Cyberspace lift-off
Polish cyberspace in 2000 saw the launch of about 15 horizontal portals web sites covering a broad range of topics and vortals, vertical portals dedicated to specific topics. The new entrants included sites ranging from personal finance and auctions to healthcare, cars and jobs.
The two most popular search engine portals this year remained Onet (http://www.onet.pl) and Wirtualna Polska (http://www.wp.pl). According to a year-end report issued by market research firm Taylor Nelson Sofres OBOP, 58% of respondents said they visited Onet in the preceding month, while 45% had been to Wirtualna Polska. The two sites will continue to be the most popular portals in 2001 because of their solid brand awareness, according to Andrzej Jarosz, the Warsaw-based research manager for International Data Corp. Central Europe, a global IT research firm. But portals' self-generated figures for page-views per month will remain untrustworthy without the implementation of a reliable measurement procedure.
"Some portal/vortal operators assume that their main business strategy is only to increase their user numbers, presenting this as the main asset to investors," Jarosz said.
But financial backers will be looking closely at the revenue projections of this year's online start-ups, not at user numbers. Those that fail to deliver the financial results outlined in their business models will lose out in the race for cyberspace.
In 2000, there were about 1,200 companies active in various e-commerce activities with a 10-to-1 ratio of business-to-business (B2B) sales vs. business- -to-consumer (B2C) sales, Jarosz said. The volume of e-commerce and e-banking activities in Poland is expected to pick up after next February or March with the passage of a new electronic-signature law, setting legal standards for the authorization of online retail transactions.
Media matures
The media sector showed signs of maturing this year as more firms formed into media groups to stay ahead of the competition and to expand into areas such as the Internet.
Anna Hess, an analyst at CDM Pekao Securities, said the formation of media groups has been crucial for the industry in 2000. She said many media companies that previously specialized in one sector are now looking for foreign investors or other financial partners to support their development into other areas.
Last month, ITI Holdings, which holds 67% of private broadcaster TVN, bought shares of computer maker Optimus, the owner of one of the country's largest Internet portals, onet.pl. Earlier, ITI entered into a strategic alliance with SBS Broadcasting, which acquired 100% of Strateurop International, which itself holds a 33% stake in TVN. "Polish media companies seem to have learned that they can no longer rely on themselves if they want to develop," Hess said. Elsewhere, television broadcasters have been looking closely at the potential of the Internet, and licenses given out for data transmission were among the year's top stories. "It allows us to launch a high-speed broadband Internet service, the second leg of our triple-play strategy (offering video, Internet and telephony services via cable)," said Marek Sowa, deputy president for corporate affairs at United Pan-Europe Communications' (UPC) operations in Poland. UPC also announced plans to provide Internet access via satellite for its Wizja TV subscribers. In addition, Canal+, operator of the Cyfra+ digital platform (Wizja TV's competitor), will launch a Web-casting service next spring and Polsat announced it will introduce a digital decoder to enable Internet access via a TV screen.
Telecom sales continue
The government gave the telecom market a big boost this year by partially selling state-owned monopolist Telekomunikacja Polska (TPSA) and passing a new telecom law expected to protect and promote competition in the sector.
The sale of a 35% slice of TPSA to a consortium of France Telecom and conglomerate Kulczyk Holding for zl. 18.6 billion ($4.3 billion) in July was the largest sell-off of a state asset in Central and Eastern Europe since the collapse of communism.
Meanwhile, a telecom law passed in July and effective Jan. 1, 2001 will put into place European Union regulatory procedures that will reduce squabbles between TPSA and its competitors over issues such as interconnection terms that hinder an open market. It also will dissolve the current Communications Ministry, replacing it with an independent regulatory body (URT) on the first day of the new year.
The number of mobile phone users hit 5.5 million in 2000 after enjoying two years of 100% growth per annum. Poland's three mobile operators Polska Telefonia Cyfrowa (Era GSM), Polkomtel (Plus GSM) and PTK Centertel fell victim to the wireless application protocol (WAP) flop.
In 2000, key stumbling blocks to competition in the sector were the lack of uniform interconnection terms and fees for competing operators, which must link to TPSA's network to provide service; the partially closed market on local and domestic long-distance (DLD) calling service; and TPSA's monopoly on international long-distance (ILD) calls, which will continue until 2003.
Despite service offers from other Polish telecoms, the country's number of fixed-line phones in 2000 remained far below Western Europe's average of about 50 lines per 100 inhabitants. According to International Data Corp., a global information technology market forecaster, about 29% of Poland's 39 million people had access to fixed-line phones this year, compared with 26% in 1999 and 23% in 1998.
The telecom sector went out with a bang in December when the contentious universal mobile telecommunications system (UMTS) license tender fizzled after the three Polish mobile operators were the only firms to place bids, ending the government's hopes of selling five licenses for a total O3.25 billion.
Next year telecom companies will increasingly offer data transmission capabilities, given relaxed regulations and registration procedures, said Piotr Rutkowski, managing partner of Rotel, a telecommunications consulting firm. Look for TPSA to promote an intense marketing campaign for its own broadband Internet service in 2001.
