Cesky Telecom: A third of employess may be outsourced

Cesky Telecom is considering the option of moving approximately one third of its 9,500 employees to an external company in order to lower its costs, CTK reported yesterday. The staff working on maintenance and telecommunication grid operation could become a part of an external employer as soon as next year. According to CT´s spokesman, Vladan Crha, CT is now negotiating with two companies and will decide upon their proposals if CT starts the project. CTK informed that the companies in question are Siemens and Alcatel, whose technologies Cesky Telecom makes the most use of. The above would be a part of the broad restructuring program initiated last year - recall that in order to lower its costs and free up some cash, CT sold and then rented back a large part of its car fleet this year; CT also plans to apply similar a procedure next year, when it should sell some of its real estate of a total book value of CZK 10bn.

Separately, Eurotel, CT´s 100% mobile subsidiary, reported that 10,000 customers signed up for its high-speed Internet connection via CDMA within the first two months of the service being launched (only approx. 3,000 signed up in September). Source: CTK. Internet and data services are one of Eurotel's few growth areas given the high mobile market penetration (nearly 99% in 1H04) and increasing commoditization of the voice services. Note that T-Mobile CR (the second-largest mobile operator in the country) does not have a CDMA license (and strongly opposes Eurotel`s monopoly ownership of the license, which gives it a competitive advantage). Nevertheless, it plans to launch high-speed Internet access via EDGE technology by the end of the year.

Tomáš Gatěk, Patria Finance