Today’s HN daily featured an interview with Jaime Smith, CEO of Cesky Telecom (CT), where he commented on several issues concerning future joint projects and plans of CT and Eurotel (ET). He reiterated CT’s efforts to halt the decline in the fixed line business by providing additional services like ADSL or IPTV on a broader basis, but also new tariff programs which better suits customers, e.g. unlimited phone calls between mobile and fixed line for families (closed-end user groups). Mr. Smith also commented on the benefits of the merger of CT and ET. The plans are for joint distribution network, customer service and call centers. However, no reduction of sales points or reduction of workforce in connection to the planned merger is expected.
CT has high expectations with its plan to launch IPTV in 3Q. Prices of the intended service have not been disclosed, however should be comparable to what cable operators offer. Besides, CT plans to launch phone calls over internet, which should be one of its key services to be provided initially to companies (expected in June), and later also to households. The majority of these issues are already known in the market, thus we do not see any trading impact on Cesky Tel’s share price today and reiterate our Hold recommendation on the stock.