According do research and consulting company PMR the value of the Polish telecommunications services market will exceed PLN 40bn. The dominating trends lead to the sector more closely resembling the mature markets of Western Europe.
The telecommunications services market in Poland has entered the maturity phase. The increases in value noted in the previous three years were only minimal, 2-5% annually. Despite a forecast increased dynamic in 2008 compared with 2007, a reverse of this trend and even higher growth should not be expected in the next years. The segment still having the most negative impact upon the sector value is fixed-line telephony. Additionally, development of the mobile telephony and internet markets, in the face of pressure upon decreases in service prices, is not able to efficiently drive growth of the entire market.
According to PMR estimates included in the report “The telecommunications market in Poland 2008. Development forecasts for 2008-2012”, the value of the telecommunications services market in Poland, measured in local currency, grew by more than 2% y-o-y, reaching PLN 38.6bn. This implies less than half the dynamic of 2006. Similarly to previous years, the growth in market value was possible primarily thanks to the continuously increasing revenues of mobile operators. Although in mobile telephony segment, due to increased competition and primarily, decreases in mobile termination rates (MTR), the growth was the lowest in history.
The second segment regarding value is still fixed-line telephony, however its share in the market of telecommunications services is systematically declining – from 58% in 2000 to 27% in 2007. For another year in a row, this segment noted an almost 10% decrease in value, primarily due to fixed-to-mobile substitution. Moreover, nothing demonstrates the possibility to reverse this trend in the next 2-3 years.
The smallest, and at the same time the most dynamically developing segment of the Polish telecommunications market remain data transmission, line rental, and internet services provision (DLISP). In 2007, the DLISP market generate approximately PLN 4.7bn of revenues, the major part of these represented by inflows in the sector of internet access services.
Regarding dominating trends the Polish telecommunications market is gradually approaching Western European markets. Service saturation is becoming more noticeable (in the case of internet, this refers primarily to regions bringing the most rapid return on investment and the highest margins, i.e. urban agglomerations). Consequently, increases in market value depend to a lower extent on winning new customers. Therefore, telecommunications operators are focusing more on retaining their current base of users. Offering larger volumes (such as free minutes) or better service quality (such as higher bandwidth) at the same price has become a trend. At the same time, operators are systematically extending their range of services in order to offer packages consisting of telecommunications, multimedia and other services, not necessarily related to the telecommunications industry (for example banking services). On the other hand, price competition is losing importance, primarily due to its contribution to decrease in average revenues per user.
In August 2008, PMR conducted a survey amongst the 100 largest telecommunications companies in Poland. For the seventh time, the telecoms managers provided their opinions about the market situation and trends. The forecasts of the industry representatives regarding the market development remain optimistic. More than 80% of those surveyed believe that the value of the Polish telecommunications market will increase in 2009. Only 3% expect a negative growth dynamic. Nevertheless, compared with the previous edition of the survey, the enthusiasm of companies weakened regarding the forecast growth dynamics.
According to representatives of the 100 largest telecommunications companies in Poland, at present poorly developed infrastructure has the largest negative impact upon the development of the telecommunications sector. This is the opinion of 45% respondents. With a similar frequency, respondents indicated barriers of poor legal regulations existing on the Polish market and the dominant position of TP SA – this was stated by, respectively, 44% and 42% of those surveyed. It is worth mentioning that the significance of the poor infrastructure factor grew considerably compared with the previous year. In 2007, this was indicated as the most important barrier by 23% respondents, thus we see an increase of 22 percentage points. On the other hand, a 10 percentage points decrease was noted in case of people listing high prices of telecommunications services as a barrier, and a 6 percentage points fewer respondents indicated problems with competitiveness on the market.
Polish telecommunications services market will develop at an average annual rate of approximately 2.5% in the next four years. The action of the regulator (for example planned more restrictive decrease in mobile termination rates and attempts to separate TP SA) will be of crucial importance for the market development. “In case of larger than expected drops of revenues on wholesale markets and a possible slowdown of the entire economy growth rate, a temporary stagnation or even a decline in the total value of the telecommunications services market in Poland is even more probable than one year ago” – summarised Pawel Olszynka, PMR analyst and one of the report’s authors.
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