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Because of Copper Cable Stealing, Ukrtelecom Losses Tens of Millions of Hryvnias of Revenue Quarterly

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Cable Operator

In Q3 2017, Ukrtelecom’s revenue exceeded UAH 1.6 billion, while the EBITDA margin totaled 34%.

The receipts form telecom services are adversely affected by numerous thefts of copper cables, which led to disconnected telephony and the Internet for hundreds of thousands of customers and, as a result, to losses in revenue of tens of millions of hryvnias quarterly. In the third quarter, there were committed nearly 5,000 thefts, which negatively affected the provision of services for almost 250,000 subscribers. In general, the earnings from telecom services decreased by 6%, against Q3 2016, i.e. up to UAH 1.382 billion.

At the end of Q3 2017, EBITDA increased by 28.5%, against the previous year, and exceeded UAH 544 million. The EBITDA margin remains at a rather high level and is 34%. The profit was UAH 283 million.

Business customers were provided with services for UAH 321 million, which was somewhat more than a year ago, and private subscribers – for UAH 872 million.

There is also a market trend of subscribers’ giving up fixed telephony in favor of other forms of communication, notably the mobile one. Therefore, in general, the company observes a decrease in revenue from these services by 7%. In the third quarter, the income was almost UAH 722 million. As of early October, the operator served almost 4.9 million active telephone lines.

At the same time, the trend for Internet and data transfer services revenue growth was actual, and the income totaled UAH 422 million. In the business segment, it was equal to UAH 116 million, which was 11.5% more than in the third quarter of previous year. Among private Internet users, that figure increased by 4%, i.e. up to over UAH 306 million. Today, the Internet by Ukrtelecom is available in 2186 localities of the country, and it is enjoyed by almost 1.5 million subscribers. The company keeps on implementing projects to expand the geography of its services by connecting new localities to the Internet. Over the past three months, it has connected 18 villages. In the third quarter, Ukrtelecom also started providing Internet access at a speed of 50 Mbps, increasingly using FTTB and FTTC technologies for mass consumers in 36 Ukrainian cities.

Ukrtelecom implemented an up-to-date service of a 24-hour business protection from one of the most common cyber-attacks. The service automatically begins to filter parasitic traffic within 2-3 seconds and allows repelling attacks with a total capacity of up to 350 Gbps. The “DDoS Protection” Service is designed for companies requiring uninterrupted Internet connection, namely banks, financial institutions, e-commerce, production and government agencies, other enterprises using Internet services by Ukrtelecom.

The company goes on implementing projects to offer modern services to corporate users. This implies building more than 100 km of fiber-optic channels and connecting 45 petrol stations to the network. Recently, customers and management of a number of HoReCa establishments have started using licensed content within the “Business TV” Service, and, the total of almost 1000 screens have been connected to the “Business TV” Service. Educational institutions have also been moving to the “clouds” of Ukrtelecom. It is worth mentioning that the total number of connections to the “Cloud ATS” Service has reached 10.6 thousand lines.

The investment in the telecom infrastructure development amounted to UAH 207 million in the third quarter. The infrastructure modernization is underway in the six largest cities, where over 300,000 subscribers already enjoy services of the upgraded network.

In Q3 2017, Ukrtelecom transferred some UAH 482 million of taxes and charges to the different level budgets.