OREANDA-NEWS. February 24, 2011. In FY10, broadband users of Ukrtelecom, the largest landline incumbent in Ukraine, went up by 34.3% to 1.17mn, mobile subs rose by 66.7% to 0.6mn, whilst land lines declined to 10.13mn, down by 1.5%, according to the data provided by the company on Feb 22. Income wise, the company recorded a increase both in broadband (+25.6%) and mobile (+73.2%) revenues.

Millennium Capital deems the news is NEGATIVE for Ukrtelecom. At first glance, the company enjoyed growth in revenue and a spike in subs, although a deeper insight unveils weaker earnings generation given that broadband ARPU declined to UAH94 in FY10 from UAH112 in FY09, whereas mobile ARPU contracted to UAH 29 in FY10 vs UAH 31 in FY09. Moreover, the growth dynamics in revenues seems to slow down, specifically the growth in broadband top line has decelerated to 25.6% in FY10 from 57.7% in the turbulent FY09. With regard to a core fixed-line segment, the company continues losing its position on the market since its market share shrank to 82.5% in FY10 vs 83.2% in FY09.