Poland's State Railways (PKP) plans to find a strategic partner for its telecoms business, which is to be carved out of the firm later this year as part of an overhaul, a PKP official said on Wednesday.

PKP wants to create a wholly-owned telecom subsidiary, Teleinformatyka, in July and sell a strategic stake in the firm next year to a foreign or domestic investor, said Marek Misko, head of PKP's telecommunications department. PKP is heavily indebted and its equipment obsolete, but its telecom assets are modern and may prove highly valuable when grouped in a firm with a growth strategy, analysts said. Teleinformatyka would own PKP's 5,000 km (3,125 mile) fiber-optic network, which is bein extended, as well as exchanges, data transmission facilities and other equipment. A consortium of PKP and Britain's National Grid has already won one of three licenses to offer long-distance services in competition to dominant operator TPSA, although the permit has not yet actually been handed over.