Cesky Telecom: DT's placement may prove positive for CT

CT has launched the first experimental transmission of digital TV in Prague and Brno. Nationwide transmission should start in 2006. The move reflects CT's efforts to find an alternative revenue source to fight the erosion of its fixed line revenues, in particular voice. In addition, CT's 100% mobile subsidiary Eurotel began offering CT's ADSL service bundled with free calling minutes from a mobile phone.

Yesterday, the German government placed EUR 4.45 bn in Deutsche Telekom (double the size of state's stake in CT) at a price of EUR 15.05 per share. The stake was placed at a discount of 1.2% against Friday's close and at a premium of 6% against the 6M average price of Deutsche Telekom's shares. The size of the discount reflects investors' positive sentiment towards telecommunication operators and may suggest a successful placement should the Czech government decide to privatize its 51% stake in CT via capital markets.

Tomáš Gatěk, Patria Finance