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Czech IP Telephony Battle Continues

Czech phone network monopoly operator SPT Telecom Wednesday appealed the Czech Telecommunication Office (CTO) decision to allow the return of banned IP telephony service Paegas Internet Call.

The CTO, an integral part of the regulatory system of telecommunications in the Czech Republic, May 6 decided that Paegas Internet Call was indeed legal and could again be offered to customers. The CTO originally banned the service in February.

SPT objects to the RadioMobil Internet telephony service on the basis of its discounted cellular phone fees for international calls, which it says violates its legally protected monopoly.

Czech GSM operator RadioMobil launched Paegas Internet Call last October. The service offers cheap international phone calls to mobile phone users by connecting customers via Internet, not by means of classical telcos. International calls from the Czech Republic to the U.S., for example, costs about 60 percent of the standard SPT service price.

SPT Telecom complains that the price difference violates its long-distance monopoly, which is guaranteed until January 1, 2001, two years longer than state-guaranteed telco monopolies in the European Union.

CTO declared Paegas Internet Call unlawful on the basis of SPT's complaint and RadioMobil was forced to cut off the service. CTO changed its mind May 6 and will again permit Paegas Internet Call. However, because of the appeal filed by SPT Telecom, the service cannot be renewed until a final decision is announced.

Antonin Peltram, Czech Minister of Transport and Telecommunication, is entitled three months' deliberations before giving his ruling.

Meanwhile, SPT Telecom recently acknowledged that it has finished its own IP telephony project to offer to customers. SPT has a 51 percent stake in rival GSM operator EuroTel, which is also preparing a similar service.

"Both the CTO and Minister Peltram were misused by SPT Telecom for sake of its competition battle," said Patrick Zandl, analyst for RadioMobil.



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