Warsaw wants to put Farmer Pawlak online
With its eye on a December 2003 target date for European Union (EU) entry, the Communications Ministry estimates that Poland will spend zl. 7 billion ($1.7 billion) over the next four years not only connecting rural Poland with basic telephone service, but also linking villages to the information highway.
"(We have to) prepare Polish agriculture and rural areas from a technical point of view to enter the EU," said Adam Pytlik, Director of the Office of the Government's Plenipotentiary for Rural Telecommunications Development.
While Poland's cities predictably absorb most of the current wave of telecommunications investment, in information technology terms rural Poland remains largely a world apart. Only 2.2 million rural homes and businesses have direct stationary telephone hookups, industry and ministry sources said. That means that 14 out of every 100 rural inhabitants have a telephone line, well below the national average of around 28 per 100 inhabitants.
Villages in cyberspace
The government's ambitious zl. 7 billion plan envisions more than doubling telephone density in rural areas to between 30-40 telephones per 100 inhabitants by 2004. That would mean that by 2004, roughly 5 million people in rural areas would be hooked up to a stationary telephone network, according to the ministry. The intent is to create a modern telecommunications infrastructure that would get farmers and rural businesses on the internet an achievement that could relegate the stereotype of semi-literate Polish villagers to the realm of social mythology.
But the plan to double the availability of telephone service is not only a crusade about closing out the pre-IT Dark Ages or even merely about raising the standard of living for the short term. With telephone density half the national average, the Polish countryside is cut off from the most modern and dynamic parts of the national economy. The government sees the lack of all types of infrastructure, and telecommunication services in particular, as a major obstacle to the economic development of, and investment in, rural Poland.
"If we don't have infrastructure development, no social and economic development will happen in the villages," Pytlik said. "Investors foreign or Polish can't function without access to telephones, without the ability to transmit data and without access to the internet."
Hooking investors
Unfortunately, the private sector cannot be counted on to drive things forward on the strength of business prospects. The countryside demands far higher initial investments per capita but offers significantly lower spending power than cities. Telecom providers thus see much slower returns in rural areas. Faced with such an easy choice, they understandably put their money into the cities.
"It's much more difficult to (provide telephone service) in rural areas than in a class-A business tower in a city," said Jarek Konczak from Telekomunikacja Polska's (TPSA) press office. "It's no secret that the best profits come from the business tower in the city." In fact, the Communications Ministry estimates the cost of installing one telephone line in a rural area at zl. 3500-4,500, about 40% above the average cost in an urban area. The government is now working out a plan to entice investment to rural areas.
The ministry anticipates launching two programs at the beginning of 2001 which it hopes will speed up investment in agricultural areas. The first follows a government decree passed last September, and requires TPSA and other long-distance telecom companies to pay local phone companies a higher fee for connections to rural telephones. The government hopes this fee, as yet undetermined, will somewhat compensate for the slower return on rural operators' investments.
The second program involves stimulating private-public partnerships in rural areas by building on Poland's tradition of local telephone committees through which businesses and residents raised funds for infrastructure projects to stimulate TPSA's own investment. Theoretically, local banks, businesses and individuals would form local companies which would make infrastructure investments in cooperation with a local telephone service provider. The government is now ironing out details of the program. Beyond this, SAPARD, the EU's rural development program, includes about zl. 20,000 for rural telecommunications in Poland.
Entrepreneurs to the rescue
After decades of rural Poles sardonically anticipating telephone service "next month if I do it myself," tangible progress has finally materialized in the last year or so. In 1997, 9 out of every 100 rural inhabitants had a home or business telephone line. That number increased to 11 in 1998. Chalk it up to TPSA finally facing the threat of competitive pressure, embryonic though it may be.
Even the Communications Ministry admitted that the endlessly belated and still incomplete breakup of the communist monopoly, and the entrance of private operators, have been the main reasons for the improvement. "Without a doubt, the increase of competition on the market led to this change," Pytlik said.
Last year, private operators installed 154,000 telephone lines in rural areas, 60% more than the year before. For its part, TPSA installed 411,000 telephone lines in the countryside, an increase of 30% over 1998.
The government has calculated that the rural telecom investment it wants to make over the next four years will cost zl. 7 billion. Part of this would go to bringing the information highway to the villages. It would mean equipping rural schools and businesses with ISDN lines and setting up village computer centers open to residents who want to surf the internet. Following the "tele-cottages" model in Western Europe and Hungary, the government hopes to set up three pilot village computer centers by the beginning of 2001.
"Beyond the goal of universal access to services, development of the information systems to people in rural areas is the number one priority," Pytlik said.
