Mrs. Strezynska met with TPSA management yesterday to discuss the progress in implementing new framework agreements between the incumbent and alternative operators. The head of telecom watchdog has expressed her criticism at the speed of implementing recent UKE directives, on local loop unbundling for example. She has said that TPSA would be faced with up to 7 fines if still not complying with UKE rulings.
Our view: Mrs. Strezynska has not specified the amount of the possible fines. We estimate that the total amount of fines faced by TPSA could rise from PLN 0.4 bn to PLN 0.6 – 0.8bn. However, please note that TPSA has successfully appealed in courts against previous fines put by UKE recently. Therefore, although we view the news as negative, we do not expect any major price impact, as TPSA stock price has proved resilient the new fine announcements lately. We reiterate our Hold rating for the stock.