The Spanish concern Telefonica this week installed nine of its representatives on the 15-member supervisory board of Cesky Telecom, and replaced the CEO of the dominant Czech fixed-line operator and its mobile phone arm, Eurotel, with its own people. The Spanish telco paid $3.5 billion for the Czech state's controlling stake in Cesky Telecom in a deal that was finalised this June. Telefonica decided this week that it will not pay dividends on last year's profit at least until a mandatory buyout of Cesky Telecom minority shareholders is completed.
Speaking of mergers and acquisitions, a study by the international consultancy KPMG has shown they are on the rise in the Czech Republic. There were 38 major deals in the first half of 2005 totalling $1.6 billion, according to KMPG, roughly $1 billion more than over the same period the previous year. The largest deal was the purchase of the Czech commercial station TV Nova by the US company CME, for $679 million. The second largest was the Canadian company Telesystem International Wireless's purchase of the remaining shares in the Czech mobile operator Oskar that it did not already own, for $510 million.
Shares in CME, by the way, will begin trading on the main market of the Prague bourse on Monday, where big investors now trade eight blue chips in lots, including Cesky Telecom, the power utility CEZ, and Erste Bank. CME, or Central European Media Enterprises, as it is formally known, is one of three firms to have entered the Czech market since last June. The other two are the property developers Ocro, which listed last winter, and the drugs company Zentiva, the first-ever Czech company to enter the capital market through an initial public offering (IPO).
Banks, leasing companies and consumer-financing companies plan to create a single credit registry for monitoring consumer debt. The Czech Credit Bureau launched a registry this week for leasing and consumer-finance companies and wants to combine it with its existing registry for banks. The financial institutions hope to create the new entity within a year.
Prague is now the world's 28th most expensive city for expatriates in which to live, according to a survey by Mercer Human Resources Consulting, The survey takes New York City as its base. Prague is now at 90.8 percent of the New York level, making it slightly less expensive for ex-pats than Budapest and Warsaw, which ranked 25th and 27th. All three Central European capitals are now pricier--in relative terms, based on local income levels--than is Berlin. Worldwide, Tokyo was again the most expensive, with costs of 134.7 percent of those in New York.
Meanwhile, some two hundred Czech doctors are leaving for Western Europe every month in search of better pay, according the Czech Doctors Association, drawing on applications the association receives for a certificate needed to work abroad. Britain and Germany are among the most popular destinations, from where some doctors commute home to the Czech Republic at weekends.