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SECURITIES

Ministry to get rid of Telecom stake

In the face of repeated criticism from the European Commission, the Slovak ministry in charge of telecommunications announced it will dispose of its 34-percent stake in Slovak Telekom.

In the face of repeated criticism from the European Commission, the Slovak ministry in charge of telecommunications announced it will dispose of its 34-percent stake in Slovak Telekom.

A transfer of shares is being prepared, said Transport, Post Office and Telecommunications Ministry spokesman Marian Jánošík, but he did not specify to whom the shares would be transferred.

"For the moment we will not provide any information about the time schedule or any other details," Jánošík told the SITA news wire.

The European Commission and independent operators have long criticized the ministry because it funds a telecom regulator - the Telecommunications Bureau (TÚ) - and, at the same time, is a shareholder of a significant telecom firm - Slovak Telekom.

In its latest report on EU telecom markets, published on March 29, the commission criticized the lack of independence of the Slovak and Polish regulators.

The Slovak government controls an additional 15 percent of Slovak Telekom through a national privatization agency, the National Property Fund. The majority owner of Slovak Telecom is German telecommunications giant Deutsche Telecom, which has a 51-percent share of the company.

According to Jánošík, the merger of TÚ with the Postal Services Office that will happen this year could also help solve the problem. The ministry has not yet specified whether the new office will be financed by the ministry or independently.

The new head of the office, Branislav Máčaj, said he also wants to push through financial independence.

"The EC regularly repeats its criticism that the Slovak regulatory body is not independent enough," said Máčaj, who was elected to the post by parliament in December. "I also do not consider the position of the Slovak Telecommunication Office as ideal. I can see one possibility for solving this situation being drafting legislation around the merger of the telecommunication regulator with the postal services regulator."

Transport, Post Office and Telecommunication Minister Ľubomír Vážny has called the EC's repeated criticism groundless.

"The European Commission regards the present state as dependence, but I do not see any dependence so far," Vážny told the SITA news wire in October.

According to Vážny, the problem in the model under which the Telecommunications Bureau will be self-financed is the fact that the office will not be able to issue binding regulations, which would limit its overall jurisdiction.

"Such independence is being dictated to us now, but it will not help anyone," Vážny said last year.

He said the ministry never interfered with TÚ independence, but created conditions that respected the regulator's independence.

Other ministry representatives have said the law governing the merger of the telecommunication and postal services office is expected to be presented to cabinet in the third quarter of this year, but the ministry should try to speed this process up.

Slovak Telekom is the largest telecommunication operator in Slovakia. Mobile operator T-Mobile also belongs to the ST group.

Last year, Slovak Telekom increased its before-tax profit to Sk2.22 billion, with earnings amounting to Sk30.5 billion.

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