HC2 unveiled new cheaper fares - lzee precise impact is hard to predict
Telefonica CR yesterday unveiled the new flat tariffs, which wants to attract new customers. With this step we believe that the competitive pressure on the domestic telephony market is getting tough. Lower prices will in our view continue to put pressure on the profitability of mobile operators. On the other hand, we believe that a margin squeeze is already zaceněno in the projections.
In a separate report, CEO of Telefónica Czech Republic said that ¨ the new auction rules will negatively affect the company's business plan and that the company would consider all options (Bloomberg).
We are surprised that the new tariffs of Telefónica Czech Republic are cheaper than comparable in Austria, the local market is considered very competitive. We expect a decline in average revenue per user and higher utilization of calls outside the network (hence higher interconnection costs excluding prices for call termination). This could in the future bring pressure on EBITDA margins.The introduction of new tariffs is likely preparation / prevention of the expected input 4 operator on the market. Comments CEO is in line with our view.
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