This report discusses developments in the telecom sector in Poland through 2013, with a market overview and corporate news for firms including TPSA, PTK Centertel, T-Mobile, Orange Poland, and Cyfrowy Polsat, among others.

The revenues from telecom activities in Poland dropped by approximately 2.4% y/y to PLN 41.7bn (EUR 10bn) in 2012, thus sliding into the negative area after the moderate 1.1% y/y advance in 2011. The decline was driven by the double-digit slump of fixed-telephony revenues, as well as by the first historical annual decrease of revenues in the mobile telephony segment, in the context of the overall economic slowdown.

The performance of the Polish telecom market follows the same overall downward tendency at EU level, where operators’ revenues are also negatively affected by tightening competition and regulatory and macroeconomic pressures. Furthermore, Polish operators also follow an international trend toward combining energy and telecommunications services. In order to alleviate the shrinking revenues from traditional activities, operators have been increasingly diversifying their offer, including services not connected to their core business, such as selling electricity. The Polish telecom market value is projected to maintain a downward path in the short run. On the upside, market players expect the price war to temper gradually, as customers have become less price-sensitive. In 2013, however, the operators’ profit margins will continue to be affected by lowering prices for mobile and landline services.

Key Points:

• In corporate news, Poland’s fixed-line telecom incumbent Telekomunikacja Polska SA (TPSA) remained the main player in 2012, with 57.4% share of the market in terms of subscribers and 55.7% share in terms of revenues.

• In the mobile telephony segment, PTK Centertel led the market in 2012 in terms of revenues, but T-Mobile climbed to first place in terms of number of users.

• Orange Poland has launched its first LTE transmitters in Warsaw, and to start full commercial services in 2014.

• Polsat TV, a division of TV broadcaster and DTH operator Cyfrowy Polsat, completed the acquisition of broadcaster of TV4 and TV6 channels Polskie Media from Karswell Ltd and Sensor Overseas Ltd.

• According to EC data, the EU telecom sector revenues dropped by 1.1% y/y in 2012, driven by shrinking fixed and mobile service revenues.

• While Poland’s mobile telephony segment was negatively affected by tightening competition and further MTR cuts, the internet access market continued to grow at dynamic pace, surging by 10.7% y/y in 2012.