‘Play’, the fourth mobile operator in Poland, owned in 23.4% by Netia, is scheduled to officially announce prices of its services today. According to today’s ‘Gazeta Prawna’ daily, P4 would charge PLN 0.49 per minute of outgoing calls to other networks. The rival operators charge between PLN 0.59 and PLN 0.80 per minute in pre-paid plans and between PLN 0.60 and PLN 0.75 per minute in post-paid plans. Against that backdrop, P4 would offer 17-39% price discount versus prevailing market prices.
Our view: We remain sceptical on the prospects for ‘Play’ launch. Apart from high promotional bill, PLN 250m for 2007, the successful launch would require undercutting rival operator prices, resulting in a prolonged period of operating losses for P4. We reiterate our Sell rating for the stock.