Business News
Stock Market Expected to Gain in 2001
Czech stock brokers expect a profitable year in 2001. A survey among Czech brokerage companies conducted by the CTK news agency has revealed that experts estimate that the stock market could gain as much as 10 to 20 percent. A significant impulse will be the planned privatisation of state-controlled companies. Petr Sedlar works as an analyst for the BBG Finance company:
Cellular Networks Prove Rock Steady
Mobile phones were perhaps the most popular Christmas present in the Czech Republic this year. According to estimates, there were 4.4 million mobile phone users among the Czech Republic's 10 million citizens just after Christmas. All three Czech mobile operators had expected a steep rise in the number of clients, and reinforced their networks to handle increased traffic around the end of the year. This move paid off - none of the networks experienced any significant problems, even though the 4 million Czech mobile phone users exchanged an incredible 43 million text messages on Christmas Eve and New Year's Eve combined.
Ceska Sporitelna Card System Erroneous During Christmas
While mobile phone operators proved the stability of their networks, the Christmas spending spree brought many a wrinkle to brows of managers of one of the biggest Czech Banks, Ceska Sporitelna, whose ATM and pay card system collapsed several times due to an immense number of transaction requests. Ceska Sporitelna operates around 60 percent of all ATMs in the Czech Republic and, according to experts, these breakdowns only highlighted the necessity for Sporitelna to upgrade or completely replace its card system. I asked Klara Gajduskova, spokeswoman for Ceska Sporitelna, what the bank was doing in order to prevent such failures in the future.
For a long period of time, Ceska Sporitelna's ATM system was not interconnected with the systems used by other banks. This changed some time ago and although they are technologically different, the systems are now compatible.
Prime Minister: More Investment for Growth
After three years of stagnation, the Czech economy began to grow in the year 2000. Czech Prime Minister Milos Zeman is convinced that further growth in the year 2001 must be based on investment, and not on consumption. These investments should be directed primarily at housing construction for young families and the transport sector.
Liberal Telecom Market? Pipe Dreams
On January 1, 2001, the dominant telecommunications operator in the Czech Republic, Czech Telecom, lost its monopoly in the fixed-line sector which it had been granted by law. However, new operators are unable to provide their services because they failed to reach an agreement with Czech Telecom on conditions of interconnection. The major alternative operators claim that the prices for interconnection offered by Czech Telecom are discriminatory and unacceptable. Now, it is up to the regulator, the Czech Telecommunications Office, to mediate in the dispute.
State Budget Deficit Higher than Planned
The Czech state budget showed a wider gap at the end of the year than expected. The state budget deficit doubled in December to 38 billion Czech Crowns, 3 billion more than the target figure. However, Finance Ministry Spokesman Libor Vacek pointed out that the final figure may be even higher.
The ministry of finance will be able to provide the final figure in the second half of January, after all budgetary transactions are completed. The ministry estimates that the state budget deficit for the year 2000 may eventually reach as much as 48 billion Czech Crowns, compared to the 35 billion approved by parliament.
BMW May Invest in CR
The Czech Republic is one of four countries where German car maker BMW is considering investing approximately 500 million euros. The company is expected to make the final decision by the middle of this year. BMW already buys car components worth half a billion Deutsch marks a year that are manufactured in the Czech Republic. The Czech Republic is ready provide massive investment incentives to win the investment. However, as the Deputy Minister of Industry and Trade, Vaclav Petricek, noted, the plan may face opposition from the EU, which considers the automotive industry to be a sensitive sector.
Czech Anti-Monopoly Authority Fines UPC for Dumping
The Czech Anti-Monopoly Office has imposed a fine of more than two hundred thousand USD on cable television provider Dattelkabel, a newly acquired daughter company of Dutch-based United Pan-European Communications (or UPC) for setting dumping prices. The ruling was a surprise move, as it came after a probe as to whether UPC abused its dominant position on the market by making sharp price increases of nearly 300 percent for some users. The office said in its ruling that that Dattelkabel offered its programs at prices below the overall average cost between 1998 to 2000, in order to control the market. The decision means that UPC's subsidiary must pay the fine for Dattelkabel, although it only took over the company in July 2000. The acquisition gave UPC, which also controls Czech cable providers Kabel Plus and Kabel Net, more than 400,000 customers, and just under 50 percent of the Czech cable market. The company said it would appeal the decision.
Year 2000 Extremely Profitable for Travel Agencies
The business daily HOSPODARSKE NOVINY has reported that last year was the best in ten years for the Czech Republic's tourist trade. The paper ascribes record-high sales to an improved economical situation in the United States and throughout Western Europe, and a stabilised economic environment in the Czech Republic. Experts also note that Czech catering and accommodation facilities are now comparable to economically advanced countries. The Czech Statistical Office was quoted as saying that the number of overnight stays in Czech hotels in the year 2000 rose by over 18 percent compared to 1999. And the paper says that almost 90 million foreign tourists visited the country from January to October 2000.
