PRAGUE -- The Czech Economics Ministry will present its telecommunications policy paper to the government next week, paving the way for the privatization of state telecommunications monopoly SPT Telecom, whose shares are expected to be keenly sought.


"We will be delivering the paper to the government for discussion on August 10," Vladimir Sedlacek, the ministry's telecom section head, said Wednesday.


Sedlacek said that under the first phase of the privatization plan the government would retain some 70 percent of SPT, with a 26 percent slice offered to Czech citizens through the vouchers-for-shares privatization scheme.


After the voucher phase, the government plan calls for a so-called "strategic" foreign investor to increase SPT's basic capital by 37 percent.


The government stake would then be cut to 51 percent, giving the foreign investor a 27 percent stake, with investors from the voucher program holding the remaining shares.


Estimates of the value of the foreign investor's stake have ranged from $650 million to as high as $1 billion.


Analysts believe many of the world's largest telephone companies, including Deutsche Telekom, France Telecom, Alcatel and several American firms are interested in the foreign stake.


U.S. bank J.P. Morgan is organizing the process to determine which companies will be asked to take part in the tender.


"After we present the paper, we hope that maybe the tender process can start in the autumn," Sedlacek said.


The ministry's proposal, however, may not coincide with National Property Fund chairman Roman Ceska's vision for the privatization of SPT Telecom.


Ceska, whose agency is charged with selling off state-owned property, said in an interview in June it would not be clear for at least another year whether foreigners would be allowed to hold a stake in the telephone monopoly once it had been privatized.


Ceska said SPT's full privatization would take place in the long term, when utilities were better regulated.