Comstar-UTS announces acquisitions of DG TEL and Technologic systems in Ukraine for nearly $5 Million

JSC “COMSTAR – United TeleSystems” recently announced that it has acquired a 100% stake in two telecom operators in Kiev, Ukraine – DG Tel and Technologic Systems – through its local subsidiary Comstar – Ukraine for a total cash consideration of $ 4.7 Million.

DG Tel is an alternative fixed-line telecommunications company providing integrated services to corporate customers. The operator has its own fiber optic network in Kiev with over 90 km of fiber. DG Tel provides broadband and dial-up Internet access, trunk rental, hosting and collocation, and telematic services. DG Tel holds licenses for provision of local and long distance domestic and international voice services in six largest Ukrainian cities with the total population of over 8 million people and in their respective regions. The company currently utilizes around 15% of its existing numbering capacity.

Technologic Systems is an Internet Service Provider, focusing on offering of broadband services, which holds one of eight licenses in Ukraine for provision of domestic and international long distance voice services over IP. The company has a diversified customer base with corporate clients accounting for over 86% of its total base.

Eric Franke, CEO of Comstar – United TeleSystems, commented: “Through the acquisitions of DG Tel and Technologic Systems we have obtained an existing infrastructure, numbering capacity, licenses for local and long distance voice services as well as an established presence and customer base in Kiev. We intend to integrate the operations of these two companies into our subsidiary Comstar – Ukraine and utilize our technological synergies to a full extent in order to accelerate the rollout of our telecom services in the country”.

In June of 2006 Comstar established a subsidiary, Comstar – Ukraine, together with Neotel, its Ukrainian partner, in order to expand its presence in the Ukrainian fixed-line market. The company is in the process of constructing a proprietary NGN (MPLS) multi-service network and pursuing selective value added acquisitions. Since June
2006 Comstar – Ukraine built 54 km of fiber-optic network in Odessa, the fourth largest city in Ukraine, launched 36 public multiservice terminals, 240 broadband Internet ports and obtained a license for provision of TV services.

“We believe that Ukraine is one of the most attractive markets for telecom services providers in the CIS with significant growth opportunities. We will continue to develop our operations in this market to include all major cities with population of more than one million people. Our strategy is to grow organically and through value accretive acquisitions, at the same time utilizing the synergies with our sister company in Ukraine”, – concluded Eric Franke.