17 October 2010

Ukraine to sell Ukrtelecom by tender on 28 December 2010

It has been a bit late in coming but at last it would appear that the Ukraine state telephone company - Ukrtelecom, will be sold by the end of the year.
Many will say that it should have been sold years before when there was plenty of interest in telecom companies.

The government State Property Fund intends to raise approximately UAH 10.1billion (USD 1.3billion) but many restrictions have already been announced to try and keep the assets in 'Ukrainian hands' and not allow a foreign investor to get hold of the company.

The company does not perform so well. Probably due to the fact that it is a state company.
A few years ago a well connected friend told me that the reason why Ukrtelecom failed to make much profit is due to the fact that the directors were too busy planning schemes to steal money from the company. Many a true word......

On inspection of our most recent home telephone bill from Ukrtelecom, I notice it was the grand total of UAH 157 for one month (Thats about GBP12.50) The most expensive call on the list was a 4 minute call I made to Sri Lanka which cost me UAH 15.21 (GBP1.20). Even in business most companies use mobile phones and unfortunately Ukrtelecom is not one of the major players in the mobile market. But the jewel in the crown is that Ukrtelecom is the only company in Ukraine that has a 3G license, so the bidder(s) have something to aim for.

Whoever becomes the successful bidder, lets hope they decide to take Ukrtelecom forward and develop the business into a real player in the market. One idea would be to bring fixed line telecoms to many Ukrainians who still do not have a fixed line to their homes. There are many people living in villages who started using mobile phones before seeing any fixed line phones.
Plus it would be a great advantage if the vast majority of Ukrainians could get connected to the internet via Ukrtelecom, or perhaps I am just dreaming too much.
The vast majority of internet users are still based around the capital Kyiv and the other five major cities.

See: http://www.kyivpost.com/news/business/bus_general/detail/86382/

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