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PKP's telecom arm to ply internet strategy, launch GSM

Services to Polish State Railways (PKP) provide TK with 65 percent of its revenues, while the open market in which it competes with TP SA, Netia and Telefonia Dialog, makes up the balance.

This year TK plans to increase the number of customers - both business and private - it wrests from its market competitors rather than attempting to boost revenues from providing PKP with services.

And one reason TK is so eager to win new clients is that the growing competition among fixed-line providers, even with the monopoly-like presence of TP SA, has forced down prices, chipping away at an important revenue base.
"Thus, customer acquisition is becoming even more important than before," says Jerzy Moskwa, a director at TK.

"Because of the strong competition in the outside market, prices have been getting very low in the last year," says Moskwa. He explains that the trend is good for customers but not initially a benefit for telecom carriers.

In that light, instead of pushing only traditional voice services, TK is augmenting its offer with Internet services. Moskwa realized that all other telecom operators seem to be following this trend, but noted that TK has a relative advantage because it owns one of the three largest networks in the country.

At the same time, TK plans to launch GSM services - but only for the PKP railroad customer with its GSM-R license. GSM-R is an international standard tailored to railroad networks that provides wireless communication between a railroad's many functions through voice and data transmission. TK also gives short shrift to recently announced plans of the country's telecom regulator, URTiP. The telecom watchdog has said it might try to sell another GSM and UMTS license that would allow a fourth operator to compete on the national open market.

"We'd rather not," says Moskwa, "There are too many operators, so we are not planning anything."
He explains that Poland's three operators have a roughly similar market share, which would make it difficult for any company - even one as established as TK - to carve out a profitable niche. Infrastructure build-up would be enormously expensive to boot, he said.

Nonetheless, TK plans to develop its GSM-R license to link together its railway employees, equipment and services. But that will take time and money, too.
Moskwa declines to speculate on just how much the GSM-R would cost.
"It's a long process and very costly," he said. At present, TK's wireless communications encompass basic analog radio technologies.

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