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New Entrants Heating up Competition in Poland's Mobile Market
Simon Bilo, Research Analyst, Communications, IDC CEMA
Two new entrants has brought to six the total number of providers that will be fighting for market share on the Polish mobile market – making one of Central and Eastern Europe's most competitive markets ever more so. SITUATION OVERVIEW On 21 May 2007, the Polish regulatory body – the Office of Electronic Communications or UKE – announced a tender for two separate nationwide frequency bundles designated for public telecommunications networks. Each of these two 15-year licenses represents a set of 49 radio duplex channels (1,710–1,730MHz and 1,805–1,825MHz respectively). Applicants were allowed to propose a maximum of two offers, while both would be considered independently by the UKE. Two decisive criteria of the tender were "assurance of conditions for competition" (200 potential points out of the 340 total) and monetary "amount declared by Tenderer" (110 potential). Eight bids were submitted by the deadline, six of these were formally valid: Polska Telefonia Komórkowa Centertel, Polkomtel, CenterNet (two bids), Mobyland (renamed from Tolpis), and Inquam Broadband. The related spectrum had already twice been tendered, but both previous attempts were unsuccessful. The results of this third tender were announced on 2 October 2007: CenterNet submitted the two most favorable bids and was offered both licenses in question, costing $89 million and $46.5 million, respectively. CenterNet opted to take only the cheaper license, meaning the number three bidder (Mobyland with a bid of $37 million) got the second, more expensive one. CenterNet might have been interested in only one license from the very beginning. Indeed, the operator submitted two different bid prices to minimize the possibility of not obtaining a license on the one hand and not overpaying on the other. Consequently, on 30 November 2007, the UKE booked frequencies for CenterNet and Mobyland, 1710 – 1730 MHz and 1805 – 1825 MHz, respectively. CenterNet S.A. is controlled by Polish billionaire Romam Karkosik, who has a stake in the UK MVNO project Extreme. The company plans to launch the network in mid-2008. As of then, domestic roaming contracts will be used to provide signal until CenterNet's own network offers sufficient availability. Network investments should amount from $254 million to $363 million. CenterNet intends to offer two brands: "Extreme Mobile" targeted at young professionals in urban areas; and an as-yet un-named brand to address low-income customers. The company aims to have 200,000 customers in its first year on the market and 2.5 million in five years. The second winner, Mobyland, is related to Italian telecoms firm Eutelia, although the latter will not be the only stakeholder in the project. It is estimated that Mobyland will invest from $342.7 million to $411.2 million over the coming five years. The service should be launched within twelve months. FUTURE OUTLOOK The Polish mobile market, already one of the most competitive in the CEE region, is becoming even more so: six operators with their own infrastructure and a series of existing or forthcoming MVNOs (e.g., AVON or mBANK) are all vying for share. Offering traditional services will not be sufficient for success on the Polish mobile market: operators will need to differentiate their product or service. Some operators have already understood this, such as mBank, which links telephone service with its banking operations, and CenterNet that focuses on selected groups of customers. -- -- -- -- -- -- -- -- -- -- -- -- IDC offers data-backed strategic advice for service providers operating in CEE and MEA through its Central and Eastern European and Middle East and African Carrier Transformation Strategies series and through customized research and consulting engagements. For more information, please contact Tatiana Hinova (thinova@idc.com; +420 221 423 140) or John Gole (jgole@idc.com; +420 221 423 140.) |
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