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Net strike, telecom turmoil in Czech Republic

November 13, 1998
Web posted at: 11:25 AM ET

by Peter Shadbolt

PRAGUE (IDG) -- Internet service providers in the Czech Republic will meet with deputies of the Czech monopoly SPT Telecom Thursday to discuss alternatives to a planned 62-percent price hike on fixed-line telephony services in 1998 that providers say will price the Internet out the reach of Czechs.

Czech providers Wednesday threatened a nationwide Internet boycott on Nov. 18 involving an estimated 32,000 users unless SPT Telecom makes an exception for Internet users.

SPT Telecom, however, said it will not have the technical capability to distinguish between a normal phone call and an Internet connection until next year, when it is expected to upgrade its analog switchboards to digital.

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The Czech Republic, so far, has just 57 percent coverage through digital switchboards.

"To offer different price packages for our customers is not yet possible. We can only do this after we can deal with it technically and that won't be until next year," the general director of SPT Telecom, Svatoslav Novak told Mlada Fronta, a Czech newspaper.

One of the boycott organizers Petr Zandl, the head of ISP MobilServer, said it was technically possible for SPT Telecom to provide Internet users with a different package, but it lacked the will to carry it out.

"We are offering SPT alternatives that involve no special technical requirements," Zandl reportedly said, adding that boycott organizers have modeled their alternative on a deal struck between Spanish online users and the Spanish national telco operator after a similar Internet strike. Telefonica de Espana slashed Internet connection prices by 50 percent after an Internet boycott in Spain in September.

"We call it the 'Spanish Way' where, for a large tariff fee of say 300 crowns (US$10), off-peak and weekend local calls would come in at a flat rate," said Zandl. His group estimates that SPT Telecom could double the number of customers under such a scheme.

"Price is one of the reasons that ordinary people have not yet got onto the Internet," he added.

A source at SPT Telecom admitted to IDG News Service that it was in fact "possible, but difficult" for the monopoly to provide a different rate for Internet users.

"When they say it's technically impossible, it's half true in a way. With the analog system it is still possible to differentiate between certain calls. It can be done, just with a lot of difficulty, that's all," he said.

The Internet lobby in the Czech Republic estimates that the average of $50 a month spent by Internet users will increase to $180 a month under the new charges. With average wages at less than $350 a month, boycott organizers say the Internet is increasingly out of the reach of most people.

SPT Telecom is due to retain its monopoly until 2000, leaving only expensive leased lines which from Cesky Radiokomunicace cost 30,000 crowns ($1,000) a month as an alternative for Internet users.

There are an estimated 80,000 Internet users in the Czech Republic, accounting for 2 percent of SPT Telecom's turnover.

SPT Telecom is 27-percent owned by the TelSource consortium of Koninklijke KPN NV of the Netherlands and Swisscom AG, which paid $1.43 billion for the stake in 1995, giving them managerial control and a static market until the year 2001.

Peter Shadbolt writes for the IDG News Service.

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