Efforts to liberalise the telecommunications market in the Czech Republic and Slovakia were a separate chapter of the opposition treaty period. At the very time when the technological sphere of communication companies was experiencing rapid growth, the leadership of both countries decided on an inevitable step – the liberalisation of telecommunications monopolies in the emerging market economies.
Liberalisation made sense: it promised to improve customer service, it represented revenue for the state budget and it was required by the European environment into which the two socialist countries were until recently entering.
The privatisation of telecommunications companies in the region was an interesting attraction for large foreign players. Despite the limited size of the market, these were relatively cheap assets with the prospect of high profitability. Users had nothing to compare with, so they did not have high demands for quality of service or low prices. The regulatory environment was incompetent, opaque and the telecommunications companies were able to shape its content and competency framework.
The biggest battle in the Czech Republic arose in the privatisation of Czech Telecom. It was precisely because of interests and pressures from various parties that the privatisation project repeatedly failed, despite the fact that the government even resorted to the rather unusual step of involving a third party as an external advisor and arbitrator – J.P. Morgan.
The company was surrounded by “A” names such as Deutsche Bank, TelSource, Tele Denmark, STET, TelFar, PTT Netherlands, Swiss PTT Telecom, AT&T and KPN. The constant and numerous changes of personnel in the management and supervisory bodies of the company are also evidence of the turbulent clashes of interests. It was not until the summer of 2002 that the government successfully completed the sale of its 51% stake in Czech Telecom. This happened practically 8 years after the privatisation process was launched.
