Poland Telecommunications Report 2008

Alongside other markets in the CEE region, such as Hungary, the Czech Republic and Slovakia, it is becoming increasingly difficult to describe Poland's telecommunications market as developing. Instead, it is a mature market characterised by a regulator keen to promote inward investment and competition, and a number of service providers looking to establish Poland as a technology hub in the CEE region.

Poland's telecoms market has a favourable business environment that encourages investors such as Google, which opened an operations centre in Wroclaw, citing the availability of highly-skilled workers, economic stability and a strong infrastructure as key reasons behind its decision. Stability is also key and Poland, both politically and economically can claim to offer a stable business environment. Indeed, the election victory last year of the new PO-led coalition should represent a positive signal to investors, as a result of its commitment to privatisation and adoption of the euro by 2013 or even earlier.

Poland's telecoms regulator, UKE is also serious about its promotion of a competitive market that supports alternative technologies and inward investment. Its decision to fine incumbent operator TPSA a record US$30mn for anti-competitive practices in the high-growth internet market was a clear illustration of its support for a level playing field for Poland's growing number of alternative operators.

Poland's mobile market remains ultra-competitive with four national operators, another likely to launch commercial services and an army of MVNOs. In addition, the regulator may auction off radio frequencies released by the Polish military to one or two mobile operators. Mobile growth is in slowdown mode - this is no surprise given that the number of mobile subscribers at the end of 2007 was in excess of 40mn with penetration at 107%. Intense competition between Poland's three leading operators - Orange, Polkomtel and PTC - has no doubt fuelled this growth, as has the entrance of P4 earlier this year. Our five-year forecasts suggest an average annual growth rate of 3% until 2012 giving a total of 47mn mobile subscribers by the end of 2012.

Fixed voice telephony, in contrast, continues to stagnate and BMI's five-year forecasts suggest that the number of fixed-line subscribers will fall to 10.65mn by the end of 2012, representing 28% penetration.

Broadband growth, helped by Poland's increasingly deregulated market, remains rapid with our estimates suggesting that the number of high-speed internet customers rose by 33% in 2007 to 3.2mn. Migration to broadband access, intensifying competition in the market, the rising number of cable operators and the emergence of WiMAX will all contribute to a sustained growth in broadband take-up. BMI's forecasts suggest that by the end of 2012 there should be 5.35mn broadband subscribers, accounting for an average annual growth rate of 13%.