To buy or not to buy
The old Chinese curse about living in interesting times can certainly apply to beleaguered telecom monopoly Telekomunikacja Polska (TPSA) at the moment.
Its future is in doubt, its strategic partner, France Telecom (FT), appears to be lukewarm about a further stake and other telecom players are lining up to take legal action over the monopoly's alleged unfair business practises. No wonder its stock price has tumbled by 41% this year to an all-time low.
Last week, speculation was rife over the lack of decision-making by FT to buy a stake in TPSA, which has a 95% stranglehold on the telecom market. The French telecom giant bought a 35% stake last year with an option to purchase a further 10% at about zl. 40 per share 2.5 times the current market price as part of the original privatization deal. But with TPSA shares currently trading at zl. 16 per share, FT is understandably lukewarm about the sale and has until Aug. 1 to decide.
To put pressure on the French, the treasury has issued veiled threats about selling the stake elsewhere if FT continues to dawdle. Treasury Minister Aldona Kamela-Sowinska has said she could issue exchangeable bonds of up to 30% of TSPA's shares if FT refuses to buy.
But with the July 31 deadline up this week, FT will also be mulling over recent pronouncements by politicians to split up the monopoly. And while the legality of this has to go through various official channels before any split is allowed to go ahead, few MPs seem to have given FT a thought when issuing platitudes about TPSA's impending doom as a single entity. Any break-up of the company, however, will inevitably violate previous agreements with the company's strategic investor.
Nevertheless, a split does now seem inevitable. Last week at the British-Polish Chamber of Commerce breakfast, Wieslaw Kaczmarek, pipped to return to his post as treasury minister in a new Democratic Left Alliance (SLD) government, reiterated his decision to break up the monopoly if, or when, he gets into office. The treasury, which is relying on revenue for TPSA's sale to FT, is no doubt praying that no Frenchmen turned up for Kaczmarek's speech. Meanwhile, any attendant reps from the smaller telecom players, who claim TPSA is using a raft of measures to squeeze them out of business, will have choked with delight on their bacon and eggs.
