The sector regulator, CTU, reduced the fixed-to-mobile interconnection fees from CZK 3.66 to CZK 3.19 (effective as of April 1). The net effect of the reduction is positive for Cesky Telecom: (i) it will lower its payments to mobile operators (T-Mobile CR, Oskar and Eurotel), which will more than offset (ii) a decrease in the payments from fixed-line operators to Eurotel, its 100%-owned mobile subsidiary. We had expected the reduction to také place this year and estimate the fee will decline to as low as CZK 2.5 by year-end (the regulator still uses FAC, instead of LRIC methodology).
The price of F2M calls is likely to decrease correspondingly, driven by the alternative operators, which should increase the attractiveness of fixed lines for voice services; we do not expect a large impact, though.
Jitka Oppitzová, Patria Finance