Mrs. Strezynska has again threatened TPSA with huge fines for not complying with UKE directives on bitstream access and internet access unbundling. This time the head of telco watchdog has specified the amount of the fine, saying that it could reach the maximum amount allowed by the law, i.e. PLN 360m in one instance and up to PLN 100m in the other. Mrs. Strezynska commented that lower fines are ineffective.
Our view: Despite some hopes for a ceasefire among UKE and TPSA in 2007, there is only evidence of more hostile relationships among the two parties. TPSA has been playing a slowing down tactics with regard to UKE regulatory measures and successfully appealed in courts against previous fines put by UKE. We believe that, also on this particular occasion, the prospect for similar action is already factored in the stock price. Hence, we reiterate our Hold rating for the stock.