Cesky Telecom the Only Bidder in Tender for Payphones

Cesky Telecom is the only bidder in a tender for payphones, which Cesky Telecom has been providing so far. Payphones belong as part of the so-called universal service and therefore the Czech Telecommunication Office (CTU) must open a tender for it. The CTU should decide by January 20. The number of payphones has stabilized at 26,000, while their usage has been declining. We do not see the news to have any impact on today’s trading in CT shares, which are more influenced by speculations about the potential dividend payment. We reiterate out Hold recommendation.

Separately, regarding mobile number portability effective from January 15, it is still not clear how much the mobile operators charge each other. Fees can reach up to CZK 2,000 per transfer, but the final rate will be set by the telecommunication office. Estimated churn is about 2-3% out of a total of 11m mobile numbers. We believe this will not impact today’s trading. We reiterate out Hold recommendation.