TPSA requests ECU 250 mln EU aid

At a press conference last week, Minister Marek Zdrojewski announced that at a recent meeting with EU Industry Commissioner Martin Bangemann he had asked Phare - the regional development agency run by the European Union (EU) commission - for the subsidy. The money, he said, would be used by TPSA to develop telecom services in rural areas.
The request offended private operators, who insist it's unfair for the national government to request money on behalf of their largest competitor.
"At first we laughed because the proposal seemed too absurd to believe," said Jolanta Ciesielska , public relations director at Netia Telekom, Poland's largest land-line telecom operator. "Then we realized the government was probably serious and terribly unfair. We would never ask for more money, from our subscriber or from the government."
The request also took Radoslaw Czapski, head of the infrastructure and telecoms section of the EC delegation in Warsaw, by surprise. "The (EC) has always considered telecommunications to be a commercially viable sector that is not in urgent need of public funding," he said. "This request looks a bit strange."
In a recently completed "Accession Partnership" report, the EC compiled a list of priority sectors that Poland's government must reform if the country is to enter the EU. Priorities included restructuring the coal, steel and agriculture sectors. Telecommunications was "not even on the list" of top priorities, Czapski said.
"This is a very strange request, especially since the (EC) rarely grants money for specific, commercial enterprises," said Jerzy Kalinowski, director of Price Waterhouse's telecom consulting in Warsaw and project manager in the early 1990s of an $8 million EC project to help establish independent telecom operators in Poland.
The request looks even stranger when one takes a close look at TPSA's balance sheet, Ciesielska said. The public operator pulled in a profit of $358 million in 1997, up 29% from the previous year. During the first two quarters of this year, TPSA's net profit totaled zl. 298.9 million ($85.4 million), up 30% from the corresponding period a year earlier.
Michal Potocki, adviser to the president of TPSA's management board, said he was "unsure" whether the request was the idea of the Communications Ministry or TPSA. "I think it was the idea of the ministry. They're very interested in seeing rural telecoms develop," he said.
Still, the EC money would fit nicely into TPSA's spending plans for this year. In its 1998 budget, the company plans to build 250,000 phone lines in rural areas at an estimated cost of $250 million. (One line costs about $1,000.) "If it happens that we receive this money, then we would certainly be able to accelerate the construction" of those lines, Potocki said.