PTK close to gaining license
After more than a year of waiting for its data transmission license, Polska Telewizja Kablowa (PTK) is expected to be granted the concession within a few weeks, said Przemyslaw Sypniewski, the adviser to the communications minister last Friday. This marks a change from Thursday's market speculations, when sources said the license would be awarded "in just a few days."
PTK, owned by the Amsterdam-based United Pan-Europe Communications (UPC), applied for the license on May 4, 1999. The license will allow UPC, a multi-media company, to enter the internet market in Poland and gain instant access to PTK's 1 million cable subscribers. UPC acquired PTK last August through its $1 billion purchase of @Entertainment. UPC also plans to add telephony to its cable and internet offerings, but according to Andrzej Muras, president of Polska Telewizja Cyfrowa Wizja TV (owned by Medialne Towarzystwo Akcyjne, which is 49% owned by UPC), this isn't possible until the market is deregulated.
PTK's first office was established in 1989 in Gdansk, where former President Lech Walesa was the company's first client. Today PTK is hoping to boost its number of subscribers to 1.3 million from markets in and around Warsaw, Gdansk, Gdynia, Sopot, Szczecin, Lublin, Wroclaw, Katowice and Bydgoszcz. According to Muras, PTK's cable network in Warsaw and Krakow is already high-speed internet compatible. "Once we get the concession we will need three months to introduce the high-speed internet to our systems," he said. UPC plans to invest $100 million in modernizing PTK's cable network by the end of the year. That modernization is expected to make PTK's lines eight to 10 times faster than existing phone lines. "After Krakow and Warsaw, it will be time to update the lines in Lublin, Szczecin, Gdansk and Wroclaw," Muras said.
Cable access allows data to be transmitted over the internet to the surfer's desktop at speeds much faster than those of traditional dial-up services. A good dial-up modem may achieve 58 kilobits per second, while cable can hit 600 kilobits or more. A cable modem can cost about $300, however. Muras wouldn't disclose the installation cost and monthly service fee for those who want to use the speedier connection, "but the fee will entitle them to surf for as much time as they want with no additional costs," he said. "I expect a revolution on the market since other operators will try to keep up with the best ones."
Piotr Czarnowski, public relations consultant for the Elektrim-owned Aster City cable TV network, which already holds a license for data transmission in Warsaw, wouldn't comment on the consequences of UPC entering the Polish internet market. "Elektrim already offers everything cable TV, telephony and internet," he said. El-Net, a fixed-line telephony company also owned by Elektrim, is one of three operators with a license for telecommunication services in Warsaw, along with Telekomunikacja Polska (TPSA) and Netia. Aster City also has ambitions to combine television services with telephony and the internet. Elektrim, through its subsidiary Polish Phonesat already holds a license for satellite data transmission in Poland. "Aster City did not and will not apply to expand its data transmission concession for Warsaw," Czarnowski said. "If we wanted such expansion it would be done through Polish Phonesat."
A PTK concession would also mark a significant challenge to the existing local cable operators, who would like to expand their services and also provide internet access to their subscribers. Apart from PTK's application, 28 smaller local cable operators have been waiting for the Communications Ministry to decide on their fate since 1997. According to Sypniewski, the ministry is also working on the local applications. "I'm sorry that it's taken three years but I hope that apart from PTK, more licenses will be granted," he said.
Still, local operators aren't satisfied. "So what? Even if they (the ministry) issue two or three licenses more that doesn't change the situation for the mass of smaller operators," said Andrzej Ostrowski, president of the board of the Cable Communication Chamber of Commerce, which represents a group of operators whose client base totals 4 million households. Local operators want the ministry to exempt them from applying for internet-access concessions. "We don't want to provide data transmission services, what we want is to provide internet access," Ostrowski said. "But the ministry understands both services as one."
Cable operators said that the ministry license was too expensive for companies that have only 5,000-6,000 subscribers. "We'll only survive if we provide additional services for our subscribers such as internet access," Ostrowski said. "But who can afford to pay o20,000 for the license?"
According to the ministry's Sypniewski, it won't be possible to consider internet access and data transmission separately. "I know and understand that they (local cable operators) would prefer to provide internet access without applying for the license," Sypniewski said. "But we want everybody (small and big operators) to be satisfied."
PTK's Muras said it's obvious that local operators prefer access to the "regular-speed" internet. "We will have high-speed internet compatible lines, but small operators will have problems with that," he said. "At the time when cable TV was developing in Poland not everybody constructed modern lines, most networks need serious investments to be updated to world standards."
Roseanne Gerin
contributed to this report
