TPSA Internet launch irks private firms
"We're pretty scared of what TPSA could do," said Piotr Jakubczak of QDnet, a Warsaw-based Internet provider. Jakubczak said TPSA would drive some competitors from the booming market if it decides to dump prices, or even offer free service to attract customers.
"As the monopoly that controls all the phone lines, they could do practically anything," he said.
State-owned TPSA, one of Poland's most profitable companies, with $317 million in 1994 net profits, intends to blanket the market.
"Our goal is to win," said Jaroslaw Kepkowicz, vice director of TPSA's data transmission center. "Obviously the best thing that can happen is that we will cover 100% of the market."
Industry insiders are reticent to assign a market value for Internet connection because of the current upheaval in pricing and anticipated three- to fourfold consumer growth expected this year.
At the beginning of the year, 26,000 computers were hooked to the Internet. Based on a range of retail prices, the market could be worth $30 million to $75 million by year's end.
Internet provider rates for individual users typically cost $25-$35 per month for basic service with unlimited e-mail access. For a full-service hookup with the range of information services a business might use, the monthly cost could run $60 to $100. Internet providers expect TPSA prices to be significantly lower.
TPSA will not release its pricing information until NASK (Scientific and Academic Computer Network) sets its new prices, Kepkowicz said.
NASK, a state financed non-profit firm, currently provides all Internet connections in Poland. NASK prices are in limbo after an outcry against a proposed 1,400% price increase at the beginning of the year. The quarterly access price NASK charges private providers to run their systems hovers at zl. 14,400 ($6,000), a 400% increase over last year's prices.
The TPSA marketing plan will target business users with what Kepkowicz called one of the most modern networks in Europe, capable of transmitting voice and video. TPSA will provide "cheap service" to individuals who use mainly e-mail, he said.
Despite the size and carrying capacity of TPSA's fiber-optic system, the phone company does not yet have the expertise to provide business with information and accounting services needed for business use of the Internet, Kepkowicz said. For the first year at least, Kepkowicz said, other firms will have to integrate a company's computer system with business applications such as online stock services and banking applications.
This could be a role for NASK, said Director Tomasz Hofmokl.
"No one in Poland can exist without TPSA and their phone lines. Therefore, we are condemned to collaboration," Hofmokl said.
Hofmokl said NASK might step in and provide "one-stop shopping" with TPSA. NASK would provide the information services needed by business customers, while TPSA would supply worldwide Internet access, he said.
Another possibility is that NASK, using leased lines from TPSA, will provide service in towns TPSA has no plans to connect to the Internet.
NASK and TPSA already have some long-standing business agreements concerning phone lines. Hofmokl added that there was no way to determine the exact form of collaboration.
Like the publicly-owned NASK, private firms will find themselves facing a transformed market with TPSA as a competitor.
TPSA has enough money to "kill or disorganize the market completely," said Rafal Plutecki, president of the private firm Internet Technologies.
Kepkowicz denies that TPSA will use monopolistic practices like price dumps or its phone lines to try to run other firms out of the market.
"As a public operator we have a responsibility to connect to anyone who wishes, including Internet providers," Kepkowicz said. "There is not a monopoly. (Private firms) may buy their own satellite links. They may also continue to buy access from NASK."
Private firms indeed have begun to buy their own links. Internet Technologies and Peryt purchased satellite links in early February.
Small firms can beat TPSA through dedication to service and quality, said Plutecki of Internet Technologies.
"Private companies take care of their customer and have no bureaucracy," he said. "TPSA is a very big giant with lousy customer service and no record of quality. They are entering a new business without mastering the one they are already in."
While Jakubczak of QDnet is concerned about the TPSA threat, he agrees that quality is the survival strategy.
"Do you like the way your phone connection sounds? Why would TPSA do better with Internet?"
Kepkovicz said that as TPSA's Internet expertise grows, the company will offer a wider range of services and expand the coverage of its digital network to 28 cities by the end of 1996. Currently 13 cities are connected.
"As the monopoly that controls all the phone lines, they could do practically anything," he said.
State-owned TPSA, one of Poland's most profitable companies, with $317 million in 1994 net profits, intends to blanket the market.
"Our goal is to win," said Jaroslaw Kepkowicz, vice director of TPSA's data transmission center. "Obviously the best thing that can happen is that we will cover 100% of the market."
Industry insiders are reticent to assign a market value for Internet connection because of the current upheaval in pricing and anticipated three- to fourfold consumer growth expected this year.
At the beginning of the year, 26,000 computers were hooked to the Internet. Based on a range of retail prices, the market could be worth $30 million to $75 million by year's end.
Internet provider rates for individual users typically cost $25-$35 per month for basic service with unlimited e-mail access. For a full-service hookup with the range of information services a business might use, the monthly cost could run $60 to $100. Internet providers expect TPSA prices to be significantly lower.
TPSA will not release its pricing information until NASK (Scientific and Academic Computer Network) sets its new prices, Kepkowicz said.
NASK, a state financed non-profit firm, currently provides all Internet connections in Poland. NASK prices are in limbo after an outcry against a proposed 1,400% price increase at the beginning of the year. The quarterly access price NASK charges private providers to run their systems hovers at zl. 14,400 ($6,000), a 400% increase over last year's prices.
The TPSA marketing plan will target business users with what Kepkowicz called one of the most modern networks in Europe, capable of transmitting voice and video. TPSA will provide "cheap service" to individuals who use mainly e-mail, he said.
Despite the size and carrying capacity of TPSA's fiber-optic system, the phone company does not yet have the expertise to provide business with information and accounting services needed for business use of the Internet, Kepkowicz said. For the first year at least, Kepkowicz said, other firms will have to integrate a company's computer system with business applications such as online stock services and banking applications.
This could be a role for NASK, said Director Tomasz Hofmokl.
"No one in Poland can exist without TPSA and their phone lines. Therefore, we are condemned to collaboration," Hofmokl said.
Hofmokl said NASK might step in and provide "one-stop shopping" with TPSA. NASK would provide the information services needed by business customers, while TPSA would supply worldwide Internet access, he said.
Another possibility is that NASK, using leased lines from TPSA, will provide service in towns TPSA has no plans to connect to the Internet.
NASK and TPSA already have some long-standing business agreements concerning phone lines. Hofmokl added that there was no way to determine the exact form of collaboration.
Like the publicly-owned NASK, private firms will find themselves facing a transformed market with TPSA as a competitor.
TPSA has enough money to "kill or disorganize the market completely," said Rafal Plutecki, president of the private firm Internet Technologies.
Kepkowicz denies that TPSA will use monopolistic practices like price dumps or its phone lines to try to run other firms out of the market.
"As a public operator we have a responsibility to connect to anyone who wishes, including Internet providers," Kepkowicz said. "There is not a monopoly. (Private firms) may buy their own satellite links. They may also continue to buy access from NASK."
Private firms indeed have begun to buy their own links. Internet Technologies and Peryt purchased satellite links in early February.
Small firms can beat TPSA through dedication to service and quality, said Plutecki of Internet Technologies.
"Private companies take care of their customer and have no bureaucracy," he said. "TPSA is a very big giant with lousy customer service and no record of quality. They are entering a new business without mastering the one they are already in."
While Jakubczak of QDnet is concerned about the TPSA threat, he agrees that quality is the survival strategy.
"Do you like the way your phone connection sounds? Why would TPSA do better with Internet?"
Kepkovicz said that as TPSA's Internet expertise grows, the company will offer a wider range of services and expand the coverage of its digital network to 28 cities by the end of 1996. Currently 13 cities are connected.
