The Prague MFDnes newspaper reports today that the Czech telecom sector regulator, the CTU, should rule on Friday on the issue of fixed-to-mobile interconnect prices, and, further, that its decision will be that prices shall be reduced from CZK 6.50 to CZK 3.40-4.30 per minute. Cesky Telecom would benefit from this reduction as its cost for connecting onto the mobile networks of Eurotel and RadioMobil would fall. The CTU was forced to settle the issue after the operators were not able to agree on prices amongst themselves (Cesky Telecom has been reportedly arguing for a price of some CZK 3/min., Eurotel and RadioMobil for more than CZK 6/min., and as of July 2001 Cesky Telecom unilaterally reduced the price it actually paid).
The regulator’s reported view is closer to that of Cesky Telecom’s. The positive impact of reduced interconnect costs on Cesky Telecom will be somewhat dampened by the negative impact of the reduction on revenues of Eurotel, 51% owned by Cesky Telecom, but the net impact should still be positive. We have been expecting such an interconnect reduction, it might be partially reflected in Cesky Telecom’s current share price-but it is still positive news for Cesky Telecom stock (and negative news for Ceske radiokomunikace, the 39% owner of RadioMobil).
(Ondrej Datka)