TPSA hits Internet pothole, but still a market threat
TPSA had to shut down its World Wide Web (WWW) service April 24 because of technical problems, and the network isn't expected to be up and running until May 10, said Krzysztof Trzewik, director of Centrum System-w Teleinformatycznych, a division of TPSA.
The setback might provide momentary joy for competitors. But problems aside, small Internet access providers know TPSA will soon be a formidable competitor as it looks to grab a huge share of the market.
"TPSA is a threat to Internet providers," said Stanislaw Wojciechowski, president of Bankowe Centrum Informatyki in Krak-w. "Perhaps not for the time-being, but it could be soon."
He believes the key for small Internet providers is to provide information services that TPSA doesn't. Wojciechowski said Bankowe Centrum Informatyki is hoping its computer specialists will give the company an advantage over TPSA in providing services.
Still, with its national network, TPSA has a built-in advantage over other Internet providers.
First, TPSA's Internet efforts require little investment because of its existing communications infrastructure. This will allow it to price its services competitively. Second, the company can offer nationwide access to the Internet for the cost of a local, or cheap, intercity phone call. Many small providers now exist because they are just a local phone call away from customers, while competitors require a more expensive intercity call for customers to access the Internet. TPSA will eliminate this advantage.
The state-owned utility, which earned $317 million in 1994 and controls almost all of Poland's telephone lines, has expressed its hope to cover 100% of the Internet market in Poland.
Earlier this year, TPSA launched its metropolitan networks in 10 Polish cities, with plans to cover the country by the end of the year. With TPSA, most customers throughout Poland can call a local telephone number to browse the World Wide Web.
However, TPSA is unable to provide individual accounts at the moment. And users of TPSA's service will get a busy signal until the company's network is patched up in May.
Still, competitors' worries that TPSA could undercut them might be justified. Internet providers usually charge about $25 to $35 a month. This includes unlimited e-mail access. A full-service hook-up could run $60 to $100 for a range of services businesses might use.
In a sign of TPSA's price advantage, the company is now running a special offer for the start-up of its service. Customers receive WWW access for just the price of a phone call. There is no additional service charge.
To use another Internet provider, a customer must also pay for the service, not just the telephone call. TPSA has yet, however, to release a pricing structure for its service when full Internet access is available.
One solution competing Internet providers have looked at is cooperating with, instead of competing against, TPSA.
"There is hope to compete, but ... the only chance of surviving is cooperation with TPSA," said Henryk Kaminski of SPRINT in Olsztyn. The company also provides services in Gdansk, Bydgoszcz and Szczecin.
Kaminski believes TPSA has assembled a team of young, ambitious staffers who will be introducing more and more services to the market, thus intensifying competition.
Kaminski also complained that current Internet providers have done all the legwork in getting people interested in cyberspace, and TPSA will reap the benefits of their work.
Polska OnLine is one firm that is already establishing a cooperative agreement with TPSA. This will result in rate reductions for its customers effective May 1, said Anna Waniek, executive assistant.
The arrangement allows Polska OnLine clients to access the Net through TPSA's nationwide number. Clients can also access all of Polska OnLine's services, Waniek said. Clients save money because the TPSA number is considered a local call.
But another Internet provider is pleased TPSA has entered the fray. "We are very happy with this," said Paula Wsowska, marketing and sales manager for Internet Technologies.
IT hopes that TPSA's service attracts people who will browse the Internet, "see what it's about, gain knowledge and later go on to the best provider and open an account," Wsowska said. Her company might benefit as users "get a taste" of the Internet because TPSA will be unable to provide individual accounts until the end of 1996.
"It's not any sort of competition to us," Wsowska said, adding that it takes time and experience to become an Internet provider with individual accounts. "What TPSA does not have is any experience with Internet."
In addition, some Internet providers - IT, Peryt, Bankowe Centrum Informatyki, SM-Media - are bypassing TPSA with satellite links.
