The ÚOHS has fined ČT seven times, more than any other company. This time, the regulator found that ČT tried to eliminate competition by closely bundling free phone minutes with its normal service packages.

This prevented ČT clients from considering switching operators, according to the ÚOHS, because it was nearly impossible for customers to accurately compare ČT's prices with those of alternative providers.

It was so difficult to differentiate between free and paid minutes that customers were virtually forced "to ignore alternative telecommunications providers," said ÚOHS Chairman Martin Pecina.

The Czech Telecommunications Office (ČTÚ) ordered ČT in June to stop offering free minutes with its service programs.

Though the fine represents little more than a slap on the wrist for ČT, which brought in 62 billion Kč in revenue last year, the company will appeal the decision. Company officials have denied any wrongdoing.

"We have always followed rules set by the market regulator," said Vlastimil Sršeň, the company's spokesman. "That's why the court should consider the validity of the ÚOHS' ruling."

The regulator's decision is only one of ČT's legal problems. The company is facing a multibillion-crown lawsuit from Tele 2, another alternative provider.

Tele 2 filed a 2.14 billion Kč lawsuit against ČT in January, alleging that the company's pricing policies have cut into its business, said company spokeswoman Alexandra Gjurič.

Other alternative providers have also complained that ČT has used its power to prevent them from growing on the market and want the government to take action.

Naveed Gill, general manager of Tiscali Czech Republic, and other top managers from the Association of Fair Competition, which comprises Tiscali, e-Tel, Tele 2 and Telenor Networks, have called for further sanctions against ČT. They have alleged that ČT offers customers retail prices below the wholesale prices it charges alternative providers for using its network.

Alternative providers must rent fixed lines from ČT because it owns the country's fixed-line network.

The formerly state-owned company was privatized in April, bought by Spanish telecom giant Telefónica.

The most recent sanction shouldn't pose a threat to the company's financial results. ČT created a reserve fund to pay fines shortly after the ÚOHS began investigating its pricing programs last spring.