Market environment and competition

Broadband Internet access in Poland is provided through fixed-line and wireless networks. The market’s relatively low saturation and strong growth potential make it attractive for investment. Mobile data transfer is now the fastest-growing segment of the telecommunications market. With the growing number of mobile devices such as smartphones and tablets, wireless Internet services are becoming increasingly popular.

Because the report of the Office of Electronic Communications (UKE) on the telecommunications market is usually released in the second half of the following year, our data only covers the period to end 2012.

According to data published by the UKE (‘Report on the condition of the Polish telecommunications market in 2012′, June 2013), 83.5% of Polish households had access to broadband Internet in 2012, and the penetration rate was 29.3% per 100 inhabitants. In 2012, nearly 7.6 million people in Poland had fixed-line Internet access (an increase of 13.4% on the end of 2011) and more than 4.1 million used mobile Internet services (an increase of 24.2% on 2011). 1.6 million new Internet users were recorded, more than a half of whom had mobile service subscriptions.

According to data from the European Commission in the ‘Digital Agenda Scoreboard 2013′, Poland was 9th in the EU in terms of mobile Internet penetration per 100 inhabitants, with a rate of 10.1%, 1.1 pp above the EU average of 9%. As regards fixed-line broadband Internet access, the penetration rate was 18.8%, 10 pp below the EU average of 28.8%.

According to UKE data, the value of the Polish broadband market, measured in terms of revenue, was PLN 4.4bn in 2012, up 10.7% on 2011. Despite the continuing decline of revenue from xDSL-based services (largest share in the revenue structure), there was an increase in revenue from services based on other technologies. Services based on 2G/3G modems saw the strongest revenue growth, of 41.5% year to year. The average monthly revenue per user of Internet (ARPU) in 2012 was PLN 31.5, 4.8% less compared with the previous year.

As reported by UKE, the 2012 mobile Internet access market continued to be dominated by four infrastructural mobile network operators (holding between them 95.1% of the total customer base). The chart below shows the market shares of the respective operators from the total number of 2G/3G modem users:
Source: UKE.

According to PMR forecasts (’2013 Telecommunications Market in Poland − Development prospects for 2013–2017′), the market of data transmission, leased lines and Internet access will remain the fastest-growing telecommunications market segment. Further investments in the broadband network and expansion of LTE technologies will be key drivers in the market’s growth. The compound average growth rate (CAGR) of the market will be 3.9% by 2017.

A key factor in the development of mobile Internet and its lower pricing is the development of a new technology (LTE) network, available from only three market players – Cyfrowy Polsat, Polkomtel and P4. LTE provides mobile services with transfer speeds and bandwidth capacities beyond those of existing radio technologies. Experts argue that the technology may well replace cable Internet access in the future. The appeal of LTE is also seen in more widespread interest in the relevant radio frequencies and the tendering procedures for the 1800 MHz band, and the 800 MHz band, launched in the fourth quarter of 2013.

The following chart shows expected growth of the broadband market (by the number of subscribers, in thousands) in 2013-2017:
Source: PMR Report.

PMR predicts that in 2013–2017 the number of users of mobile broadband services will outgrow the number of users of fixed-line access services. The compound annual growth rate of mobile Internet access over the five years will be 8.8%, and 2.4% for fixed-line broadband Internet.