Talking big numbers
By almost any measure 2004 was another great year for the mobile phone operators. They continued to gain clients, their profits increased in comparison to the previous year, and it looks like the trend will continue over the next few years, since the market penetration index in Poland (estimated at around 60 percent) is still lower than the EU average.
Profitable connections
Polska Telefonia Cyfrowa (the operator of Era and Heyah) continued to hold on to the top spot in 2004. At the end of the third quarter of last year, it had nearly 8.1 million subscribers, giving it a 38.1 percent market share in that area. Centertel (Idea's operator) followed with 6.6 million users (31.2 percent), and Polkomtel (the operator of Plus) came third with 6.5 million subscribers, which was approximately 30.7 percent of the market. The number of Centertel subscribers increased by 893,000 since January 2004, while Polkomtel gained about 1 million new customers, and PTC increased its client ranks by an impressive 1.8 million over the same period.
As far as sales are concerned, in Q1-Q3 of 2004 PTC registered an income of zł.4.763 billion with the profit of zł.832.4 million. This exceeded the numbers achieved in the same period of 2003 (zł.4.166 billion and zł.297.4 million, respectively). The other two operators also improved on their financial results of previous years - Polkomtel saw its sales go up in Q1-Q3 of 2004 in comparison to the same period of 2003 (zł.4.241 billion and zł.665.6 million to zł.3.842billion and zł.543.9 million) and Centertel's zł.4.143 billion income and zł.450 million profit in the Q1-Q3 also exceeded the previous year's results.
According to Centertel's market estimates, in Q3 of 2004, 85 percent of mobile activity on the market was pre-paid.
Subscription skirmish
The ARPU (average revenue per unit) for each operator clearly confirms that the number of pre-paid users exceeds that of post-paid subscribers. PTC's ARPU, as of October 2004, was zł.68.6 (zł.129 for post-paid and zł.27.1 for pre-paid). Polkomtel's revenue received from an average user was zł.75.3 (zł.132.2 for post-paid and zł.23.5 for pre-paid user). As figures published by Centertel show, the company is the leader of the post-paid segment on the mobile phone market. Contrary to its competitors, Centertel's ARPU rose from zł.70.9 in 2003 to zł.72.2 after three quarters of 2004. Each operator's ARPU has been steadily dropping in the last years, indicating a tendency of choosing pre-paid rather than post-paid subscriptions.
What's in a name?
Out of PTC's more than 8 million clients only 2.9 million were post-paid users. The remaining 5.1 million used mobiles with pre-paid cards. The ratio has further increased in 2004 following the introduction by PTC of Heyah. Directed at young people and offering the cheapest SMS services on the market, the new network acquired around 2 million users in the first six months of its existence. As the brand's spokesperson Agata Borowska said: "Heyah has significantly lowered the prices on the market and introduced new standards such as second count, forcing the competition to adapt to the new trends."
There has been much talk lately about possible brand name changes of the Polish mobile operators. Tomasz Kulisiewicz, an independent IT and Telecom expert, says: "Such a decision by one of the foreign shareholders to change the brand name could come at any time." He adds that Orange (the owner of Centertel) is in the most comfortable position to initiate the process, and "then the two other operators would have to react within a week."
Unite and fight
Kulisiewicz thinks that Vodafone (holding only 19 percent of Polkomtel's shares) is least likely to lead the name change. Despite the many advantages of such a move, Kulisiewicz, says: "This would mean a waste of all the money invested in the last few years by the operators into creating a well-known and widely-recognized, but local, brands."
It is possible that soon there could be a fourth mobile phone operator on the market. The tender for UMTS and GSM 1800 frequencies, organized by the Office for Telecommunications and Post Regulations (URTiP) could result in a new company entering the market even as early as this year. However, the current operator trio is united in its opposition to this prospect. PTC, Polkomtel and Centertel have paid EUR 650 (zł.2,579) million each for the right to develop the infrastructure, and are enraged by the fact that the minimal price in the current tender is only EUR 0.5 (zł.1.98) million.
Tender tussle
Another problem in the tender is the so-called local roaming, which would allow the possible fourth operator to use the current operator's infrastructure until it develops its own. This obviously faces stiff opposition from the current mobile service providers, who spent millions on creating the GSM infrastructure in Poland. They are accusing the authorities of creating favorable conditions for the possible fourth operator and are threatening to appeal to Polish and European courts if forced to accept local roaming.
Customers win
For these reasons Kulisiewicz is very skeptical when asked about the possibility of the new operator entering the mobile market this year. With regards to the current operators' idea that the new provider pay a similar entrance fee to the one they were forced to pay, he says: "I cannot see anybody in Europe, even Hutchinson or Tele2, willing to pay such an amount of money."
In order to prove that a new mobile service provider is not needed, the existing operators continued to lower prices for their services. And while the battle rages between the big brands, customers are benefiting from multiple promotions, free minutes and lower prices.
Profitable connections
Polska Telefonia Cyfrowa (the operator of Era and Heyah) continued to hold on to the top spot in 2004. At the end of the third quarter of last year, it had nearly 8.1 million subscribers, giving it a 38.1 percent market share in that area. Centertel (Idea's operator) followed with 6.6 million users (31.2 percent), and Polkomtel (the operator of Plus) came third with 6.5 million subscribers, which was approximately 30.7 percent of the market. The number of Centertel subscribers increased by 893,000 since January 2004, while Polkomtel gained about 1 million new customers, and PTC increased its client ranks by an impressive 1.8 million over the same period.
As far as sales are concerned, in Q1-Q3 of 2004 PTC registered an income of zł.4.763 billion with the profit of zł.832.4 million. This exceeded the numbers achieved in the same period of 2003 (zł.4.166 billion and zł.297.4 million, respectively). The other two operators also improved on their financial results of previous years - Polkomtel saw its sales go up in Q1-Q3 of 2004 in comparison to the same period of 2003 (zł.4.241 billion and zł.665.6 million to zł.3.842billion and zł.543.9 million) and Centertel's zł.4.143 billion income and zł.450 million profit in the Q1-Q3 also exceeded the previous year's results.
According to Centertel's market estimates, in Q3 of 2004, 85 percent of mobile activity on the market was pre-paid.
Subscription skirmish
The ARPU (average revenue per unit) for each operator clearly confirms that the number of pre-paid users exceeds that of post-paid subscribers. PTC's ARPU, as of October 2004, was zł.68.6 (zł.129 for post-paid and zł.27.1 for pre-paid). Polkomtel's revenue received from an average user was zł.75.3 (zł.132.2 for post-paid and zł.23.5 for pre-paid user). As figures published by Centertel show, the company is the leader of the post-paid segment on the mobile phone market. Contrary to its competitors, Centertel's ARPU rose from zł.70.9 in 2003 to zł.72.2 after three quarters of 2004. Each operator's ARPU has been steadily dropping in the last years, indicating a tendency of choosing pre-paid rather than post-paid subscriptions.
What's in a name?
Out of PTC's more than 8 million clients only 2.9 million were post-paid users. The remaining 5.1 million used mobiles with pre-paid cards. The ratio has further increased in 2004 following the introduction by PTC of Heyah. Directed at young people and offering the cheapest SMS services on the market, the new network acquired around 2 million users in the first six months of its existence. As the brand's spokesperson Agata Borowska said: "Heyah has significantly lowered the prices on the market and introduced new standards such as second count, forcing the competition to adapt to the new trends."
There has been much talk lately about possible brand name changes of the Polish mobile operators. Tomasz Kulisiewicz, an independent IT and Telecom expert, says: "Such a decision by one of the foreign shareholders to change the brand name could come at any time." He adds that Orange (the owner of Centertel) is in the most comfortable position to initiate the process, and "then the two other operators would have to react within a week."
Unite and fight
Kulisiewicz thinks that Vodafone (holding only 19 percent of Polkomtel's shares) is least likely to lead the name change. Despite the many advantages of such a move, Kulisiewicz, says: "This would mean a waste of all the money invested in the last few years by the operators into creating a well-known and widely-recognized, but local, brands."
It is possible that soon there could be a fourth mobile phone operator on the market. The tender for UMTS and GSM 1800 frequencies, organized by the Office for Telecommunications and Post Regulations (URTiP) could result in a new company entering the market even as early as this year. However, the current operator trio is united in its opposition to this prospect. PTC, Polkomtel and Centertel have paid EUR 650 (zł.2,579) million each for the right to develop the infrastructure, and are enraged by the fact that the minimal price in the current tender is only EUR 0.5 (zł.1.98) million.
Tender tussle
Another problem in the tender is the so-called local roaming, which would allow the possible fourth operator to use the current operator's infrastructure until it develops its own. This obviously faces stiff opposition from the current mobile service providers, who spent millions on creating the GSM infrastructure in Poland. They are accusing the authorities of creating favorable conditions for the possible fourth operator and are threatening to appeal to Polish and European courts if forced to accept local roaming.
Customers win
For these reasons Kulisiewicz is very skeptical when asked about the possibility of the new operator entering the mobile market this year. With regards to the current operators' idea that the new provider pay a similar entrance fee to the one they were forced to pay, he says: "I cannot see anybody in Europe, even Hutchinson or Tele2, willing to pay such an amount of money."
In order to prove that a new mobile service provider is not needed, the existing operators continued to lower prices for their services. And while the battle rages between the big brands, customers are benefiting from multiple promotions, free minutes and lower prices.
