Poland telecoms market
Poland’s economy is the second largest in eastern Europe behind Russia, and it is blessed with fierce local demand for telecoms services as well as being strongly positioned to cater for growing international connectivity between Asia and Europe.
The country is in possession of a well developed mobile market served by a balanced mix of mobile operators and MVNOs. LTE has been in trial there since late 2010 when a number of players built the country’s first base stations, having secured frequencies in the 850MHz, 900MHz, 1.8GHz and 2.6GHz bands. According to analyst firm BuddeComm, plans are in place for the nation’s operators to eventually oversee about 2,000 base stations in the 1800MHz band and a further 3,350 in the 900MHz band, providing 60% geographic and 75% population coverage.
There have been several key developments in the Polish market in the last year. In July 2011, an agreement was put in place for the country’s second largest mobile operator, Polkomtel, to be acquired for approximately $6.5 billion by the Polish tycoon Zygmunt Solorz-Zak. The deal is said to be one of the largest European telecom sector buyouts in years and the largest acquisition ever made in Poland. Polkomtel has approximately 14 million customers for voice and internet services across Poland, and Solorz-Zak has signalled his plans to use the acquisition to drive forward the deployment of LTE networks across the nation.
Meanwhile the country’s largest operator PTK Centertel, which is owned by Orange, signed a network sharing deal with third place PolskaTelefoniaCyfrowa, which is owned by T-Mobile. The joint venture will see the two operators share their radio access networks over a 15 year period. While each company will remain respective owners of their core networks and frequencies, the operators will be able to eliminate duplicate base stations, serving both customer bases from a total of 10,000 installations. The move is estimated to save approximately €356 million.
Indeed, collaboration between Polish operators only looks set to continue given the structure of the country’s forthcoming spectrum auction. Polish regulator UKE plans to allocate free resources in the 1800MHz band in the middle of 2012, and will begin inviting operators to tender for frequencies in the 800MHz and 2600MHz bands during the start of 2013. This has already prompted two mobile operators PTK Centertel and P4 (Play) – to form a joint venture in preparation to bid for the 2600MHz spectrum, with some players in the market complaining that the blocks made available are too large for a single company’s needs.
Regardless, the roll-out of LTE looks set to benefit many corners of the Polish market. According to Maciej Krzyzanowski, VP of operations at Polish data centre provider ATM, Poland is becoming an increasingly attractive market for the global carrier community. “LTE deployment is one of many factors helping to attract the attention of the world’s largest carriers, encouraging them to enlarge their activities in the country due to the increasing number of customers using their services,” says Krzyzanowski.
“The increasing number of customers is also a direct result of the good condition of the Polish economy, which has been growing for the last few years and is estimated to continue in the future. Poland is also seen as the shortest land way from western Europe to Russia and middle Asia.”
These developments have helped drive demand for data centre services in Poland, and through its two data centres in Warsaw, ATM has seen its share of the market grow to 20%. Krzyzanowski claims co-location costs in Poland are 30% lower than in other mature European market while the prices of IP and data transmission services in the country are comparable to those in Frankfurt. “To conclude, Warsaw has become an attractive option for EMEA operations to locate a data centre,” he says.
The growth of voice, data and internet traffic passing between Europe and Asia via Russia has also opened up new transit capacity opportunities for Polish carriers. Poland offers one of the shortest latency routes for traffic passing from Russia onto Western Europe, and Polish carriers such as Exatel have been extending backbone networks across the country to support international demand.
Exatel has a backbone fibre-optic network spanning 20,000km across Poland, which interconnects with networks from more than 30 global operators in Europe and at the country’s borders. According to the company’s director of wholesale for international data services, Damian Matyszewski, transit capacity in Poland has increased rapidly in recent years as a knock-on-effect of developments in the Russian market.
“Traffic from Asia goes through Moscow, and then we are the fastest route onto Europe,” he says. “The Russian market has really opened up to us over the last few years. First of all, pricing dropped and that opened the market up dramatically. Secondly, the Russian market started to become a lot more involved in transit capacity and new routes opened which gave direct access to Asia. We see this only becoming more important in the future.”
Population (July 2011 est.)
GDP (official exchange rate 2010 est)
GDP real growth rate (2010 est.)
Source: CIA World Factbook