Unient Communications has announced plans to launch mobile phone services in the Czech Republic using capacity purchased from CT. Unient obtained a mobile license last year and has 200,000 reserved phone numbers. The company will be CR's first MVNO, and is targetting 100,000 retail and corporate customers in its first year after launch, planned in 2Q-3Q 2006. It is also reportedly in talks with T-MobCR and Oskar VOD to purchase more capacity. In our view, the highly saturated Czech mobile market, with 112% penetration rate, does not need yet another competing service provider. Although sale of capacity could provide a modest topline boost for existing operators, the margin impact of increasing competition offsets most of the gains. We maintain our SELL recommendation on Cesky Tel.