Telekomunikacja Polska to separate its retail sector by mid-2008

An announcement was made on Monday stating that a decision will be made concerning the separation of the Telekomunikacja Polska sectors by mid 2008.

Anna Strezynska, director of the Urzad Komunikacji Elektronicznej (the Electronic Communication Office – UKE), made the announcement on TVN CNBC early this week. She stated that the decision to separate Telekomunikacja Polska would be made by mid-year, while analytical research will be conducted throughout the beginning of 2008 to determine what benefits the separation will bring to the consumer and to the company.

Strezynska also added the current discussions are more concerned with separating the operational, rather than the structural, elements of the company.

According to Gazeta Prawna most experts are of the view the structural process should be made separate from the operational element. The operational element includes retail and wholesale, which, according to analysts, should function separately from the structural side of the telecommunication company. The biggest single share holder in Telekomunikacja Polska is France Telecom with 47.5 percent of the shares in the company.

Some 3.87 percent of the shares are owned by the state, while the remaining 48.6 percent are owned by various other private shareholders. Telekomunikacja Polska made a debut on the Warsaw Stock Exchange in 1998. Strezynska has assured she is supporting the separation of the operational element of the company.

After analyzing the pros and cons of the decision, Telekomunikacja Polska will not want to make a decision that is against the European Commission, which has supported the option of separating the operational element of the company, according to Strezynska.

Although restructuring may be in the cards for the company, it is a decision which will be more time consuming and involve a higher level of risk. According to the UKE’s director, restructuring could take up to four years.

A separation in the operational element in Telekomunikacja Polska will mean a separation of the units responsible for the company’s retail sector. Separation would mean Telekomunikacja Polska would have to operate its retail sector by playing the same rules as those played by other operators on the market.

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