding Ukrtelecom’s UMTS (3G) mobile communications network, Samusenko said that the following development scenario was possible: the participants on the market of mobile communications services could agree on joint development of this network, regardless of whether they obtain 3G licenses this year.

Volodymyr Klymenko, the director of the Sokrat investment and banking group, also believes that the investments of the new owner of Ukrtelecom will focus on development of broadband internet and third-generation mobile communications services.

“In our opinion, investments could primarily be made in development of promising area of business, in particular 3G and Internet services,” Klymenko said.

According to Klymenko, the new owner will focus on increasing the profitability of Ukrtelecom and restructuring the company.

According to him, the restructuring will involve, in particular, changing and reducing the company’s management structure, as well as separation of its non-core assets with a possible subsequent sale.

As Ukrainian News earlier reported, the State Property Fund and the ESU company (Kyiv) signed an agreement on sale of 92.79% of the shares in the Ukrtelecom telecommunications company for UAH 10.575 billion on March 11.

ESU is a subsidiary of the EPIC investment and financial consortium (Austria).

Leave a Reply

Your email address will not be published. Required fields are marked *