OREANDA-NEWS. March 10, 2011. The National telecom regulator (NKRZ) suggested that local tariffs be raised by some 35% by end-2011. The spike in the ceiling tariffs is to be introduced in two stages, with a 25% increase effective from May 1 and a further 8% increase from Sep 1. Separately, it was announced the UTLM acquisition deal is going to be closed on Mar 11. In addition, potential new owner disclosed it may consider an IPO of UTLM.

Millennium Capital considers the news flow is POSITIVE for Ukrtelecom. Millennium Capital views chances are high that a new tariff spike will be eventually approved. In this case, the company will benefit from improved profitability metrics already in FY11 as the affected portion of sales stands at 38%.