Market enviromnent and competition

In Poland, pay TV services are offered by satellite TV (DTH) operators, cable TV operators and IPTV providers. By our estimates, at the end of 2013 Polish operators provided pay TV services to approximately 11 million subscribers.

Cable TV was once the main access channel to pay TV services in Poland. Although the market of digital satellite platforms has grown more rapidly in recent years, DTH providers only compete with cable TV operators to a limited extent. Cable TV operators focus on customers in densely populated areas, where extensive infrastructure already exists or can be developed at a relatively low cost per subscriber. DTH operators, on the other hand, are able to offer their services to customers in both urban areas and less densely populated places with non-existent or poorly developed cable TV infrastructure, without increased costs.

In recent years, the number of subscribers to satellite pay TV platforms has been growing much faster than those subscribing to cable TV, due to the already high penetration rate of cable TV in urban areas and the reluctance of cable TV operators to make significant investments in cable TV infrastructure in the less densely populated and rural areas of Poland. Strong growth in the number of satellite pay TV subscribers in Poland also reflects the fact that DTH providers are able to offer much broader programming options, including more than 100 Polish language channels and around 500 free-to-air channels, using both SD and HD technology.

The IPTV market in Poland is growing relatively slowly, mainly due to technological constraints resulting from the lack of modern infrastructure with sufficient capacity to provide high-quality and profitable services.

Digital satellite pay TV operators

In 2013, there were two main DTH platforms in Poland: Cyfrowy Polsat and nc+. The nc+ platform was established in March 2013 following a merger between Cyfra+ and ‘n’ under strategic partnership agreements between the Canal+ Cyfrowy Group and TVN. According to TVN Group reports, the nc+ subscriber base was 2.2 million as at the end of 2013. In addition, according to our estimates, there were about 300 thousand users of the ‘Telewizja na Kartę’ (TNK) prepaid TV service as at the end of 2013. Since 2006, Cyfrowy Polsat has been the leader of the Polish satellite TV market in terms of subscriber base and market share, reporting over 3.5 million subscribers.

Cable TV operators

According to data presented by the Polish Chamber of Electronic Communication (PIKE), as at the end of the third quarter of 2013, the Polish cable TV market was dominated by three major operators, whose combined market share was close to 68%. The operators are: UPC Polska, Vectra and Multimedia Polska. According to our estimates, there are also over 500 smaller cable TV operators active in Poland. PIKE reports that the aggregate subscriber base of cable TV service providers in Poland was approximately 4.6 million as at the end of the third quarter of 2013.

Internet Protocol Television (IPTV)

The leading Polish IPTV operator is Orange Polska S.A. (formerly Telekomunikacja Polska S.A.), primarily a provider of fixed-line telephony services. In 2006, the operator launched its IPTV services for customers with broadband Internet access. As at December 31st 2013, IPTV services offered by Orange Polska S.A. were used by 121,000 subscribers (as reported by Orange Polska S.A.). The second largest pay IPTV operator is Netia S.A. (which acquired Telefonia Dialog Sp. z o.o. in December 2011). According to data released by the operator, as at the end of 2013 it provided TV services (including IPTV and smooth streaming, launched in the third quarter of 2012) to 120,321 subscribers.