O2 Czech Republic considers break-up

O2 Czech Republic considers break-up

13 AUG 2014

Czech financial group PPF is mulling whether to split O2 Czech Republic into separate mobile and fixed businesses for regulatory reasons, according to a local media report.

The move is interesting because so many operators, such as Vodafone Group, are heading in the opposite direction through the acquisition of fixed networks in order to offer quadplay services to end-users.

But Hospodarske Noviny reports that PPF, which acquired O2 Czech Republic from Telefonica earlier this year, might split off one unit to focus on mobile and other services while a second would contain its fixed lines and infrastructure.

However the operator does not appear to have made a final decision. “Nothing has been decided. At the moment it is speculation in the market,” a spokesman for the operator told Reuters.

The thinking is that the operator is currently subject to regulatory oversight because of its dominance in the country’s fixed market. A split could lessen the scrutiny and give O2 Czech Republic more flexibility.

In contrast, operators such as Vodafone have sought to increase their control over fixed infrastructure, for instance by acquiring cable television operations. The difference is the mobile operator in such a scenario is unlikely to be judged dominant by regulators.

PPF, which is owned by the country’s richest man, Petr Kellner, completed the acquisition of a 66 per cent stake in O2 Czech Republic in January. In July it increased its stake to 73 per cent via a mandatory offer to minority shareholders.

In addition to looking for greater regulatory wriggle room, the Czech operator is trying to re-imagine its business model in other ways, for instance by striking a 4G network-sharing deal with Deutsch Telekom’s T-Mobile.

One operator adopting a closer approach to O2 Czech Republic is America Movil, which has been tagged as dominant in Mexico’s mobile market. Its solution is to sell assets to reduce its market share below 50 per cent.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

Read more

Related

Tags