The formal nomination of the head of new telecom regulator UKE would take place later than expected, because the procedure of selecting candidates by KRRiT (media watchdog) has only started, according to today’s “Rzeczpospolita” daily. The procedure involves each of five members of KRRiT selecting three candidates, then the whole body would present 3 names to the prime minister, and the final candidate would be chosen by the PM. Any delay in the procedure, which is likely since candidates are requested to present certificates from IPN, would lead to more delays in passing new regulation aimed at fostering competition on the telecom market in Poland, such as introducing internal roaming or local loop unbundling.
Separately, TPSA announced it has started tests on on-line TV in collaboration with Canal Plus and prepares to launch of video-on-demand services toward the end of this year. This is in-line with the company's new strategy of shifting towards innovative service offerings, including IPTV.
Finally, the Polish PM will discuss the selling of the state's remaining 3.87% stake in TPSA with the head of France Telecom, who will be visit Poland next week.
We expect slightly positive market reaction to the news, which are positive for TPSA's market position, and we reiterate our Buy rating for the stock with PLN 28.8 fair value estimate.