O2 Czech Republic could be broken up by PPF

14 Aug 2014

Czech investment group PPF is considering plans to split O2 Czech Republic (formerly Telefonica O2 Czech Republic) into two parts, the business daily Hospodarske Noviny reported yesterday without stating its sources. Under the plan, PPF would apparently look to hive off the telco’s fixed line and infrastructure business into one entity, while setting up a separate business covering its mobile and other services, the newspaper claimed. PPF has declined to comment on the rumour, while O2 Spokesman Martin Zabka said: ‘Nothing has been decided. At the moment it is speculation in the market.’ The paper speculates that a move to break up O2 Czech Republic could free it from regulatory oversight, which applies to its monopoly in the fixed line market.

TeleGeography’s GlobalComms Database writes that in January this year Telefonica of Spain completed the sale of a majority stake in its operations in the Czech Republic and Slovakia to investment group PPF, controlled by the Czech Republic’s richest man Petr Kellner. The deal, valued at CZK63.6 billion (USD3.05 billion), was cleared by the European Commission (EC) earlier that month. PPF acquired a 65.9% interest in the then Telefonica Czech Republic, which owns 100% of O2 Slovakia, and raised its stake to 73.1% in July, in a mandatory buyout offer to minority shareholders. O2 Czech Republic posted a smaller-than-expected 9.5% year-on-year decline in net profit in the second quarter, impacted by a further drop in mobile and fixed line revenue.

Czech Republic,O2 Czech Republic,

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