RealTime IT News

ISPs Demand More Money From Czech Telecom

[Prague, CZECH REPUBLIC] Internet service providers in the Czech Republic publicly expressed their discontent with the level of commissions provided by local incumbent telecommunication operator Czech Telecom for generating phone traffic.

This so-called connection fee - basically, degree of sharing revenue between ISP and Czech Telecom - has been increased from the previous level of 20 to 30 percent to 20 to 45 percent, depending on the volume. These are still low numbers in comparison with Western Europe. For instance, British Telecom shares 60 to 70 percent of revenues generated with local ISPs.

Sharing revenues is especially important for those ISPs who provide connection to the Internet for free. Connection fees from the telecommunication operator is the only source of direct income for them. There are 3 "free" ISPs in the Czech Republic: Czech On Line (owned by Telekom Austria), Contactel (partly owned by Tele Danmark) and World Online. These three ISPs, in addition with other Czech ISPs joined the consortium NIX.CZ and publicly accused Czech Telecom of delaying the development of the Internet in the Czech Republic. They not only found the increase of the connection fees inadequate but also criticized tariffs for end users, still too high from their point of view.

"The Internet Service Providers of the Czech Republic are disappointed by the continuing minimal efforts of Czech Telecom to make Internet access affordable and available for the broadest number of consumers," said the joint statement of ISPs. According to the OECD report "Local Access Pricing and E-commerce", Czech prices for Internet usage including telephone tariffs and VAT in terms of purchasing power parity are the second highest among 29 countries included in the survey. For 20 hours of peak time Internet access, Czechs have to pay US $109.93 in PPP adjusted terms. Hungary is the only country with even higher prices.

It is generally expected that the situation will improve immediately after the liberalization of telecommunication market beginning January 1, 2001. Czech Telecom, however, will retain several important privileges.