Global Insight Perspective | |
Significance | Poland's number-one and -three mobile operators, PTC and Polkomtel, have signed separate MVNO deals with Polsat and P4 respectively. |
Implications | The move signals the entry of new players onto the Polish mobile market. |
Outlook | It is expected that new MVNO deals will follow, boosting competition among mobile operators and service providers. |
Poland's fourth UMTS licence holder, P4, has signed an exclusive roaming contract with the country's number-three cellco, Polkomtel. Under the terms of the deal, P4 - a cellular arm of leading alternative telco Netia (30%) and Icelandic private equity fund Novator (70%) - has access to voice connections, SMS services, and data transmission via Polkomtel's network, which it can resell under its own brand. However, P4 is not allowed to use Polkomtel's rivals’ networks. The deal is valid for five years, with a two-year extension period. In the meantime, the country's leading commercial TV channel, Polsat, has finalised the country's first MVNO deal with the top mobile player PTC. Polsat expects to launch services by end-2006 or the beginning of 2007. Both PTC and Polkomtel are conducting talks with other potential MVNOs for network access.
Outlook and Implications
Favourable Regulatory Environment: The country’s first MVNO deals follow last week's ruling by the country's telecoms regulator, the UKE, that Polkomtel is formally obliged to finalise the terms of the domestic roaming agreement with P4. The fourth mobile licence holder asked the regulator at the end of last month to decide on the terms of a domestic roaming deal with Polkomtel, or else the company would reach its own agreement (see Poland: 31 May 2006: P4 Finalises Roaming Agreement With Polkomtel). The regulator's decision favours the entry of MVNOs on the Polish mobile market, and it is expected that a number of other potential MVNOs will sign network access deals in the short term. More MVNO deals are likely to follow. Polkomtel is currently negotiating with ten other MVNO licence holders, including Polish alternative telco NOM, part of the Exatel group, and carrier pre-selection (CPS) operator MediaTel (see Poland: 18 April 2006: NOM Negotiates MVNO Deal with Polkomtel and 20 February 2006: MediaTel Negotiates MVNO Deal with Polkomtel). According to the regulator, there are 78 MVNO licence holders in Poland.
Threat or Boost for Competition?: The MVNO entrances are seen as a threat to the existing mobile operators. Both PTC and Polkomtel have so far opted to co-operate with MVNOs, expecting that such deals will boosts their revenues (see Poland: 26 May 2006: Polkomtel Does Not View MVNOs as a Threat). The country's number-two player, Orange (owned by incumbent operator TP), has not issued a formal statement on the issue of domestic roaming.
P4 won the country's UMTS licence last year, and the deal with Polkomtel will it to use Polkomtel's second-generation GSM network while it develops its W-CDMA infrastructure. P4 plans to launch services in the fourth quarter of this year under a different brand name, and to capture 5% of the mobile market in terms of revenues by end-2007. It estimates that its capital expenditure will amount to US$1 million over the next five to six years, and aims for between 17% and 25% of the Polish mobile market by 2016.
Organic Growth Potential: With mobile penetration at 76.1% at end-2005, the Polish mobile market has still room for organic growth. The country's three mobile players are fairly even in terms of market share. At end-2005, Orange reported 9.9 million mobile customers (34% market share), compared to the 10.2 million (35% market share) registered by PTC. Third-placed Polkomtel ended 2005 with 9.05 million customers (31% market share). Orange has been closing the gap on PTC and aims for 11.5 million subscribers at end-2006. The latter expects to capture 12.4-12.5 million mobile subscribers, while Polkomtel aims to add 2 million new customers to reach more than 11 million, by end-2006.