Poland is one of the largest telecoms markets in CEE, with vibrant competition across all market segments. This has benefited consumers through service innovation and lower prices, but operators' aggressive marketing strategies have increased the downward pressure on ARPUs, which continue to trend downwards and result in narrowing margins. In light of this recent experience operators are targeting growth of high value high-speed fixed broadband subscription growth, as well as mobile broadband growth via dedicated subscriptions and smartphones. These opportunities should allow operators to develop data revenues and help offset declines in traditional services revenues such as voice and SMS.
- Due to saturation in the mobile market, growth rates have slowed, with the latest data showing total subscriptions increasing 1.8% quarter-on-quarter (q-o-q) in Q313 to reach 55.393mn, equal to penetration of 145.3%.
- ARPU has trended downwards in 2012 and 2013, with operator performance hit by price erosion in a saturated market, MTR cuts, IP substitution and challenging economic conditions.
- The latest data from the European Commission show growth in dedicated mobile broadband subscriptions outperformed, up 21.2% year-on-year (y-o-y) to 3.86mn at YE12, compared with a 3.5% increase in fixed broadband subscriptions to 7.123mn over the same period.
Key Trends And Developments
The digital dividend in Poland was hit by a delay in February 2014 when UKE cancelled the upcoming 4G spectrum auction due to 'technical problems'. Reportedly, participants had been unable to access clarifications of auction documentation for certain periods ahead of the February 6 deadline. This deadline was therefore extended to February 14, but in light of the reactions from potential participants, the UKE decided to cancel the auction to ensure there is no room for legal doubt.
The auction had been due to offer five licences in the 791MHz-816MHz and 832MHz-857MHz band, as well as 14 in the 2,500MHz-2,570MHz and 2,620MHz-2,690MHz bands. The 800MHz band is considered to be the most valuable range of spectrum on offer, as it provides greater national coverage at a lower cost to mobile operators for 4G.
Consolidation has continued in Poland as operators employ strategies to ensure profitability in a highly competitive and rapidly evolving market. In January 2014, Polish pay-TV operator Cyfrowy Polsat's shareholders agreed to a PLN6.15bn (US$2.01bn) share issue to acquire mobile operator Polkomtel through a share-swap deal. The shareholders approved Polish billionaire Zygmunt Solorz-Zak's proposal to merge the two firms to ease the group's debt liability. Solorz-Zak has controlled both companies since 2011 through separate shareholdings, but the latest announcement takes him a step closer to creating a fully integrated telecoms and pay-TV provider.