2009 Poland - Telecoms, Mobile, Broadband and Forecasts

One of the larger Eastern European nations, Poland is defined by as an upper middle-income country by the World Bank. Since its transition to a market economy Poland has experienced sustained economic growth, assisted by its accession to the European Union which is now its main trading partner. Like many of its neighbours, Poland was affected by the recent global financial turmoil through declining demand for its exports, a slowdown of credit activity, and lower foreign direct investment (FDI) inflows. However the country is expected to fare well given its relative strength in terms of unemployment, inflation, current account, external debt as well as relatively sound and well-capitalised financial system. The IMF expects Poland’s GDP to contract slightly during 2009 before recovering in 2010.

Poland’s telecoms market underwent reform to align telecommunications policy with that of the EU. Competition has been introduced but incumbent operator Telekomunikacja Polska SA (TPSA) retains a major share of the overall telecoms market. Ongoing action by an active regulator has improved market conditions, particularly in the network access sector.

Despite relatively low penetration, Poland’s fixed broadband market is one of the largest in Eastern Europe. Broadband represents the majority of Internet connections; ADSL is the most popular fixed broadband access platform followed by cable due to Poland’s well-established cable TV operators. Fixed broadband access is also available via FTTx and wireless. An emerging Internet society is taking shape, encompassing commerce, health and government services.

Poland’s broadcasting market is transforming under the weight of competition and technological convergence; Broadcasting network operators and telecom service providers have launched competing triple play offerings. Digital TV is widely available via cable, satellite, broadband TV (IPTV) and terrestrial TV; with a number of new market entrants leading to increased competition.

Poland possesses a well developed mobile market with high mobile ownership levels although penetration levels suggest multiple SIM card ownership. Four mobile network operators offer services along with a number of mobile virtual network operators. Average Revenue per User levels have stabilised after falling in recent years due to retail tariff competition and the take up of mobile services by lower spending consumer segments of the market. Also placing pressure on ARPU levels are regulatory-enforced cuts in mobile termination rates for all three SMP mobile network operators. All four mobile network operators offer 3G services, with mobile broadband and content the new growth market given low penetration of existing mobile data services.

Key highlights:

·         The incumbent continues to struggle in the face of competition, characterised by stagnant growth in both top line revenue and bottom line profit. Resistance to developing the wholesale market led the regulator to commence functional separation proceedings in early 2009.

·         Broadband represents the majority of Internet connections. The incumbent dominates the broadband market through its ADSL offering. Competition in the ADSL market based on wholesale offerings is poor, characterised by almost non-existent take up of unbundled local loops and shared access lines.

·         More success is visible in the bitstream access market due to the regulator’s imposition of a retail-minus price methodology, guaranteeing a certain level of profit margin for alternative operators relative to the incumbent’s retail ADSL offering.

·         Infrastructure based competition is strongest from Poland’s well-established cable TV operators, which have upped the ante by launching DOCSIS 3.0-based broadband offerings with speeds of up to 120Mb/s. A number of FTTx networks have been deployed although take up to date has been minor.

·         Digital TV is widely available via cable, satellite, IPTV and DTTV, with healthy competition in the cable and satellite markets. Cable operators offer triple play services and a once cosy duopoly in the satellite pay TV market has been shaken up with five operators now in operation, leading to the rollout of new products and services. DTTV broadcasts officially commenced in September 2009 on the first multiplex, with a total of three to be deployed.

·         Poland’s mobile market is served by three well established mobile network operators and a relatively new market entrant. A number of MVNOs have also entered the market; despite their numbers their impact on the overall market in terms of revenue and subscribers is minimal. The regulator has worked to improve competitiveness in the mobile market by setting asymmetric mobile termination rates favouring the new market entrant.

Poland key performance indicators – 2008 - 2009

(Source: BuddeComm based on industry data)

Data in this report is the latest available at the time of preparation and may not be for the current year.