P4, Netia’s mobile venture, in which it holds a 30% stake, selected Chinese manufacturer Huawei, as an equipment supplier for its 3G network. According to its earlier indication, the vendor would finance deliveries of base stations, connecting lines, and cell phones. The first installment is worth EUR 150m. We view signing of the contract as a big step forward for Netia’s mobile venture, and expect a positive market impact today. However, we recommend selling into strength, as we view the prospects of P4’s mobile operations as challenging at best. We reiterate our Sell rating for the stock with PLN 4.7 fair value estimate. We believe the stock is overvalued compared to integrated operators, which trade at an average of 5.5x 2006F EV/EBITDA. Given a lack of growth in its core business and mobile execution risk, the premium is unjustified.