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Two bid for TPSA stake
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March 31, 2000: 5:31 a.m. ET
France Telecom, Telecom Italia compete in delayed Polish share sale
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LONDON (CNNfn) - The Polish government announced Friday that France Telecom and Telecom Italia have submitted bids in the rescheduled sale of state-controlled telecom operator TPSA.
The government delayed the offering of between 25 and 35 percent of the company in December when France Telecom was left as the only bidder, following the withdrawal of SBC Communications (SBC).
British Telecommunications (BT-A) and Deutsche Telekom (FDTE) had also been reported to be considering bids. The government now hopes to conclude the auction by June.
TPSA shares were fixed at 37.8 zlotys in Warsaw Friday, valuing a 35 percent stake at 18.5 billion zlotys ($4.47 billion). However, analysts said the government is expected to drop the price considerably to secure a strong overseas partner to hasten the restructuring of TPSA, which was partially privatized in 1998.
TPSA has 9 million customers, a monopoly on international calls from Poland and a strong mobile-phone operation. It faces stiff competition in the latter market from privately held Elektrim, in which France's Vivendi (PEX) took a 40 percent stake last June.
While TPSA is viewed as a premium asset because of rapid growth in the Polish market, increasing competition and the firm's heavy investment needs have tempered international phone companies' interest and led many to question the government's fund-raising target.
Analysts said the company also suffers from chronic over-staffing, with a workforce of 70,000. France Telecom's plan to cut the payroll aggressively is believed to have played a part in the government's decision to scrap the first auction. 
-- from staff and wire reports
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