Strong words on telecom deregulation benefit TPSA
The Treasury Ministry's announcement last week that it would move toward fully liberalizing Poland's telecom market by 2003 was a direct attempt to ease the nerves of companies that have bid for a 25-35% stake in telephone giant Telekomunikacja Polska (TPSA), analysts said last week.
Analysts also said the government's plan to award at least three new mobile licenses after Jan. 1, 2001 cleared some of the haze surrounding that industry's future.
"By now the government has been asked by (bidders France Telecom and Telecom Italia) to clarify its position before they spend billions on investing in TPSA," said Bob Creamer, a telecom analyst at Raiffeisen Capital & Investment Polska. "If you are the government and are selling off TPSA, you'll get a better price if you make clear what the regulations will be over the next five years."
The government also rang the starting bell for future bids for mobile licenses, said Rafal Gebicki, head of research at Raiffeisen Capital & Investment Polska. The three licenses the government plans to issue will work with Universal Mobile Telecommunications System (UMTS), the "third generation of mobile phones." UMTS follows the first generation of analog phones and the second generation of GSM service, the standard digital mobile phone operating system used in Europe.
UMTS technology is a step beyond currently used digital technology in that it allows very high-speed data transmission for both voice telephony and internet access on special handsets.
One of the UMTS licenses would be issued to TPSA for PTK Centertel, its mobile subsidiary, a move that boosts Centertel's standing in the eyes of TPSA's prospective bidders, one analyst said.
"The announcement from the ministry also gives (Centertel) a competitive position before the privatization of TPSA because Centertel (could) operate all three mobile systems (with the UMTS license)," said Gebicki.
Some local mobile operators responded unenthusiastically to the announcement and would not speculate on why the Treasury Ministry and not the Communications Ministry, which regulates the telecom market made the announcement about the government's UMTS license plans.
Ryszard Woronowicz, deputy press officer at Polkomtel (Plus GSM), said he didn't know why the government made the announcement and referred questions to Leszek Kaminski, Polkomtel's spokesman, who was on holiday until Monday.
Bogdan Markiewicz, deputy press officer at Polska Telefonia Cyfrowa (Era GSM), said he could not comment on the issue because no new tender was announced. However, he did suggest that the Treasury Ministry made the announcement because of the privatization of TPSA.
"The price of TPSA depends on the license fee for Centertel's Idea (the company's mobile service)," he said. "When Centertel has an agreement with the Polish government, [its] value will grow."
Jaroslaw Kalinowski, spokesman for Centertel, did not return phone messages.
Neither Marek Rusin nor Jaroslaw Okragly, deputy ministers in the Communications Ministry, were available for comment. Beata Jarosz, spokeswoman for the Treasury Ministry, was also unavailable.
The government's announcement may be jumping the gun on the next wave of mobile technology, since UMTS is unlikely to be operational in Europe until January 2002, analysts said. The service is now being tested in Japan, where it will be in operation by 2001, and in the U.K., where there is a current auction for five UMTS licenses, said Hans Sanders, a mobile phone market analyst at Salomon Smith Barney in London.
The cost of the service will also be a major factor, analysts said. No one is sure exactly how much companies will have to spend building out the new service, or more importantly, getting sophisticated phones and receivers into consumers' hands.
According to Woronowicz, Polkomtel the only mobile operator that provides Wireless Application Protocol (WAP), a service similar to UMTS, but not as technologically advanced has only 100-200 subscribers for its service. He added that the company has no plans to develop UMTS technology because the government hasn't announced an actual tender for the licenses.
