The mobile operator T-Mobile CR, Ceske radiokomunikace's 39%-owned subsidiary, yesterday introduced its new strategy. Lower tariffs will be introduced for specific domestic market segments, such as students and foreigners, and fees for weekend calls will be reduced. The company seeks to become No.1 on the market in two years in terms of clients and in four years in terms of revenues.
This may trigger a wave of tariff cuts and increased subscriber retention costs across the sector, with consequent decreased sales (given the low industry elasticity of demand) and cash flows, and perhaps with no real winner among the mobile operators. While this is positive for consumers, it is hardly positive news for Eurotel (No.1; majority owned by Cesky Telecom), and even T-Mobile CR might eventually fare worse given such strategy.