* Profit drops on competition, lower prices, one-off factors
* Shares dip 1 percent
(Adds reasons for profit drop, firm confirming outlook, stock
PRAGUE May 7 Telefonica Czech Republic
posted a 35 percent drop in net profit in the
first quarter due to falling prices and one-off factors related
to asset sales and restructuring costs, it said on Tuesday.
The company, majority-owned by Spain's Telefonica,
said its net profit fell to 1.05 billion crowns, below the 1.16
billion forecast in a Reuters poll.
"Without (one-offs), net profit fell 10.9 percent," the
company said in a statement.
The extraordinary factors included the sale of an
information line business in 2012 that raised the comparative
base and a restructuring charge in the first quarter this year.
Telefonica stock dropped 1 percent after the result versus
Monday's close, underperforming the Prague PX index, which
had gained 0.46 percent by 0755 GMT.
The company said it had signed 78,700 new mobile contracts
in the first quarter, reversing a drop of 3,700 in the same
period a year ago.
The Czech mobile market has been facing growing competitive
pressure, especially in recent weeks, with the arrival of
alternative operators and the potential entry of a fourth
full-fledged operator after a frequencies auction later this
That has triggered a price war between the three main
players Telefonica, T-Mobile and Vodafone.
Telefonica said revenue had dropped 4.4 percent to 11.9
billion crowns, a touch below the 11.96 billion estimated in the
Telefonica confirmed its 2013 outlook for a small drop in
its OIBDA (operating income before depreciation and
amortisation) margin from last year's 41.4 percent and
investments below 6 billion crowns.
(Reporting by Jan Lopatka; Editing by Michael Winfrey)