Polsat, the largest commercial competitor of TVN announced that it would increase its advertising prices by 19 % on average starting from October, according to ‘Gazeta Prawna’. Polsat move follows similar price rise by TVN. Public television also indicated plan to raise its prices by up to 30%. Polsat representatives reiterated plans for an IPO in 2007.
Our view: The price increase reflects strong demand for TV advertising in 2H06, As expected, none of the competitors chose to undercut rivals by offering lower prices. Still, we view the news as slightly positive. Nonetheless, we reiterate our Hold rating for the stock.