O2 Czech Republic has confirmed it is analysing options to separate its fixed-line infrastructure into a new entity to supply wholesale services.
The Prague-based telco, in which Petr Kellner’s investment firm PPF has a controlling stake, said it will…
O2 Czech Republic has confirmed it is analysing options to separate its fixed-line infrastructure into a new entity to supply wholesale services.
The Prague-based telco, in which Petr Kellner’s investment firm PPF has a controlling stake, said it will decide whether or not to pursue the project once the analysis is complete, noting that it has informed the national telecoms regulator about its plans.
Earlier this week, Czech business publication Hospodarske Noviny reported that regulatory issues, particularly concerning O2’s dominance in the fixed-line space, were a key motivation for the planned split. Kellner also hoped the move would improve the telco’s balance sheet, it added.
Josef Nemy, an analyst with Komercni bank in Prague, said on Wednesday that he saw the split as unlikely, but not impossible.
“Generally speaking, PPF will certainly try to undertake several steps to turn around the negative trends in O2’s profitability and I can imagine they may suggest even such radical steps as dividing the company,” he said.
However, he noted that such a move could encounter opposition from the regulator and minority shareholders. If minority shareholders were against it, Nemy said PPF may not be able to keep both businesses publically traded. In such a scenario, the investment firm could opt to buy out minority shareholders in at least one of the new companies, he noted.
O2 reported revenues of Kc21.77bn (US$1.04bn) for H1 2014, down 8.9% year-on-year. OIBDA was down 12% to Kc7.58bn (US$363.8m).
