Aug
28
Mass media reported this week that a range of Svyazinvest’s IRCs plans to increase (or have already increased) the tariffs for unlimited local communications usage to the highest level, confirmed by FTS. Among these companies are: Centertelecom, STC, Uralsvyzinvest and NWTelecom. As other IRCs reported the given issue under a discussion now. We think that the other IRCs have all opportunities to increase the tariffs – the elections for State Duma and presidential elections were ended and there were other constraining factors, influencing on the companies.
We see the news as positive for IRCs and their stocks as well, i.e. increased tariffs will lead to a growth of revenue and efficiency of the companies. It should be mentioned that we have not reflected a growth of tariffs in our previous model.
We have reviewed the models of NWTelecom, Centertelecom and STC and we will renew them, taking into account received data. Regarding the other companies: we plan to publish their researches, including a possible growth of tariffs in the nearest future. In accordance with received information, we increase the estimations of NWTelecom’s, Centertelecom’s and STC’s securities.
It should be mentioned that the stocks of all IRCs have a high growth potential. Over the year, a fall of IRCs’ stocks formed about 50%, due to a negative market situation. However, our forecasts are based on the “normal†market conditions, excluding political and war risks, providing a negative influence on companies’ stocks.
We have reviewed the fair prices of NWTelecom, Centertelecom and STC (Page 2). We confirm our “BUY†recommendation on Centertelecom’s and STC’s securities. Increase NWTelecom’s estimation from “ACCUMULATE†to “BUY†recommendation on company’s stocks.
Svyazinvest’s IRCs: It is time to increase tariffs (PDF)