O2 Czech Republic has announced it will spin off its fixed and mobile networks into a separate entity.

In a brief regulatory announcement on Tuesday, the operator said it has completed a feasibility study regarding the matter and has subsequently "decided on preparation of formal steps leading to such separation."

Reports that O2 Czech was considering a functional separation emerged in August. At the time, it was understood that the company aimed to ease regulatory oversight; the incumbent operator dominates the Czech Republic's fixed-line market. At the end of September, O2 Czech had 1.3 million fixed customers and 5.1 million mobile customers.

On Tuesday, O2 Czech did not provide a reason for the spinoff, nor a timeframe for completing it.

The announcement was made the same day that O2 Czech's board of directors elected Tomáš Budník as chairman, replacing Luis Malvido, whose tenure came to an end on 31 December. Tomáš Kouril will serve as vice chairman.

The move also comes less than a month after O2 Czech's board approved a 24.8 billion koruna (€891.4 million) loan to majority shareholder PPF. In order to fund the loan, the company took out a CZK31.8 billion loan of its own.