Business News

03-01-2014 | Chris Johnstone

In Business News: mobile phone charges fall; hot news as publisher launches gas sales; Amazon sticks with ambitious Czech warehouse targets; purchasers rush for Prague’s new flats; and a Czech coal baron closes another peace deal.

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Sharp drop in mobile phone charges

Photo: Barbora KmentováPhoto: Barbora Kmentová A mobile phone tariffs price war has helped cut the costs of voice and message services for Czechs by around a fifth last year according to the sector regulator.

The Czech Telecommunication Office said this week that operator Telefónica’s sharp cuts in charges for unlimited mobile services last spring sparked similar moves by its main rivals, T-Mobile and Vodafone. The result has been an average 19% drop in the costs of mobile services according to the latest price barometer issued by the office.

The price of mobile phone services have on average halved for Czechs over the past five years, the telecoms watchdog adds in its report. T he big three dominant mobile phone companies have been under fire for years for their high Czech charges compared with the situations on similar Central European countries and more developed West European markets, Comparisons taking account of Czechs' lower purchasing power put them in an ever worse light.

Lightning move on gas sales

Photo: archive of Radio PraguePhoto: archive of Radio Prague So-called virtual operators, who buy capacity from the big players and resell it on their own account, are another factor for lower phone costs. But their increasing impact is also being felt on other markets.

Local publishing giant Ringier Axel Springer already offers mobile phone services through the top selling Czech tabloid, Blesk. And the group has now announced that it will sell Czech households natural gas as well via newly created energy retailer Bleskplyn.

To some extent the Czech gas sales are a copy of the existing German model where mother company Axel Springer is already selling gas via its local mass selling tabloid, Bild.

But the Czech version is a bit more interesting given that the German publishing house is on the verge of selling up its Czech assets to none other than two of the main Czech shareholders in the country’s second biggest energy group, Energetický a Průmyslový Holding, which is also active in electricity and gas trading.

Amazon upbeat on ambitious Czech warehouse plans

Illustrative photo: CTKIllustrative photo: CTK Internet commerce giant Amazon said this week that it is sticking to its plans and is still on course to open two large Czech distribution centers this year.

Amazon, the world’s biggest e-commerce company, ran into obstacles almost as soon as it announced its plans last year for the centers on the outskirts of Prague and second city, Brno. The biggest has been local opposition to the proposed massive warehouse near Prague and planning changes and road links at both sites.

But Amazon’s local recruiters are pushing ahead with their search for around 2,000 workers at each site with the company saying the target is still to have the centers up and running by September this year, in time for the 2014 Christmas rush. For that to happen significant progress on the local planning paperwork will have to happen by the end of this month.

Cheap flats provide cheer for capital’s developers

Illustrative photo: Jiří NěmecIllustrative photo: Jiří Němec A rush to buy new flats at the end of 2013 has provided some cheer to the depressed Czech construction market, at least in the capital Prague. Just over 1,500 new flats were snapped up in the last quarter of the year in Prague, taking the capital’s final sales figure for the year to just over 5,000, according to preliminary figures released by one major local developer. The company, Ekospol, says that figure is a jump of almost 25% on the 2012 sales total and the best numbers for new flat purchases in Prague since 2008. Low interest rates, the proliferation of relatively low cost newly built flats, and increasing Czech enthusiasm for purchasing flats as a long term nest egg and investment are some of the reasons for the spurt in sales, according to the company.

Coal baron seeks peace deal

Photo: Filip JandourekPhoto: Filip Jandourek And finally, peace appears to have been declared in another major ongoing battle between Czech coal barons and energy companies.

This week Czech media announced that bosses of Czech Coal and Energetický a Průmyslový Holding (EPH) had reached an out of court settlement that would put an end to an eight year battle over coal deliveries to the multifaceted heat and power, energy trading, and mining group.

Animosity reached a peak in 2012 when Czech Coal cut coal supplies overnight to one of EPH’s biggest power and heat plants, forcing it to expensively ship from Germany. Czech Coal said the company had run up massive debts for previous coal deliveries.

The latest settlement follows on from the deal earlier in 2013 between Czech Coal and electricity producer ČEZ. But for eager followers of the Czech genre, there are still some disputes, such as that between ČEZ and coal mining company Sokolovská Uhelná, are still unsolved.

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