The Ukrainian government is considering handing a mobile licence to state-owned PTO Ukrtelecom, but is no hurry to privatise the company, Prime Minister Yulia Tymoshenko told a news conference last week. ‘It is strange that Ukrtelecom, a state-owned company, does not have such a license,’ she said before adding that the telco was on a list of enterprises planned for privatisation, but that no date had yet been set for the offloading of all or part of the state’s 92.86% stake. The sale was due to have given the PTO a much needed financial injection as it looks to ward off competition from alternative fixed line operators and mobile players in an increasingly competitive market. However, the administration has back-tracked on proposals by its predecessors to divest the state’s holding, leaving Ukrtelecom without crucial funding for modernisation projects and, perhaps more importantly, even more exposed to further price erosion of its core fixed line voice revenues. The company is struggling with cashflow and reported slow revenue growth. Moreover, despite stable profits in 2004, it is finding it hard to contain rising costs.