Netia debuts on Warsaw exchange
Netia's debut on the Warsaw Stock Exchange (WSE) last Tuesday positioned the company as the main competitor to national telecom incumbent Telekomunikacja Polska (TPSA) in Warsaw's calling market, telecom analysts said last week.
"What Netia has to concern itself with is competing with TPSA for the next several months," said Peter Karli, a telecom analyst at the Budapest office of Wood & Co. "Netia is now a step ahead of TPSA because (despite) TPSA's big capacity in its broadband network, it's not up to date."
The country's largest private fixed-line operator plans to use the proceeds from its new 2.25 million share issue on the WSE to pay for the rollout of its Warsaw service and the expansion of its fiber-optic network. Netia received a license to provide local calling service in the lucrative Warsaw region on June 30. The company will start offering service within 10 days, Meir Srebernik, Netia's president, said at a news conference last Tuesday. Netia expects to have about 7,000 subscribers in Warsaw by the end of the year.
Netia has completed the first phase of its 120-kilometer fiber-optic network in Warsaw, Srebernik said. One-third of the network is expected to be finished by the end of the year, with the entire project wrapped up in 18 months, he said. As part of its strategy, the company wants to offer bundled services of local calling, domestic long-distance and data transmission service to attract business and residential customers.
In a countermove, TPSA announced last Monday that it signed a o17.7 million contract with Lucent Technologies to build a high-capacity optical backbone network linking more than 20 cities. The network will provide voice and data transmission services to TPSA's residential, business and service provider customers.
"TPSA can really see that Netia will be its competitor in the local market," said Michal Marczak, a telecoms analyst at BRE Bank Securities. "This is why TPSA wants to invest in broadband."
Netia received an IP (internet protocol) license from the Communications Ministry in April 1999 to provide nationwide data transmission and internet-based services. Following the receipt of the license, Netia started constructing a national fiber-optic backbone to connect Poland's 10 largest cities. "From the beginning Netia has tried to roll out an IP network," Karli said. "Now TPSA is rushing to do the same."
Netia became the 15th company to join the WSE's SiTech index of high-tech and telecom stocks, and began trading last Tuesday at zl. 117 ($27) per share. The company has been listed on the U.S. Nasdaq market since last July. Netia holds 24 operating licenses for local telephone services and has 300,000 customers across the country.
In addition, the company is focusing attention on other telephony services as part of its overall strategy. Earlier this month, Netia started offering domestic long-distance service with pre-paid calling cards. The company also plans to enter a bid for one of the four or five Universal Mobile Telecommunication System (UMTS) licenses that will be offered later this year by the Communications Ministry, Srebernik said.
