2012-05-04 15:28:39 - New Fixed Networks market report from Business Monitor International: "Poland Telecommunications Report Q2 2012"

BMI's Q212 update to the Poland Telecommunications report draws on data from Poland's fixed-line, broadband, mobile and pay-TV operators and service providers, as well as data released by the country's regulator, the UKE. In most cases these data cover the period up to the end of December 2011. However, a portion of the figures have been estimated by BMI based on historical data and the trends in the market. The data underpin our forecasts for Poland's fixed-line, broadband and mobile subscriber markets, as well as for mobile ARPUs.

The major trend in Polish telecoms is the continued investments in data services, both wireless and wireline networks. The significant expansion of wireless data networks has led to pseudo-consolidation in the Polish mobile

market as T-Mobile and Orange have reached an agreement to share some of the costs of network rollout and upkeep through the venture NetWorks!. Meanwhile, Polkomtel, which was acquired by Solorz- Zak, has rolled out LTE in the 1,800MHz band, drawing on synergies with operators controlled by NFI Midas, also owned by Solorz-Zak. Further, pay-TV operator Cyfrowy Polsat has been expanding its presence in telecoms utilising Polkomtel's tower infrastructure for the build-out of an LTE network, also in the 1,800MHz band. With this pseudo-consolidation through network infrastructure, the regulator announced a consultation over the allocation of 1,800MHz spectrum, and later the sub-1GHz band, and determined that it is looking to reserve a portion of the spectrum for either the smallest operator P4 or potentially a new entrant. BMI welcomes the intention to avert an infrastructure duopoly at the national coverage level of Poland's telecoms markets and will provide updates on operator responses in the coming months.


Full Report Details at
- www.fastmr.com/prod/359566_poland_telecommunications_report_q2_2 ..


The shift of operator focus towards mobile data has determined our forecast for Poland's mobile subscriber and ARPU markets. Mobile subscriber growth has accelerated in 2011 as a result of P4's competitive threat; however, we expect growth to slow over the duration of our forecast period to 2016. Some of the slowdown will be the result of discounting of inactive prepaid subscribers from the recent period of growth that has been reliant on prepaid net additions, for instance T-Mobile's Q411 performance. Meanwhile, the shift in strategic focus on the part of operators will also be a factor as they look to increase the value generated from subscribers through promotion of wireless data services and postpaid migration. With penetration rates above 130%, growth potential is limited and as such we expect value generation strategies to supersede subscriber acquisition strategies in the short-to-medium term. BMI forecasts total mobile subscriptions to decline from 50.983mn[is this the 2011 figure or is forecast table wrong?] at YE12 to 49.758mn at YE16, falling to a penetration of 129.7%. This value generation will result in a mild upward trend in operator ARPUs.

Meanwhile, the Polish fixed-line market presents a far less attractive investment prospect than mobile as it has continued to decline in terms of subscribers and volume of traffic (and will continue to do so as consumers replace their narrowband accesses with fixed and mobile broadband connections). We downgraded our forecast again this quarter as a result of faster than expected subscriber losses by the incumbent TPSA. One bright spot for the fixed-line market is the continued success of converged services. UPC, Poland's largest cable operator, added 141,000 fixed-line revenue generating units in 2011. This growth was built on multi-play packages, and, with Telekomunikacja Polska (TPSA), Netia and Cyfrowy Polsat becoming increasingly multi-play oriented, there are more positive signs in an otherwise decreasing market. However, we caution that the increasing threat from mobile broadband following Cyfrowy Polsat's LTE launch will reduce the positive impact of multiplay services on fixed-line subscriptions.

Fixed and mobile broadband services have continued to perform strongly in Poland. TPSA, which is managed by France Telecom and provides many of its most popular services under the Orange brand, has stated that it sees its future as a broadband provider and feasibly sees the elimination of the fixed-voice element of its business over the medium term. It has also stepped up the competition in wireline broadband with investments in infrastructure to upgrade customer speeds in the face of competition from the country's cable providers. As it controls the majority of the country's last mile plant, TPSA also dominates the fixed broadband market with its ADSL-based services prevailing and any upgrade would have a major impact on customers' services both direct from TPSA and wholesale from alternative providers. However, BMI believes the incumbent will still trail the cable operators in terms of broadband speeds, which will see it struggle to match their growth rates as consumers increasingly demand bandwidth-hungry services such as VOD and other OTT VAS.

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