UKE has threatened TPSA with a fine for not submitting the terms of use of ‘neostrada’ internet access service. The head of telecom watchdog (UKE) Mrs. Strezynska has insisted on direct control over broadband internet access offered by TPSA, even after the alternative operators were allowed into the market, following bit stream access liberalization earlier this year. EU officials have criticized UKE for excessive regulation, supporting TPSA protests over the issue.
Our view: We view the news as slightly negative, as there seems to be no end of regulator’s pressure on TPSA. On the other hand, please note that UKE aggressive regulatory measures can sometimes antagonize the parties, which theoretically should support it stance, e.g. Brussels regulators. We reiterate our Hold rating for the stock.