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UPDATE 1-Czech lower house approves bill allowing higher fines for telecoms firms
May 24, 2017 / 9:32 AM / 7 months ago

UPDATE 1-Czech lower house approves bill allowing higher fines for telecoms firms

(Adds details, background)

PRAGUE, May 24 (Reuters) - The Czech lower house of parliament approved a telecoms bill on Wednesday that opens the way for higher fines for operators and boosts customer rights, getting through a major piece of legislation before an October election.

Network operators O2 Czech Republic, Deutsche Telekom’s T-Mobile and Vodafone have been under fire over data prices, criticised by politicians and customers as some of the highest in the European Union.

The bill enables the Czech Telecommunications Office (CTU) to impose a fine of up to 10 percent of a company’s net revenues in the country, which could be doubled if it commits another offence within two years of the first one.

O2 Czech Republic reported revenues of 37.5 billion crowns ($1.59 billion) in 2016, compared with T-Mobile’s 26.5 billion crowns.

Fines are currently capped at 40 million crowns.

Also under the law, operators would also have a maximum 10-day period to release customers from their contracts, instead of the current 42 days.

The bill now goes to the upper chamber, where it is expected to be approved, before heading for the president’s signature to put it into a law.

Analysts have viewed the new bill as a negative for the operators. O2 Czech Republic’s Prague-listed stocks were down 0.3 percent on Wednesday. They have risen 7 percent so far in 2017, supported by a generous dividend policy.

Data prices have became an issue this year in the early run-up to a national election this autumn.

Prime Minister Bohuslav Sobotka has presented the law to voters as a way to cut prices. Earlier this year, he sacked Industry Minister Jan Mladek, a Social Democrat party colleague, over lack of activity on the issue.

While the bill got broad party support, Sobotka is hoping it will boost Social Democrat support as his party trails ruling partner ANO by a wide margin in polls.

ANO’s leader and founder is billionaire businessman Andrej Babis, who serves as finance minister but is due to be dismissed later on Wednesday as part of an agreement ending a government spat.

Babis has faced accusations of dodging taxes and interfering in a newspaper he owns. He has denied wrongdoing but Sobotka has demanded his dismissal.

$1 = 23.6420 Czech crowns Reporting by Robert Muller; Editing by Jason Hovet and Mark Potter

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