135/2009 Memorandum of understanding between TP and UKE – Orange Polska


23 October 2009

Pursuant to art. 56, clause 1, item 1 of the Law of July 29, 2005 on public offering and the conditions for introducing financial instruments to the organised trading system and on public companies (Journal of Laws of 2005, No. 184, item 1539), the Management Board of Telekomunikacja Polska S.A. (“TP S.A”, “TP”) hereby informs about memorandum of understanding (“MoU”) signed by TP and Polish Office of Electronic Communications (“UKE”).

On October 22nd 2009, TP and UKE signed a memorandum of understanding concerning implementation of transparency and non-discrimination in inter-operator relations. The MoU assumes stabilisation of wholesale rates by UKE till year 2012, while TP would invest in 1.2 million broadband accesses.

According to the memorandum, TP would implement technical and organisational solutions, instead of physical separation of information systems, in order to secure functioning of additional principles for providing non discriminative access to the information for alternative operators.

It is expected that in case TP fulfils the arrangements, the President of UKE will abandon intentions for functional separation of TP.

Stabilisation of conditions for operating the telecommunications business and for investing in the telecommunications market is another important element of the memorandum. President of UKE declared maintaining the wholesale rates at the level of currently binding reference offers till the end of 2012.

“Retail minus” methodology used currently for defining the wholesale rates will be replaced with “cost plus” approach. Based on that change TP will be in a position to invest over next three years in the development of 1.2 million broadband accesses, of which 0.5 million new lines and 0.7 million upgraded existing lines. It is expected that approximately 1 million lines will provide bandwidths of at least 6 Mbps. This infrastructure will be deployed across agglomerations, towns and villages.

The MoU also deals with legal cases and claims between TP, UKE and alternative operators. These will be gradually withdrawn, following implementation of particular adequate elements of the agreement.

Maciej Witucki, President of the Management Board of TP, said: "We are very pleased that after many weeks of joint efforts we have reached consensus expressed in this memorandum of understanding. It opens a new era for Polish telecommunications market. We have defined grounds for normalisation and stabilisation of the regulatory environment which is key for further rational development of this market and consequently for providing support to the information society in Poland. In many occasions I have declared willingness to invest into development of Poland and today I can claim that our company is now in a position to fulfil this promise.”