ERA GSM: High tech ready, will demand follow soon enough?

By Timothy Sifert

Polska Telefonia Cyfrowa (PTC) plans to launch its wireless fidelity (Wi-Fi) service by the end of this year, opening more than 50 "hot spots" throughout the country to test demand among Poles for the advanced technology that has a strengthening foothold in Europe and the U.S. PTK Centertel and, most recently, Polkomtel have already introduced hotspots in places such as airports, hotels and malls, where - laptop technology depending - computer users can hook up to the Internet through a wireless local area network (WLAN).

The moves by the nation's three mobile carriers have been criticized by some analysts as publicity stunts, because the demand is so low and revenue from any customers would be negligible. But, by opening public service outlets throughout the country, executives at the companies believe that they are laying a vital part of the foundation for their industry's future battleground: providing wireless applications and services.

There are already hotspots throughout the country, in places such as the Old Town Square in Kraków and Warsaw's Novotel Airport hotel, but the question still lingers about how much of a demand exists, especially in a country, which is at a low-end in Europe in terms of mobile phone penetration - let alone WLAN-enabled laptops.

"Nobody knows what the demand is," admits Marcin Burkowski, deputy business development director at PTC, which operates the Era brand name. "We will see. Let us start," he says. "The industry is forecasting that 2004 will be the moment of truth." At the outset, he says, there will only be a few thousand potential customers for the Wi-Fi service, but as it becomes more common to have multiple devices hooked up to wireless networks, the number of potential customers should skyrocket.

Not everybody is so optimistic about the country's pace of adoption.

Michał Marczak, analyst at BRE Bank, says he doesn't expect Wi-Fi to afford any significant component of mobile companies' revenue for another five years. "There's a big difference between Poland and Great Britain," he says. "There are not so many laptops in Poland."

Companies seen undaunted. "This is the battleground for multi-media services," PTC's Burkowski says.

Early this year Centertel, the operator of Idea, opened the country's first Wi-Fi hotspot with the help of IBM and Intel, while last week Polkomtel, the operator of Plus GSM, launched wireless access, with service available in Pyrzowice and Ławica airports and Warsaw's Promenada shopping mall.

However, with all the movement, Burkowski denies that this segment of the telecom market is competitive. Referring to the news of his competitors' progress, he said, "This is not heartbreaking." But he admitted that as long as it's economically viable, PTC would try to open as many hotspots as possible.

"My opinion is that it all depends on coverage," he says.