The sector regulator (CTU) decided on Monday to allow Cesky Telecom to raise its prices by 16.2% (17% VAT reclassification effect minus an effect of lower CIT rate) in January 2004 because the company is legally entitled to fully reflect the VAT increase (from 5% to 22%) in its tariffs, CTK reported yesterday. Nevertheless, the regulator will set completely new tariffs soon after that (these should be implemented in mid-February), which should rise by only 5-13% (including the VAT increase), so therefore the tariffs net of VAT will actually decrease y-o-y after February. The above has already been indicated by the regulator. While negative (the optimal scenario would probably be a full reflection of the VAT increase in the tariffs, letting traffic fall only temporarily due to low price elasticity of demand), it will be possible to estimate the actual impact only after separate tariff changes are known (monthly charges, call rates etc).
Jitka Oppitzová