UKE seeks fine deal

Telecoms regulator UKE last month hinted it may reduce fines imposed on Poland's largest phone company Telekomunikacja Polska (TP) in exchange for infrastructure investments. The regulator's head, Anna Streżyńska, told PAP news agency she would reduce the telecom's zł.100 million fine "to a minimum."

She explained, "In cases where the breach [of regulations] has been resolved, under the condition that funds are given for investments defined by UKE ... we can consider a reduction in the fine."

The fine was part of more than zł.500 million in penalties that UKE has levied against TP, which the firm is fighting. The fines have had a strong impact on the firm's performance, recording its first increase in revenues since the end of 2006 last month in its Q1 results. The group's revenue rose by two percent to zł.4.53 billion, while the market was expecting a fall.

The group's revenues were mainly boosted by its mobile telephone arm Centertel, which saw a turnover rise of 12.6 percent to reach zł.2.09 billion in Q1.

TP executive director Ireneusz Piechuch told Thomson Financial News the firm was interested in negotiating with Streżyńska, but maintained that it had strong legal grounds for having many of the fines imposed on it overturned.

"When it comes to the issue of fines, the latest statement from the European Commission shows the legal standing of TP ... has very strong legal grounds," he said. "We are prepared to enter the proposed talks unconditionally."