Poland misses out on $66 million TV plant
"I am not surprised," said Janusz Pawlik, marketing manager for Philips Polska, who had lobbied to get the site in Poland. He said Poland lost the deal because of the saturated domestic television market. "It is not possible to establish five or six color television factories in one country." He was also not aware of any financial incentives offered by the Polish government.
Deferrals on customs duties and infrastructure investment by the city of Pilsen in western Bohemia played a role in choosing the Czech Republic, Deputy Trade and Industry Minister Vaclav Petriaek told the Prague Business Journal. The company had conducted a feasibility study examining the markets in Poland, the Czech Republic and the Commonwealth of Independent States. Matsushita executives declined to say whether the Polish government had offered any similar incentives.
A Matsushita executive said that economic stability was a deciding factor in selecting the Czech Republic. "The Czech Republic was number one from a macroeconomic point of view," the executive said.
The plant, which will manufacture color televisions under the Panasonic brand name, will be the largest Japanese investment in the Czech Republic.
Czech Trade and Industry Ministry Vladimir Dlouh claimed the company would receive no tax breaks. However, Matsushita will be given customs duty deferrals on high-tech machinery imports, saving the company up to $5.4 million until legislation exempting such imports passes sometime in 1997, Petriaek said.
The $66 million investment would have been a major boost for Panasonic Polska, Matsushita's Polish arm, which is seeking to raise its domestic market share from 6% to 10% this year. Last year Panasonic Polska reported revenues of $135 million.
Panasonic Polska is concentrating on low- to medium-end consumer marketing, selling 14- and 21-inch models manufactured in Europe and Japan.
"We are not launching too extensive models because definitely consumers cannot afford them," Pawlik said. Last year Panasonic sold 45,000 television sets in Poland.
Pawlik said that although demand is growing for color television sets in Poland, the financial incentives to shift production here are shrinking.
Experts estimate Poland's television market at well over $500 million in annual revenues every year. Though more than 80% of Polish households own television sets, in the last year about half a dozen foreign electronics giants have announced plans to establish factories producing color sets for consumers who replace older models.
The decision by Matsushita comes on the heels of German-based Grundig Electronics' decision to spend $8 million to expand a television factory in southwestern Poland scheduled to open in August. The company plans to produce 70,000 television sets this year, and 800,000 sets next year. The $10 million factory will produce 14- and 21-inch sets as well.
This summer, Dutch firm Philips Polska invested $25 million in a joint venture with the Polish Brabork television manufacturer in northern Poland The factory has a production output of 500,000 color television sets annually.
Panasonic Polska was established in 1990 as a joint venture between Matsushita and Mitsubishi. In 1995 the firm invested ECU 28 million ($36 million) in a joint venture with Philips for a dry-cell battery factory in Gniezno. The factory, which employs 280 million people, expects to produce 500 million batteries this year.
Panasonic claims a 50% market share of the video recorder market in Poland and 30% of the stereo market.
-Hana Lesenarova, Prague Business Journal,
and Renée Cordes, Warsaw Business Journal
Matav under fire from Internet providers
BUDAPEST-The entry of Hungarian telecom giant Matav into the crowded market of Internet service providers has its small local competitors. howling.
A group of Internet providers are poised to file a complaint against Matav with the national Competition Office. The group complains that the former monopoly's prices may be, in some cases, half their own.
The providers argue that Matav, which had 1994 revenues of Ft 90 billion ($625 million), will subsidize its Internet service prices from other revenue sources. Further, they complain that the company can use its country-wide contacts to squezze them out of the tiny but burgeoning Internet access market.
A consortium of Ameritech and Deutsche Telekom owns 67% of Matav.
Matav officials deny their service will compete unfairly.
"We want to dominate the market, but we don't want to kill the competition," said Janos Geréb, product manager for Matav's Internet service. "The prices will be very compatible with other service firms."
A group of Internet, e-mail and online service providers including CompuServe, EUnet, Magnet and iSYS have met with officials from the Competition Office. "If (they) prove that Matav is starting its business with a serious price advantage, then it is likely that Matav will be reprimanded," Nyeste said.
Matav's prices will be markedly lower in some cases, a copy of the company's Internet pricing structure reveals. Matav will offer a stripped-down e-mail package for Ft 900 ($6) per month, while Magnet, one of the cheapest electronic mail services available, offers accounts for about Ft 1,700 ($12) per month.
Other Internet services are also expected to be cheaper, but because of the variety of accounts andsurcharges that are offered, comparing prices is difficult.
The market has grown over the last year from just three Internet providers to nine. The number of businesses using the Internet has grown from 500 a year ago to 5,000 today, market participants estimate.
Officials from the Competition Office said the burden of improving unfair business practices falls on the service providers. They must file a complaint and then show their businesses have been unfairly harmed by Matav. The Competition Office would then make recommendations to the competition Committee which rules on the cases and levies fines.
-Jim Kharouf and Gabor Jelinek,
Budapest Business Journal
Budapest transport firm enters telecom market
BUDAPEST-Matav, Eastern Europe's most private national telephone system operator, is facing competition from an extremely unlikely source: the city-owned Budapest transportation company BKV.
Outfitted with a new fiber-optic network, BKV is courting some of Hungary's sexiest telecom clients. The competition is a prime example of the new age of telecommunications in which customers can become competitors with the flip of a switch.
BKV doesn't have any customers signed on yet, said Imre Dévényi, the company's telecommunications manager. The transportation company is negotiating with two or three unnamed potential clients, he said.
BKV is armed with a fiber-optic network completed earlier this month for it by AT&T Hungary. The network, which cost Ft 200 million ($1.38 million) to Ft 500 million ($3.47 million), replaces an older network used to monitor the transportation company's metros, buses and trolleys.
If BKV scored with the right customers, the stakes could be large, said Ivan Feczko, head of Matav key customer services division.
At Matav, as at most telephone companies, Feczko said, that 20 to 30 big customers account for 60%-80% of total revenue.
-Janel Siemplenski,
Budapest Business Journal
Deferrals on customs duties and infrastructure investment by the city of Pilsen in western Bohemia played a role in choosing the Czech Republic, Deputy Trade and Industry Minister Vaclav Petriaek told the Prague Business Journal. The company had conducted a feasibility study examining the markets in Poland, the Czech Republic and the Commonwealth of Independent States. Matsushita executives declined to say whether the Polish government had offered any similar incentives.
A Matsushita executive said that economic stability was a deciding factor in selecting the Czech Republic. "The Czech Republic was number one from a macroeconomic point of view," the executive said.
The plant, which will manufacture color televisions under the Panasonic brand name, will be the largest Japanese investment in the Czech Republic.
Czech Trade and Industry Ministry Vladimir Dlouh claimed the company would receive no tax breaks. However, Matsushita will be given customs duty deferrals on high-tech machinery imports, saving the company up to $5.4 million until legislation exempting such imports passes sometime in 1997, Petriaek said.
The $66 million investment would have been a major boost for Panasonic Polska, Matsushita's Polish arm, which is seeking to raise its domestic market share from 6% to 10% this year. Last year Panasonic Polska reported revenues of $135 million.
Panasonic Polska is concentrating on low- to medium-end consumer marketing, selling 14- and 21-inch models manufactured in Europe and Japan.
"We are not launching too extensive models because definitely consumers cannot afford them," Pawlik said. Last year Panasonic sold 45,000 television sets in Poland.
Pawlik said that although demand is growing for color television sets in Poland, the financial incentives to shift production here are shrinking.
Experts estimate Poland's television market at well over $500 million in annual revenues every year. Though more than 80% of Polish households own television sets, in the last year about half a dozen foreign electronics giants have announced plans to establish factories producing color sets for consumers who replace older models.
The decision by Matsushita comes on the heels of German-based Grundig Electronics' decision to spend $8 million to expand a television factory in southwestern Poland scheduled to open in August. The company plans to produce 70,000 television sets this year, and 800,000 sets next year. The $10 million factory will produce 14- and 21-inch sets as well.
This summer, Dutch firm Philips Polska invested $25 million in a joint venture with the Polish Brabork television manufacturer in northern Poland The factory has a production output of 500,000 color television sets annually.
Panasonic Polska was established in 1990 as a joint venture between Matsushita and Mitsubishi. In 1995 the firm invested ECU 28 million ($36 million) in a joint venture with Philips for a dry-cell battery factory in Gniezno. The factory, which employs 280 million people, expects to produce 500 million batteries this year.
Panasonic claims a 50% market share of the video recorder market in Poland and 30% of the stereo market.
-Hana Lesenarova, Prague Business Journal,
and Renée Cordes, Warsaw Business Journal
Matav under fire from Internet providers
BUDAPEST-The entry of Hungarian telecom giant Matav into the crowded market of Internet service providers has its small local competitors. howling.
A group of Internet providers are poised to file a complaint against Matav with the national Competition Office. The group complains that the former monopoly's prices may be, in some cases, half their own.
The providers argue that Matav, which had 1994 revenues of Ft 90 billion ($625 million), will subsidize its Internet service prices from other revenue sources. Further, they complain that the company can use its country-wide contacts to squezze them out of the tiny but burgeoning Internet access market.
A consortium of Ameritech and Deutsche Telekom owns 67% of Matav.
Matav officials deny their service will compete unfairly.
"We want to dominate the market, but we don't want to kill the competition," said Janos Geréb, product manager for Matav's Internet service. "The prices will be very compatible with other service firms."
A group of Internet, e-mail and online service providers including CompuServe, EUnet, Magnet and iSYS have met with officials from the Competition Office. "If (they) prove that Matav is starting its business with a serious price advantage, then it is likely that Matav will be reprimanded," Nyeste said.
Matav's prices will be markedly lower in some cases, a copy of the company's Internet pricing structure reveals. Matav will offer a stripped-down e-mail package for Ft 900 ($6) per month, while Magnet, one of the cheapest electronic mail services available, offers accounts for about Ft 1,700 ($12) per month.
Other Internet services are also expected to be cheaper, but because of the variety of accounts andsurcharges that are offered, comparing prices is difficult.
The market has grown over the last year from just three Internet providers to nine. The number of businesses using the Internet has grown from 500 a year ago to 5,000 today, market participants estimate.
Officials from the Competition Office said the burden of improving unfair business practices falls on the service providers. They must file a complaint and then show their businesses have been unfairly harmed by Matav. The Competition Office would then make recommendations to the competition Committee which rules on the cases and levies fines.
-Jim Kharouf and Gabor Jelinek,
Budapest Business Journal
Budapest transport firm enters telecom market
BUDAPEST-Matav, Eastern Europe's most private national telephone system operator, is facing competition from an extremely unlikely source: the city-owned Budapest transportation company BKV.
Outfitted with a new fiber-optic network, BKV is courting some of Hungary's sexiest telecom clients. The competition is a prime example of the new age of telecommunications in which customers can become competitors with the flip of a switch.
BKV doesn't have any customers signed on yet, said Imre Dévényi, the company's telecommunications manager. The transportation company is negotiating with two or three unnamed potential clients, he said.
BKV is armed with a fiber-optic network completed earlier this month for it by AT&T Hungary. The network, which cost Ft 200 million ($1.38 million) to Ft 500 million ($3.47 million), replaces an older network used to monitor the transportation company's metros, buses and trolleys.
If BKV scored with the right customers, the stakes could be large, said Ivan Feczko, head of Matav key customer services division.
At Matav, as at most telephone companies, Feczko said, that 20 to 30 big customers account for 60%-80% of total revenue.
-Janel Siemplenski,
Budapest Business Journal
