Telecom Eye

The share and significance of public sector expenditures on telecommunications projects has been continuously growing. Regretfully however, public expenditures still focus on separate local initiatives rather than on state-wide, integrated tele-IT projects, or on the development of an e-society.

As a consequence, the investment outlays borne on the development of tele-IT infrastructure are minuscule in relation to demand, and so a technological gap between Poland and the rest of Europe continues to grow. Infrastructure development could be accelerated however, if certain obstacles were removed.

Formal barriers

The Sejm is currently working on amending the Act on Public Procurement Law (PPL). Regretfully, the scope and extent of the suggested improvements is not significant enough to make a considerable change and speed up the process of completing a project. If the legislator has managed to establish special procedures for granting public procurement and developing an investment, such as in the case of ventures related to the Euro 2012 soccer championships, why not consider regulating telecom investments in a similar way?

Simplifying procedures is an important issue and one not related to PPL alone. Long-term, state-wide telecommunications projects suffer from complex formal and legal requirements related to the acquisition of building permits, as well as to the procedure of allocating and paying for the frequency lease. The application procedure for frequency allocation takes as much as six months to finalize and, in some cases, it may last anything between 11 and 99 months!

Financial barriers

Investments in developing infrastructure require extensive financing. Usually, operators are unable to bear such costs on their own. In addition, obtaining loans as financial back-ups can be a real challenge. No preferential treatment or loan incentives are available in this area and banks remain particularly cautious in this regard.

In this situation, EU grants become the last resort for enterprises. Such grants, however, are burdened with complicated procedures, serious delays in preparing program documentation or organizing application contests, and insufficient budgets combined with a lack of clearly established priorities for telecommunications projects.

Moreover, the Polish "Innovative Economy" Operational Programme by itself does not promote large infrastructure investments or the development of up-and-coming sectors, such as telecommunications. Instead, it focuses on supporting traditional branches of the economy.

Agnieszka Szwaj is marketing manager at Crowley Data Poland