First of all, there is no doubt that CESKE RADIOKOMUNIKACE a.s. is playing a very important role in the telecommunication sector in the Czech Republic. Could you give us a brief historical background of CESKE RADIOKOMUNIKACE a.s.?
The company was established on January 1, 1994, on the basis of privatization of the former state enterprise Správa radiokomunikací Praha which was founded in early 60´s. Our predecessor had all the monopoly for the radiocommunication services mainly radio and television broadcasting in the Czech Republic. Through the privatization the position of company was strengthened in the area of telecommunication services .. We have established nationwide telecommunication network and we provide the services as transmission of data, voice and other kind of signal. CESKÉ RADIOKOMUNIKACE a.s. maintained its dominant position in TV and radio signal transmission market in the Czech Republic and positioned itself as one of the leading providers of a broad range of telecommunications and data services.
Our readers are businessmen and they like figures. Could you give us a brief overview about your financial results?
The achieved financial results are in line with our expectations, in light of the Company´s growth strategy and the recent development in the Czech telecommunications market..
We have achieved a continued increase in the main financial results with total revenues up 7,4% to CZK 2, 281 million ( USD 63,4 m) compared to the year end 1998
Net Profit (including Net Profit from Associates) increased by 18,1% to CZK 607 million (USD 16, 9 m)
Revenues from telecommunications services rose slightly by 1,5% to CZK 579 million (USD 16, 1 m) Reason for this slight increase is gradual change- over of one important customer CESKY TELECOM former SPT Telecom to its own transmission network.From this reason we have lost a lot and we have to balance this with other activities and customers. On the other hand we have achieved a significant increase of revenues from data services provided over our RadioNET network up 34,2 % to CZK 312 million (USD 8,7 m)
The telecommunication sector is going to be liberalized soon. What are the main guidelines of your strategy in order to fulfill the liberalization?
I would like to point out that Czech telecommunication market in the Czech Republic is practically liberalized excluding public voice telephony service, where up to end of year 2000 is monopoly of CESKY TELECOM. CESKE RADIOKOMUNIKACE a.s.comparing to CESKY TELECOM is a typical provider of services for the companies this is carriers to carrier. We are not offering the services to the individual user and this is the difference between us and the CESKY TELECOM.
Our company is building and developing our multifunctional telecommunications network and we have proved our ability to exploit a huge potential of the Czech telecommunications market in line with the expected market liberalization as well as the general prospects of the telecommunications area locally and internationally. Our aims is to develop the CESKÉ RADIOKOMUNIKACE a.s. Group with our subsidiaries to provide customers with a wide offer of first rate services based on modern technologies in all main areas of telecommunications including data, voice and mobile communications.
Together with TeleDenmark, our second major shareholder, we have established Contactel as a daughter company which will be offering the public voice telephone services and compete on the liberalized market.
Some people say that CESKE RADIOKOMUNIKACE a.s. is like finance holding. Do you confirm this?
I would not say that, we have already chosen the particular holding structure but we are not going in that direction. We are the actual owner of the high-quality modern network which we are going to offer not only to our subsidiaries but also to the other companies in the market.
Few days ago the new telecommunication law was voted in the parliament. What is your opinion about that law and what has been the main consequences for CESKE RADIOKOMUNIKACE a.s.? The news from yesterday were that your shares has dropped by 18%. What is your reaction to this?
The law was born in a very difficult environment and we are not the only one company who had a lot of comments about this law. We are not content because this law is postponed the possibility of the Open Network Provision mainly the free selection of the operator for the final customer starting in January next year. Obviously our subsidiary Contactel will have hard times. If I should speak just for us as CZECH RADIOKOMUNIKACE,a.s. the conditions now are harder than they were before this law was put into practice. For example we have to pay to the owners of place where we have build our small TV towers . Before we were able to build them in the places where the signal was the best and the fee for that was regulated but now the owner ot the actual place might not agree with the building of the tower there or require enormously big amount of money.
Our regulator now is in accordance with new telecommunications law will demand fees for everything, mainly for the frequency band usage. Before we only had to pay for Radio and TV broadcasting of signal for private subjects and owners of licenses.
| But both CESKY TELECOM and CESKE RADIOKOMUNIKACE a.s. are owned by the state. So, how do you explain such a decision, such a law?
As I was pointing out before the bad condition for us went into practice because we are trying to make laws in accordance with the European Union laws and it is obvious that the owner of the property should have his own voice whether he wants to build something on his own land or not. So even though this is bad for us I think it is actually a good law. This is a process of the harmonization with the European directives and legal system.
Do you estimate that the Czech Republic is well advanced in the harmonization process to fulfil the European laws? Or what still has to be done?
There is a great part of people complaining because it will be very difficult for the newcomers, new companies such as Contactel or Aliatel to compete from the very beginning when there is full liberalization of the Czech market in the 2001 and it will not be secure in the full range this open network provision. This is very disputable free selection of the operators , the key portability of number and condition for the interconnections. That is the reason why this new subjects as Contactel are complaining because it will be advantage for the incumbent operator CESKY TELECOM. The Czech Republic is well advanced in the liberalization of the telecommunication market and this new law is actually tying it up with the directives of the European Union.
Concerning the privatization, you had very important Extraordinary meeting of shareholders last week It was planned to increase your shares into RadioMobil. Is it confirmed and what are going to be the next steps of this process?
This meeting was to inform our shareholders that we want to acquire majority in our daughter company RadioMobil . When the meeting was finished we came out with the offer to C-Mobile . We are expecting response from C-Mobile by the 3rd of April. Then we expect a very interesting period to see whether we get into debts or whether we will actually start to gain some money.
Another hot subject at the moment is the privatization. When we met Mr. Mladek, deputy minister of finance, he told us that he wanted to sell 51% of shares of CESKE RADIOKOMUNIKACE a.s. to one strategic investor. Is it still the case or what are going to be the next steps of the CESKE RADIOKOMUNIKACE a.s. privatization process?
In accordance with the fact that government guaranteed our loan which we took to be able to make this offer, government has changed its resolution about the privatization of the CESKE RADIOKOMUNIKACE. Before we were supposed to be privatized on the open public market with 13% going to TeleDenmark to hold the minority but now it looks like that the whole 51% packet should be sold out to one strategic investor. You also ask about our waiting for C-Mobile response, so during April we expect some specifications of what is going to happen to this 51%.
The Deutsche Telecom and Tele Danmark are the best on the list, aren't they? Or are there also other partners?
I think that at the moment the government is not thinking only about these two main companies but about much wider spectrum of the telecommunication companies and this should be specified in conditions which should appear in April.
Our readers are always interested in new business opportunities, in which areas of your activities are you interested to attract some partners or some investments?
Obviously we are looking for some investors. So far our attractivness was in our shares in RadioMobil but it is going to be modified. Our main concern now, will be to support our daughter company Contactel, especially in its aiming to final customers of either Internet or voice services. But we do not want to leave the field of mobile phones entirely so even though we have only 39% left, I still hope that it is good enough to attract some potential investors. In the network of CESKE RADIOKOMUNIKACE a.s. we are not only concentrated on the transmission of signal through our microwave radio- relay network but also in enlargement and increase capacity using the fiber optic network .
As a more personal issue, being a General director of CESKE RADIOKOMUNIKACE a.s.what has been your most satisfying personal achievement or success story?
What I perceive to be our biggest success is that in 1998 we managed to break through into London stock exchange and therefore increase our basic capital, so the demand of the investors were more than 6 times higher than the offer of CESKE RADIOKOMUNIKACE a.s.. This brought us the financial profit so now we are one of the few Czech companies which are not in debts and on contrary we have sources for the investments to our growth.
As a final issue Mr. Curin, what would be your final message to our readers?
The environment for potential investments is getting better in the Czech Republic, so they should not be afraid to come here, because the market is ready for them to come. |
