2011 Poland - Telecoms, IP Networks, Digital Media and Forecasts

Mobile TV secures interest from broadcaster Cyfrowy Polsat

BuddeComm’s quarterly publication, Poland - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Eastern Europe’s largest and most competitive markets. It includes data from the regulator’s 2010 annual report, operator data to the end of 2011 and market developments into 2012.

As one of the ten countries which joined the European Union (EU) in mid-2004, Poland was obliged to reform its telecoms market and align its policies with those of the EU. Competition was introduced but the incumbent operator Telekomunikacja Polska (TP) has retained a major share of the overall market, and dominates most sectors. The fixed-line market has contracted due to competition and the trend of fixed-mobile substitution: market revenue has fallen for the last few years in line with the decline in the number of lines.

In common with many of its neighbours, Poland has been affected by the recent global financial turmoil. This slowdown has been reflected in the overall telecoms market, which has shown only a slight increase since 2009. This trend is likely to continue to 2013, largely on the back of the mobile and broadband sectors which will in part compensate for falling fixed-line voice telephony revenue.

The country has a well developed mobile market with high mobile penetration partly attributed to multiple SIM card ownership. There is effective competition from the MNOs and a significant number of MVNOs. A key recent development has been the network sharing deal between T-Mobile and Orange: their joint venture, ‘NetWorkS!’, will allow for faster infrastructure development and is expected to deliver to both companies substantial cost savings over the next five years. The move follows similar sharing agreements by the two companies in Austria and elsewhere in Europe, and in part results from their flagship enterprise Everything Everywhere in the UK.

Poland’s broadband market has developed rapidly in recent years as a result of falling tariffs and large scale take up of services. Growth in largely the result of the phenomenal increase in the number of mobile broadband subscribers, which now makes up the majority of accesses. Overall growth is expected to be steady in 2012, with the majority of subscribers being on mobile broadband plans. The FttX sector will also show significant growth in a number of cities, which should reduce the number of DSL customers as these are migrated to fibre networks.

DSL remains the most commonly available fixed-line platform. The incumbent’s market share has steadily fallen as the improving regulatory environment in relation to network access has given competitors alternatives through bitstream access and LLU.

Cablecos are continuing to invest in technology upgrades in a bid to retain customers in the face of competition from the fibre sector: by early 2012 UPC Polska had extended its 150Mb/s service to over 1.6 million households following upgrades in Lublin, Kraków, Katowice, Gdansk and Warsaw.

Another significant development for telcos in recent years has been the theft of equipment and cables. In late 2011 the regulator proposed that joint initiatives should be undertaken to tackle the problem, including legislation targeted at thieves as well, improved cooperation with local police forces and amended regulation dealing with the trade in copper and scrap metal.

Key telecom parameters – 2010; 2012

(Source: BuddeComm)

Market Highlights

• ASO has been confirmed for mid-2013, though satellite and digital cable TV remain the most common form of receiving TV.
• The regulator’s recent agreement with Ukraine concerning the use of frequencies in the 790-862MHz band in border areas will help the development of 4G services in Poland for mobile services. The agreement follows similar ones already undertaken with Russia and Belarus.
• The National Broadcasting Council has awarded licences for the final four channels on the first multiplex. All four broadcasters are new entrants to the market, and have established that they would not require investors or funding after receiving their licenses. The move is a major step in the progression to ASO.
• LTE, kick-started in late 2010, can potentially be developed in a number of bands licensed thus far. CenterNet and Mobyland have migrated base stations to LTE using the 1800MHz band, and aim to provide 60% geographic and 75% population coverage. Refarmed existing G spectrum can avoid the costs associated with new spectrum acquisitions, and so cost effectively extend mobile broadband to rural areas in coming years. Polkomtel commercially launched LTE at the end of 2011, providing 22% population coverage in 16 cities.
• FttX deployments remain low key though the government’s broadband policy has provisioned for network infrastructure access to promote fibre deployments.
• UPC and other cablecos have upgraded their networks to the DOCSIS 3.0 standard, providing up to 150Mb/s. Multimedia Polska, Aster City and Vectra also offer DOCSIS 3.0-based services. The higher data rate should help forestall customer churn to FttX networks as they are built out in coming years.
• Further market consolidation is expected in the cable TV sector as the major operators buy out regional players, and so realise greater scale to help upgrade networks and so fend of churn to fibre networks in coming years.
• The mobile TV licensee Info TV-FM was bought by the broadcaster Cyfrowy Polsat in late 2011. Cyfrowy Polsat has since partnered with Polkomtel to launch a mobile TV service in the first quarter of 2012; it also signed a cooperation agreement with Irdeto for the latter to provide conditional access and technical support while Cyfrowy Polsat will develop the market for devices for mobile TV reception.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Poland. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards in 2012;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

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