NOM to sue TPSA for loss of earnings
By : Roseanne Gerin
Poland's first independent fixed-line operator to launch domestic long-distance (DLD) services plans to sue state-owned operator Telekomunikacja Polska (TPSA) (http://www.tpsa.pl) for more than zl. 200 million ($50 million) in lost operating revenue.
Niezalezny Operator Miedzystrefowy (NOM) (http://www.nom1044.pl) will inform TPSA of its decision this week, according to company spokesman Marcin Gruszka. He said NOM plans to file a lawsuit to recover costs of technology and lost income if the national operator does not pay. Legal regulations will give TPSA about two weeks to respond before the independent operator is able to file the lawsuit, he said.
NOM said it lost more than zl. 200 million after wrangling with TPSA over interconnection arrangements for most of last year, delaying the launch of its service by 13 months. Michal Potocki, a deputy spokesman at TPSA, said his firm will only comment on the charges after it receives NOM's official notice.
NOM also will file a complaint on Monday with the Office for Competition and Consumer Protection (UOKiK) over what it deems to be TPSA's unfair business practices on the inter-city calling market.
At issue is a recorded message that callers hear when they dial a long-distance number within Poland, giving them TPSA's DLD access code of 1033, but not NOM's prefix of 1044. Since July 1, callers in Warsaw who dial the city code for Wroclaw, for example, automatically hear TPSA's recorded message in Polish, followed by the same message in English instructing callers to "first dial 0 then the access code to the selected telecommunication carrier, for example 1033, the area code and the telephone of the person you want to reach."
Potocki said TPSA could not respond until NOM filed the complaint.
Last Tuesday, Communications Minister Tomasz Szyszko sent Pawel Rzepka, the president of TPSA, a letter requesting an explanation for excluding NOM's operating prefix from its recorded message. Szyszko cited a paragraph from the telecommunications law that domestic operators have a legal obligation to inform their subscribers of other operators' services. Gruszka, however, called the letter "weak" and doubted that TPSA would change its recorded message.
Although TPSA had not received the letter when the Business Journal went to press last week, Potocki said Szyszko only suggested that the national incumbent include NOM's prefix in its message. He added that TPSA included written notifications about the changes in the DLD market and NOM's prefix in its customers' billing statements in May. "We informed our clients according to the obligations we have as an operator," Potocki said. "Our information is just and correct and (what) the regulation demands."
NOM, along with independent telecom operators Netia and Energis Polska, won a tender for DLD service in January 2000, each paying e23 million per license. NOM received its license from the Communications Ministry in May 2000. The service rollouts of all three operators have been delayed, however, mainly due to disputes with TPSA over interconnection arrangements, which they need to plug into the incumbent's national telecom network.
NOM also lashed out at TPSA for charging interconnection tariffs of zl. .05 per call, an amount higher than those in Western European countries, Krzysztof Makowski, a member of NOM's board said at a press conference last week. NOM wants the fee reduced to zl. .02 per call, he said.
Potocki, however, said the Communications Ministry set the interconnection tariff as a "a sort of compensation for the deficit of the local access network." He added that the fee would be lowered in the future as the national network was built up.
"We can't compare with prices in Western Europe because the development of the local network is different (there) than in Poland," said Potocki, adding that there are about 40-50 fixed-line phones per 100 inhabitants in most Western European countries compared to Poland's average of 28-30.
TPSA lowered its DLD calling tariffs on July 1 in selected regions of the country to match NOM's rates, which are 10% less than TPSA's previous standard fee. On Sept. 1, TPSA will offer the same prices throughout the country as well as lower prices than NOM for certain peak-hour DLD calls, Potocki said.
Nevertheless, NOM said it plans to capture a "few to several percent" of the inter-city calling market, which it estimates to be worth about $400 million. The telecom operator is owned by state-controlled Polish Power Grid (PSE) (50%), oil giant Polski Koncern Naftowy Orlen (PKN Orlen) (35%) and telecom firm Tel-Energo (15%). PKN Orlen will add zl. 100 million ($25 million) this year to NOM's operating capital of zl. 140 million ($31.3 million), Makowski said. He added that NOM should be profitable by 2003.
Meanwhile, Netia plans to offer DLD service in August under the access code 1055, while Energis said it would offer service either in the third or fourth quarter of 2001 under the prefix 1066. Under the Telecommunications Law, Poland's inter-city calling market will be fully liberalized on Jan. 1, 2002, when only permits instead of costly licenses will be required.
