TPSA head unlikely to change tack
Marek Józefiak, the newly appointed president of Telekomunikacja Polska (TPSA), is unlikely to introduce any major changes in the telecom giant's strategy, but financial markets expect to see greater transparency at TPSA under his leadership, analysts said last week.
Józefiak, the chief executive officer of TPSA's mobile subsidiary PTK Centertel, replaces Paweł Rzepka, who resigned last week for personal reasons after four years as head of the company. Józefiak will continue as president of the mobile unit.
TPSA's supervisory board also appointed investment banker George Storożyński as chief financial officer, replacing Finance Director Donald Chodak. It dismissed Marian Ogonowski, the company's director of human resources and logistics. The appointments came a week after the government finalized a deal for the sale of a 12.5% stake of TPSA to France Telecom and conglomerate Kulczyk Holding. The deal brought the two firms' joint share to 47.5%.
TPSA said last week that it planned to restructure the company to make it more competitive. But analysts said they expected TPSA's strategy to remain the same under Józefiak, who will inherit TPSA's massive capital expenditure, declining revenues from its fixed-line business, bloated staff and loss of clients to mobile operators.
"There's no magic wand (Józefiak) will wave to make things better," said Bob Creamer, a telecom analyst at Raiffeisen Capital & Investment in Warsaw.
Among the more pressing issues the new president will have to contend with are TPSA's overstaffed operations and growing competition from the mobile phone sector.
TPSA must move quickly to cut staff and reduce its costs, analysts said. The company had 69,000 employees at the beginning of the year, but it should have an "economically justifiable" work force of 40,000-45,000 employees, said Włodzimierz Giller, a telecoms analyst at Erste Securities in Warsaw.
By December, the company plans to reduce its head count to about 61,000 employees. Because TPSA made an agreement with trade unions not to lay off any workers before 2004, the company must pay redundant employees huge severance packages, increasing expenditures.
Competition from mobile operators is also a problem as more customers are swapping fixed lines for cell phones. "Products like fixed-line telephony have no chance to compete," Giller said. "(TPSA must) introduce new services to stop fleeing clients. The problems TPSA faces are common to all European telecoms that are under pressure from mobile telecom competition."
TPSA has more than 10 million fixed-line subscribers in Poland. Earlier this year it increased its subscriber fees, driving some 400,000 clients to its competitors, the company said.
Despite these problems, analysts said they expect Józefiak and Storożyński to improve communication ties with the financial market.
"TPSA wasn't good in the past with its (former) CFO explaining financial policy to the market," said Anna Bossong, the director of Eastern European telecom research at CA IB in London. She added that greater communication is now expected under Storożyński as he was a former investment banker at Societé Générale in Warsaw and an adviser to the Treasury Ministry on the government's previous sale of TPSA shares to the France Telecom-Kulczyk Holding consortium in July 2000.
Roseanne Gerin
