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TPSA sales seen down on regulatory cut

WARSAW - Poland's biggest telecoms group TPSA is seen reporting a decline in revenue as the regulatory decision to cut mobile termination rates (MTRs) hurt its wireless unit.

The operator is expected to post third-quarter revenue of 4.569 billion zlotys ($1.5 billion), down 1.7 percent from a year ago, according to the average forecast in a Reuters poll of nine analysts.

‘For the third quarter we forecast a fall in group revenues primarily due to slower forecast growth in cellular revenues,’ UniCredit analyst Anna Bossong wrote in an earnings preview.

‘This should arise from the 17 percent cut in MTRs on May 1 and weaker year-on-year subscriber growth.’

Encouraged by revenue rise in the first half of 2008, TPSA, the former communist monopoly now controlled by France Telecom, said it saw its closely-watched top line remaining flat this year versus earlier expectations of a 1 percent fall.

But the telecom watchdog's decision in May to slash MTRs, the rates mobile operators charge their competitors for allowing calls into their network, will likely weigh on TPSA's mobile unit, where growth has helped offset falling fixed-line sales.

Analyst expect TPSA's net profit to come in 3.3 percent lower at 623 million zlotys, with EBITDA, or earnings before interest, tax, depreciation and amortisation down 2.8 percent to 1.995 billion despite a boost of around 40 million from the sale of TPSA's real estate.

Helped by its share buyback program and defensive fundamentals, TPSA remained resilient in the face of equity selloff, falling around 15 percent since the start of the year, compared to a 53 percent decline for Warsaw's blue-chip WIG20 index.