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148/2010 TP Group and PTC announce intentions for network sharing - Orange Polska

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Pursuant to article 56(1.1) of the Law of 29 July 2005 on public offering and the conditions for introducing financial instruments to the organised trading system and on public companies (Journal of Laws of 2005, No.184, item 1539, as amended), the Management Board of Telekomunikacja Polska S.A. (‘TP S.A.’, ‘the Company’) hereby informs that on December 17th, 2010 TP Group’s mobile entity, Polska Telefonia Komórkowa - Centertel sp. z o.o. (‘PTK Centertel’) and Polska Telefonia Cyfrowa sp. z o.o. (‘PTC’) have signed letter of intent to co-operate for reciprocal use of network infrastructure and radio frequency in Poland.

TP Group and Polska Telefonia Cyfrowa, announce intentions to co-operate by sharing mobile telecommunication network infrastructure and radio frequencies

• Companies to explore telecommunication network sharing opportunities in Poland,
• Upon implementation, co-operation may deliver cost and capex efficiencies of hundreds of millions of zloty for TP Group over the next 5 years,
• Companies filed motion to the Polish Competition Office to approve establishing jointly owned entity to operate the shared networks,

December 17, 2010: TP Group’s mobile arm, PTK Centertel and Polska Telefonia Cyfrowa, two of Poland’s leading mobile operators, have signed a Letter of Intent (‘LOI’) to co-operate for reciprocal use of telecommunication networks infrastructure and radio frequencies. In accordance with the LOI, the Companies have filed a motion to the Polish Competition Office (‘UOKiK’) to obtain permission to establish a joint-venture entity (‘new entity’), with 50% shareholding by each, which would manage, operate and maintain (but not own) parts of their respective radio access mobile networks (‘RAN’), operating in currently owned frequencies (900, 1800 and 2100 MHz) and frequencies possibly obtained by both Companies in the future.

The Parties have declared in the LOI, that upon receiving a positive opinion from UOKiK, they will prepare and agree a detailed basis for co-operation, including articles of association and shareholder’s agreement for the new entity.

Upon implementation, this co-operation initiative is broadly expected to allow TP Group to:
• Create best class mobile networks in Poland and offer enhanced quality of service within the network footprint to improve customers’ mobile experience,
• Widen its coverage area, thus supporting the delivery of new services, including mobile broadband, to a greater number of customers,
• Reduce demand for capital expenditure, through maximizing network efficiency and joint planning of selected new investments and network upgrades,
• Continue to own its network, as no transfer of assets or frequencies is assumed to the new entity,
• Secure network quality of service, through service level agreements and control over the new entity,
• Reduce network operating costs,
• Reduce the environmental impact, through lower total number of sites in operation,

TP S.A.’s Management believes that successful network sharing co-operation with PTC may significantly enhance PTK Centertel’s technical capabilities, while potentially delivering TP Group with cost and capital expenditure efficiencies amounting to hundreds of millions of zloty over the next five years, starting from 2012.

The Parties have agreed that the scope of the co-operation initiative is limited to technical aspects and it is not considered to be extended to other parts of their business activity. Scope of the new entity has been limited to network activities, without any plans for retail telecom market operations.

Forward-looking statement

This presentation contains 'forward-looking statements' including, but not limited to, statements regarding anticipated future events and financial performance with respect to our operations. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like 'believe', 'expect', 'anticipate', 'estimated', 'project', 'plan', 'pro forma', and 'intend' or future or conditional verbs such as 'will', 'would', or 'may‘. Factors that could cause actual results to differ materially from expected results include, but are not limited to, those set forth in our Registration Statement, as filed with the Polish securities and exchange commission, the competitive environment in which we operate, changes in general economic conditions and changes in the Polish, American and/or global financial and/or capital markets. Forward-looking statements represent management’s views as of the date they are made, and we assume no obligation to update any forward-looking statements for actual events occurring after that date. You are cautioned not to place undue reliance on our forward-looking statements.

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