Wireless local loop may already be saturated market
Yet the market is so far unsure just how this spectrum would be best used, and even unclear about whether there is any bankable demand for the potential services available with the new spectrum.
Recently, E-Internet, Polska Telefonia Cyfrowa (PTC), the Research and Academic Computer Network (NASK) and Innova Capital placed bids for the tender for what is called wireless local loop (WLL) that enables remote areas, such as in the country's technologically under-served rural areas, to hook up with fixed-line phones.
"There's not a very high number of potential customers here," says Bob Creamer, analyst at CDM Pekao, on the potential in targeting rural areas to augment revenue streams. "It's hard to see what demand will come from it."
Creamer and analyst colleagues point to the overall high competition in fixed and mobile telecoms in the country as the main impetus behind the Office of Telecommunication and Post Regulation's (URTiP) plans behind launching new tenders and operators' at-least-initial interest in whatever spectrum tenders arise.
"An operator is not going to let a competitor pick up a new spectrum license without having it as well," explains Creamer, saying that there is a reasonable possibility that the potential bidders do not yet know what they will do with the new spectrum, but - should the price be right - they will buy a license to keep step with competitors. "You don't want to see your competitor have a spectrum you don't, even if you don't know what to use it for," he notes.
The parties interested in the tender either declined to comment or were unavailable at press time. However, a source at URTiP said that the WLL licenses are specifically targeted to reach rural areas with at least the basic telecom services big cities have enjoyed for years.
But Creamer points out that TPSA, the clear leader in the fixed-line segment, has recently been deploying WLL access, leaving few opportunities for others to build a viable business model around the new spectrum. However, this does not rule out that acquiring a license, again at the right price, would effectively augment revenue streams, he says.
Besides, the market develops very quickly. That which today seems like a small possibility could yield high gains in the future. "You don't know what the market's going to look like in six months," he warns.
Many market watchers believe that any attempts to widen the breadth of fixed-line penetration are a plus, because, they say, the market is under-penetrated. But that is a matter of debate. The percentage of households with fixed-line access in Poland might be lower than in what is considered to be its more technologically advanced neighbor, the Czech Republic. But when the percentage is computed per person the differences are marginal, owing to more occupants per house, Creamer points out.
Still, putting all those considerations together, the tender for WLL has already become more popular than the planned tender for GSM services, which would have allowed a fourth GSM operator to emerge. The GSM tender, like the WLL tender, has been geared toward prying open the telecoms market to new competitors.
But few interested parties have raised their hand to try to enter the three-strong mobile market, in which PTC, the operators of Era, Polkomtel, the operator of Plus GSM, and Centertel, the operator of Idea, hold almost equal market share. For the time being, URTiP has put the GSM/UMTS on hold, although some members of the press have speculated on Sweden's Tele2 being the leading contender for the license.
Similarly, with such a small potential for WLL, it might make little sense to pursue licenses.
But, as Creamer points out, that could all change soon. New technologies and business models could make all the difference in the future.
Recently, E-Internet, Polska Telefonia Cyfrowa (PTC), the Research and Academic Computer Network (NASK) and Innova Capital placed bids for the tender for what is called wireless local loop (WLL) that enables remote areas, such as in the country's technologically under-served rural areas, to hook up with fixed-line phones.
"There's not a very high number of potential customers here," says Bob Creamer, analyst at CDM Pekao, on the potential in targeting rural areas to augment revenue streams. "It's hard to see what demand will come from it."
Creamer and analyst colleagues point to the overall high competition in fixed and mobile telecoms in the country as the main impetus behind the Office of Telecommunication and Post Regulation's (URTiP) plans behind launching new tenders and operators' at-least-initial interest in whatever spectrum tenders arise.
"An operator is not going to let a competitor pick up a new spectrum license without having it as well," explains Creamer, saying that there is a reasonable possibility that the potential bidders do not yet know what they will do with the new spectrum, but - should the price be right - they will buy a license to keep step with competitors. "You don't want to see your competitor have a spectrum you don't, even if you don't know what to use it for," he notes.
The parties interested in the tender either declined to comment or were unavailable at press time. However, a source at URTiP said that the WLL licenses are specifically targeted to reach rural areas with at least the basic telecom services big cities have enjoyed for years.
But Creamer points out that TPSA, the clear leader in the fixed-line segment, has recently been deploying WLL access, leaving few opportunities for others to build a viable business model around the new spectrum. However, this does not rule out that acquiring a license, again at the right price, would effectively augment revenue streams, he says.
Besides, the market develops very quickly. That which today seems like a small possibility could yield high gains in the future. "You don't know what the market's going to look like in six months," he warns.
Many market watchers believe that any attempts to widen the breadth of fixed-line penetration are a plus, because, they say, the market is under-penetrated. But that is a matter of debate. The percentage of households with fixed-line access in Poland might be lower than in what is considered to be its more technologically advanced neighbor, the Czech Republic. But when the percentage is computed per person the differences are marginal, owing to more occupants per house, Creamer points out.
Still, putting all those considerations together, the tender for WLL has already become more popular than the planned tender for GSM services, which would have allowed a fourth GSM operator to emerge. The GSM tender, like the WLL tender, has been geared toward prying open the telecoms market to new competitors.
But few interested parties have raised their hand to try to enter the three-strong mobile market, in which PTC, the operators of Era, Polkomtel, the operator of Plus GSM, and Centertel, the operator of Idea, hold almost equal market share. For the time being, URTiP has put the GSM/UMTS on hold, although some members of the press have speculated on Sweden's Tele2 being the leading contender for the license.
Similarly, with such a small potential for WLL, it might make little sense to pursue licenses.
But, as Creamer points out, that could all change soon. New technologies and business models could make all the difference in the future.
