PRAGUE, April 11 Telefonica Czech Republic
cut its mobile voice and data prices on
Thursday, spurring its main peers to announce similar steps in a
market often criticised for a lack of competition.
The step could hurt operators' margins but the share edged
up, recovering further from a nine-year low earlier this week.
Telefonica Czech Republic chief executive Luis Malvido said
the firm would simplify its offering, introducing three basic
voice and data packages priced from 249 crowns to 749 crowns
($12.58-$37.84) per month, and would stop subsidising handsets.
The top package includes unlimited call time and text
messages and 1GB of data.
Telefonica Czech Republic's shares rose 1.9 percent to
279.20 crowns, outperforming other Prague stocks.
Ceska Sporitelna analyst Petr Bartek said the initial impact
of the price cut on earnings before interest, tax, amortisation
and depreciation could be in the high single digits, while
prices could be cut by 10 percent or more.
"The newly offered price package ... is close to prices in
Austria which is seen as a highly competitive market," he said.
He said the price cut was seen as reaction to new proposed
conditions for a planned auction of additional mobile
frequencies that could lead to the arrival of a new player.
The margin cut could make it more difficult for the
potential new entrant, expected to be investment group PPF, to
win customers from incumbents Telefonica, T-Mobile
Vodafone said it would introduce a similar package for under
700 crowns in the coming weeks, while T-Mobile also said it
would announce a similar offer in the coming days.
Telefonica is 69.4 percent-owned by Spain's Telefonica,
which is seeking ways to reduce debt. Brokers have said selling
part of its Czech holding could be one of the options.