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Telefonica Czech Oibda Falls Before Sale on Lower Spending

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Nov. 5 (Bloomberg) -- Telefonica Czech Republic AS, the country’s largest phone company and takeover target of the richest Czech, said third-quarter operating income before depreciation and amortization fell on overhaul costs and regulatory and competitive pressures on revenue.

Oibda for the three months ended Sept. 30 dropped 7 percent to 4.89 billion koruna ($255 million) from 5.28 billion koruna a year earlier, the Prague-based company said in a statement on its website today. Revenue declined 7 percent to 11.7 billion koruna, eroded by mobile termination rates and price pressures.

Billionaire Petr Kellner’s PPF Group NV agreed to buy a 65.9 stake in Telefonica Czech for 2.5 billion euros ($3.4 billion), PPF said in a statement today. The acquisition returns the phone company to local ownership after eight years.

Telefonica fell 8.6 koruna, or 2.8 percent, to 303.4 koruna in Prague.

Telefonica Czech reiterated 2013 guidance of limited Oibda margin erosion of 41.4 percent in 2012 and 2013 capital expenditure of less than 6 billion koruna.

Telefonica Czech reduced fees and introduced bundles for unlimited calls and some data in April after the regulator proposed new terms for a radio spectrum auction. The authority expects to start the bidding for the spectrum on Nov. 11.

Telefonica confirmed today that it will take part in the auction, Chief Executive Officer Luis Malvido said in a conference call with analysts today.

Telefonica booked 354 million in costs linked to business overhaul in the first nine months of 2013, it said today.

To contact the reporter on this story: Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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