Suppliers, financially battered last year, optimistic for 2002

Keeping a stiff upper lip just might be the toughest task these days at Teletra Komtrans. The Poznań-based fiber-optic cable producer, selling some 90% of its finished products to domestic monopoly Telekomunikacja Polska (TPSA), is downbeat on its 2002 prospects coming off a horrific year that saw production slashed and its workforce halved to 100. "We only hope for improvement," said Marcin Czerwiński, the firm's fiber optic production manager. But other telecom equipment producers, looking at that same market with their own financial lumps from 2001, are more upbeat on short- and long-term prospects; expecting demand to be boosted by liberalization on the fixed-line market and new technologies to spur growth on the wireless side.

"We've experienced recession (in business) since mid-2001," said Bożena Zabielska, marketing director at Lublin-based Lanex. "We had been focused only on Poland but we've started to export and look harder at our target customer." Lanex, with most of its business still geared toward TPSA and local phone operators, is trying to exploit a market niche with security companies by producing devices used in video transmission based on fiber-optic solutions. But in the long term, Lanex is among several firms pinning future prosperity hopes on market reforms. Starting next year, alternative fixed-line operators will be able to offer long-distance calling services, given approval from the Telecommunications Regulatory Office (UTR) as well as interconnect agreements with TPSA. "Once independent operators are able to use TPSA's infrastructure, we see a big boost in demand for our services," Zabielska said. While sales are off some 20% year on year at Technokabel, the Warsaw-based cable producer, officials there are confident that increased exports and deeper penetration of niche markets is key for a better 2002. Unlike the bulk of its sector counterparts, Technokabel shuns TPSA's business in favor of scattered buyers in the nation's power sector, alternative-fixed line operators, construction firms and the defense industry. "We're growing exports (now 15% of production) and we hope demand in Poland will pick up this year," said Marian Germata, Technokabel president.

Meanwhile, despite last year's sluggish sales, foreign-backed equipment producers say shifts in focus for GSM (Global System for Mobile Communication) operators continue to fuel changes in product demand. "Some years ago, GSM operators struggled to be first to cover the whole of Poland with their networks," said Mariusz Kosiński, general director at Nokia Poland, which supplies handsets and various operational support to operators. "Now the battle is for the best-quality connections and wider services, which for us means new technologies in our products." Look for the next wave of mobile communications to have companies scrambling sooner rather than later, he said. "We're expecting 3G (third-generation) networks to begin here in early 2004, so that's another shift next year," Kosiński said.