According to CTK, telco company Radiokomunikace announced acquisition of Czech Tele2 branch, alternative provider of telco services mainly to households. Acquisition will lead to the augmentation of customer base over 450,000 and put Radiokomunikace into the role of the second largest operator on Czech market, after Cesky Tel with more than 3m customers. Radiokomunikace’s revenue should increase to CZK 3bn from CZK 2.3bn last year and net income by 20 to 40% from CZK 128m. Moreover, Radiokomunikace plans to invest up to CZK 300m into upgrading its network. We see the consolidation of Czech telco sector slightly negative in longer term for Cesky Tel as it may lead to higher competitive pressure on Cesky Tel fixed line segment but should be neutral for today’s trading. We reiterate our Hold recommendation.