2/15/2008

Poland backs push to split phone groups -officials

Poland continues to support a European Union initiative that would allow regulators to split dominant phone operators to boost competition, officials said on Thursday.

The minister of infrastructure sparked concern earlier this week that the new government was shifting its stance on the split of TPSA's TPSA.WA network and business activities, saying that current Polish law did would allow it.

The telecoms regulator chief quickly reacted to the comments, by threatening to resign if the government pressured her to drop plans to split the dominant operator, which is controlled by France Telecom (FTE.PA: Quote, Profile, Research).

But Infrastructure Minister Cezary Grabarczyk said that it was up to the regulator to decide whether to divide the former monopoly.

"This is the domain of the regulator. We're only commenting on this from a legal perspective," Grabarczyk told reporters.

His deputy said the government backed the proposed EU regulation which would give national watchdogs the right to divide telecoms companies in the interest of competition.

"The Polish government supports the European Commission's initiative which would introduce the regulatory ability of separation," Deputy Infrastructure Minister Andrzej Panasiuk said.

Telecoms regulator chief Anna Strezynska has targeted TPSA since taking office in 2006, levying more than 500 million zlotys ($203.7 million) in fines and calling for an eventual split of the company's network and business arms.

A new separate network company would be required to charge competitive rates to both its sibling and its competitors.

The EU debate on so-called functional separation has prompted protests from former state-owned telecoms giants and countries such as Spain and Germany, who say separation would harm incentives to invest in new technology networks. (Editing by Quentin Bryar)

Source: By Marynia Kruk, reuters.com



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