Eurotel announced its decision to cease voice traffic in older analogue technology NMT network at the end of June. The decision came as this network is outdated and costly to operate. Number of customers has been steadily declining and migrating to modern technologies of GSM and recently to UMTS. CDMA technology that use part of NMT network will continue to operate as number of customers surpassed 80,000. In addition Eurotel plans to further reinforce its current network for CDMA use in 53 locations by the end of June.
Separately, Cesky Tel plans to decrease prices charged to other operators for ADSL services by CZK 22 which will be also reflected in end-user prices. We see these news as neutral for today’s trading and reiterate our Hold recommendation with fair value CZK 510.