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 for the regulator’s 2010 annual report as well as operator data for the first quarter of 2011.
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 fell PLN1.7 billion in 2010 to PLN 5.5 billion and was expected to fall to about PLN5 billion in 2011, with the number of lines falling to 7.4 million from eight million in 2010.
In common with many of its neighbours, Poland has been affected by the recent global financial turmoil through declining demand for its exports, a slowdown of credit activity, and lower foreign direct investment inflows. This slowdown has been reflected in the overall telecoms market, which generated PLN 42.8 billion in 2010, a slight increase on 2009. Nevertheless, overall capex undertaken by telcos recovered quickly, increasing 2% in 2009, year-on-year, and by about 35% compared to 2005. Revenue was expected to show a slight increase to 2012, largely on the back of the mobile and broadband sectors which will 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 are some 21 mobile operators, including six MNOs and a sufficient number of MVNOs to provide effective competition in the low-cost sector. Competition together with regulatory measures has resulted in the average price of domestic mobile services falling steadily in recent years, including in 2010 a 25% fall in the cost for voice calls, and a 5% fall in SMS messaging charges. ARPU has also fallen due to lower retail tariffs and regulated MTRs and roaming charges.
Given the saturated voice market, MNOs have focused on launching tailored offerings for particular market segments, encouraging prepaid users to migrate to postpaid plans, and marketing mobile broadband services based on upgraded networks.
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 2011 and 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: in mid-2011 the incumbent had a 37% share of the broadband market by subscribers, while Netia had a 13% share and UPC Polska a 10% share.
The fragmented CATV market is ripe for further consolidation: at the end of 2010 Liberty Global, owners o UPC Polska, bought Aster City, the fourth largest cableco, while in early 2011 Vectra filed to take over part of the cable business of the third largest player Multimedia Polska. In mid-2011 Vectra acquired the analogue cable networks in Bydgoszcz and five nearby towns from Netia.
Key telecom parameters – 2010; 2012
|Fixed broadband subscribers (million)||5.86||6.56|
|Fixed broadband penetration rate||18%||22%|
|Mobile broadband subscribers (million)||3.5||9.3|
|Subscribers to telecoms services:|
|Fixed-line telephony (million)||8.3||7.0|
|Mobile phone (million)||46.9||49.3|
|Mobile SIM penetration (population)||123%||128%|
- ASO has been confirmed for mid-2013, though satellite and digital cable TV remain the most common form of receiving TV.
- 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.
- DVB-H mobile TV has not been successful thus far but there is much promise in steaming TV with a number of operators offering services.
- 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 120Mb/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.
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 2010;
- 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.
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