Rivals prompt TPSA to cut local long-distance service rates
After the government signed, sealed and delivered three new operating licenses for domestic long-distance telephone service last Wednesday, telecom analysts said that state-owned monopolist Telekomunikacja Polska (TPSA) would immediately and drastically lower its service fees.
In light of increasing market competition, all the companies offering domestic long-distance service will likely charge 30% less than TPSA, said Pawel Zach, a senior analyst who covers the telecom industry at Citibank (Poland). But he added that TPSA intends to get a head start on its competitors by offering price reductions of 20-30% over the next few months while the three consortia awarded the new licenses are still in the early stages of setting up their services.
Zbigniew Lapinski, a regional telecom analyst at Deutsche Bank, said TPSA would lop a hefty 40% off its current tariffs for domestic long-distance calls. Krzysztof Swidrak, TPSA's spokesman, could not be reached for comment.
Besides the discounted prices, the new telecom firms will offer extra services, such as call waiting, at no additional charge, Zach said. The consortia are expected to start offering service by September or October, analysts said.
In January, former Communications Minister Maciej Srebro selected three consortia Netia 1, National Grid Koleje Telekomunikacja (NGKT) and Niezalezny Operator Miedzystrefowy (NOM) as winners of the licenses, making them the first independent operators in the domestic long-distance market. Each company paid o23 million for its license.
Netia 1 is a consortium of private fixed-line telecom operator Netia Holdings and its six subsidiaries along with BRE Bank, Powszechna Kasa Oszczednosci Bank Polski (PKO BP), and electric utility Stoen. NGKT is a joint venture between British transmissions systems operator National Grid Group, Polish State Railways (PKP) and PT Centrala, a subsidiary of Polish Telecom Operators (PTO). NOM's consortium includes Polski Koncern Naftowy (PKN) and Tel-Energo, a subsidiary of Polish Power Grid (PSE).
Analysts said the firms would not have any problems obtaining interconnection agreements from TPSA. The companies will have to hook into TPSA's network and switching systems to connect their callers for domestic long-distance service.
"The negotiations with TPSA will be tough, but the company will sign the (agreements)," Zach said. If the interconnection agreements are not signed within a three-month period, the Communications Ministry will step in to arbitrate the matter, he said.
During the past few years, TPSA's stronghold on the telecom market has slowly been pried open as the company has lost customers for local calling service to independent operators. These operators have been awarded licenses to set up their operations in the lucrative Warsaw area and in several voivodships.
Communications Minister Tomasz Szyszko announced last Wednesday that he would sign and issue a license to independent telecom company Telefonia Lokalna for local calling operations in the regions surrounding Warsaw. Meanwhile, Netia, the nation's largest independent operator, is expected to receive its license for local calling service in Warsaw by the end of this month.
