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Stagnation in Telecoms Revenues in Poland
According to the information released by PMR, in 2006 the value of the Polish telecommunications market expanded to PLN 38.2 billion (US$14.9 billion). Totaling approximately 4%, the 2006 rate of growth was similar to that recorded a year earlier. The market is about to brace itself for a struggle to defend its value in the coming years.
In 2006, the Polish telecommunications market maintained the rate of growth recorded in 2005, which was possible mainly thanks to the still-growing mobile telephony market and a steady improvement in the significance of internet access services. The industry's revenues have been adversely impacted in the past two years above all by the continued erosion of the fixed-line telephony market, which declined in double-digits in terms of value.
The mobile sector has been the largest segment of the Polish telecommunications market in the past three years. Despite the fact that its revenue growth shrank to approx. 10% in the past two years, mobile operators still report the highest margins recorded within the telecoms industry. The overall profitability of the Polish telecommunications sector is therefore mostly dependent on the high profits generated by the mobile telephony.
The share of mobile revenue as a percentage of the total value of the telecommunications market has been steadily rising; while it was 36% in 2000, this year it amounted to roughly 60%. A similar but opposite trend is seen in the fixed-line market. The data transmission, line rental and ISP (DLISP) market was the fastest growing segment of the telecommunications market in Poland in 2006 again. The accumulated revenues from DLISP services amounted to PLN 4.3 billion (US$1.7 billion), representing approx. 9% of the telecommunications market's total value. The majority of DLISP revenue comes from the provision of ISP services to individual customers.
More and more trends and tendencies in the Polish telecommunications market indicate that the industry undergoes transition from the stage of rapid growth to the maturity phase. Operators' revenues do not increase and if they do, the growth rate is lower than only a few years ago. Market participants are more focused on customer retention and ensuring the right quality of services, as a result of which the trend of offering more for the same price becomes more pronounced. Concurrently, convergence and interdependence of the market segments proceeds.
For the purpose of the report, PMR conducted a survey of Polish telecommunications businesses. It was the sixth opinion survey of the management personnel in the 100 largest telecommunications companies in Poland. According to the survey, forecasts for the coming years are quite optimistic as the majority of them (79%) believe that the Polish telecommunications market will increase in value in 2008.
Growth of approx. 2% a year is the most likely scenario for the Polish telecommunications market in the coming two-three years. "However, if the wholesale market rates and interconnect charges suffer substantial declines, complete stagnation cannot be ruled out altogether; it is possible that we might see even a slump in the telecommunications market's value", Pawel Olszynka, a PMR analyst and one of the authors of the report, says.
Other interesting data in the report
According to the representatives of the largest telecoms in Poland, a single factor which will have the strongest positive impact on the development of the Polish telecommunications market over the next two years will be the entrance of new market participants. This reply was quoted by 37% of the interviewed. The following three positions - each with a similar number of votes - included new technologies and services, wider access to the networks of TP SA and mobile operators and the quality of legal regulations. The above opinions are shared by a quarter of all companies interviewed. Other factors, which in the respondents' view may positively affect the development of the telecommunications market in Poland over the next two years, include improvement of infrastructure and enactment of new legal acts to regulate the market, decline in prices of services, and a generally good condition of the Polish economy. The remaining factors did not add up to more than 10% of the respondents.
The number of broadband subscribers in Poland increases, so grows penetration, which is defined as a relation of the total number of broadband lines (both corporate and residential) to the population size. Over the past 12 months, the ratio expanded by over 30%. At the end of H1 2007, the penetration rate was 11.6% while a year ago it was 8.9%.
Posted to the site on 24th October 2007