HELSINKI, Finland—Nordic telecom companies Sonera, Telia and TDC have confirmed their interest in bidding for a 25-percent equity holding in Ukrainian Mobile Communications (UMC), the Ukraine’s largest mobile-phone operator. Other interested parties include Deutsche Telekom, a shareholder in UMC.
The Ukraine government is planning to open the sale to bidding during the second quarter of 2002. The government has valued the 25-percent stake at US$100 million.
“We have received positive interest from European telecoms, and that is underlined by the number of Scandinavian telecoms that have asked for more information,” said Mykhailo Chechetov, the deputy general manager of the Ukraine’s State Property Fund (SPF).
“We may not have to wait until the end of the second quarter to close a sale. The interest level is high, and it would not be too surprising if we sold the shares over coming weeks.”
UMC was established in 1992 by the State Ukraine telecom monopoly Ukrtelekom, which holds a 51-percent equity stake. Minority owners include Dutch KPN, Deutsche Telekom, and TDC, each with a 16.3-percent equity stake.
At the end of 2001, state officials indicated a preference to sell the 25-percent equity holding on offer to one of UMC’s foreign owners. Deutsche Telekom became the most likely candidate to acquire the stock when KPN and TDC hinted that they wanted to divest their shares in UMC.
The number of UMC’s subscribers doubled to 1.1 million users at the end of February, up from 450,000 customers in 2000. The company anticipates 20-percent growth in its client base during 2002.
The delay in organizing the sale came about when the government of the Ukraine proposed the sale of a larger stake in UMC, a move resisted by Ukrtelekom, which argued for a reduced equity sell-off.
While the government’s sole interest is focused on generating income to bolster flagging earnings from taxation, Ukrtelekom is mindful of the damage, which could be caused to its impending privatization, and specifically to the underlying value of its fixed-line monopoly.
