TP Group: tighter regulation better than regulatory split

31 Mar 2009

Reuters reports that Polish telecoms group TP Group has said that tighter internal controls will be a much quicker and cheaper way of allaying its dominant market position than dividing the company into retail and wholesale units. The move comes as TP, a unit of France Telecom, seeks to fend off a mandatory split by the regulator UKE. ‘Instead of a split, we propose transparent service for all operators,’ chief executive Maciej Witucki told reporters. ‘Implementing ‘Chinese walls’ and non-discrimination measures could take two years instead of four to five years (under the regulator’s plan) and would cost less. We estimate start-up costs at PLN110-PLN150 million (USD31-USD42 million), with the worst case scenario pegging the costs at a level 60% lower than those of a functional split,’ he said. TP estimates that dividing itself into its retail and wholesale parts could cost PLN750 million. If completed, the split would hand UKE power over the wholesale arm to ensure all operators have equal access to the former monopolist’s network. The watchdog is expected to make a final decision later this year after examining TP’s proposal and holding talks with the company and its rivals.

Poland, Orange Poland