In respone to TPSA's query, the European Commission said that The Office of Electronic Communications (OEC), the parent body of the UKE, should not ask TP to submit all price lists of services for approval with no exceptions. European law does not entitle the regulator to do that, saying that the regulator is reponsible for supervising the reasonability of retail prices only in the case of universal services.
The UKE ordered TP to submit its service price list for approval as a punishment for introducing a promotion lowering neostrada (DSL) prices in July without prior approval from UKE, thereby limiting the impact of the UKE's decision on bitstream access. However, neostrada is not a universal service. Moreover, according to EU regulations, prices of other voice services may only take place after the completion of analyses of the relevant retail markets, which has not yet been done.
Our view:
We do not expect material trading impact from this development today. However, we view it positively in the long-run as EU endorsement of TPSA's legal stance with respect to the regulatory changes in Poland could help ease the UKE's aggressive stance towards TPSA. Any moderation in the regulatory decisions should provide upside to TPSA.