PRAGUE, April 11 (Reuters) - Telefonica Czech Republic cut its mobile voice and data prices onThursday, spurring its main peers to announce similar steps in amarket often criticised for a lack of competition.
The step could hurt operators' margins but the share edgedup, recovering further from a nine-year low earlier this week.
Telefonica Czech Republic chief executive Luis Malvido saidthe firm would simplify its offering, introducing three basicvoice and data packages priced from 249 crowns to 749 crowns($12.58-$37.84) per month, and would stop subsidising handsets.
The top package includes unlimited call time and textmessages and 1GB of data.
Telefonica Czech Republic's shares rose 1.9 percent to279.20 crowns, outperforming other Prague stocks.
Ceska Sporitelna analyst Petr Bartek said the initial impactof the price cut on earnings before interest, tax, amortisationand depreciation could be in the high single digits, whileprices could be cut by 10 percent or more.
"The newly offered price package ... is close to prices inAustria which is seen as a highly competitive market," he said.
He said the price cut was seen as reaction to new proposedconditions for a planned auction of additional mobilefrequencies that could lead to the arrival of a new player.
The margin cut could make it more difficult for thepotential new entrant, expected to be investment group PPF, towin customers from incumbents Telefonica, T-Mobile and Vodafone.
Vodafone said it would introduce a similar package for under700 crowns in the coming weeks, while T-Mobile also said itwould announce a similar offer in the coming days.
Telefonica is 69.4 percent-owned by Spain's Telefonica,which is seeking ways to reduce debt. Brokers have said sellingpart of its Czech holding could be one of the options.
Vodafone (VOD)
