The transport minister, M. Simonovsky, said yesterday that Cesky Telecom privatization would be canceled if the tender winner (Deutsche Bank/TDC) does not fulfill all the government’s tender conditions (obviously, the minister warned of a “Unipetrol privatization scenario”). Interestingly, the minister said it is likely that the privatization contract would not include restrictions on Cesky Telecom asset disposal, including the 51% stake in Eurotel.
We see the possibility of the 51% stake disposal as slightly inferior to Cesky Telecom’s acquisition of the remaining 49% in Eurotel.
Separately, Cesky Telecom has announced that it does not expect lower revenues following an extensive re-numbering of phone lines scheduled for September 22. The re-numbering will result in a lower number of telephone districts (from 159 to 14), leading to an increase of local calls at the expense of LD traffic with higher tariffs. The company expects the lower revenues from LD calls to be offset by increased local traffic. We are less bullish and expect the loss of revenues could amount to tens of million of Czech korunas per year. Nevertheless, given the total 2002 expected revenues of CZK 51.4 bil., the impact is relatively insignificant.
(Jiri Soustruznik)