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In 2018, total revenues of mobile operators amounted to PLN 25.8bn, which means a 3% year-on-year decrease. Currently, the mobile segment accounts for approximately 58% of the value of the telecommunications market in Poland. In the six-year perspective, mobile telephony revenues will be even more visible in the market structure due to higher prices of mobile services.
Mobile telephony market worth PLN 25.8bn
In 2018, total revenues of mobile operators recorded a nearly 3% decrease to PLN 25.8bn. This decrease is a result of further reduction of telecommunications services, application of the IFRS 15 standard in operators’ financial reporting or a clear decrease in the dynamics of growth in equipment sales revenues (due to the saturation of the customer base with installment offers and the implementation of the strategy consisting in a radical cut in subsidies for telephones).
According to PMR estimates, last year’s revenues of mobile operators less revenues from the distribution of equipment amounted to PLN 19.6bn. This represents a decrease of almost 5% year-on-year. The market lost even more at the level of retail-only revenues. Last year, the value of the retail mobile telephony market amounted to PLN 14.4bn, losing nearly 7% year- on-year.
Market in the face of positive economic situation due to higher prices of services
In the following years, the mobile telephony market, on the other hand, stands in the perspective of a positive economic situation. The value of the market will be significantly affected by the increase in the prices of services. In the last 12 months, the most important event on the mobile telephony market in Poland was the introduction of higher service prices by three out of four MNOs, with simultaneous increase in data transmission packages. This is a huge change in the market compared to previous years, when a fierce competitive struggle led to increasingly lower service prices. In mid-2019, Orange, P4 and T-Mobile (for selected mobile plans) decided to take such a step. In September 2019, T-Mobile once again changed the price list of its mobile services – making a second price increase within two months. PMR estimates the average price increase of all operators’ offers at approx. 17%.
PMR forecasts, supported by quarterly results of the largest MNOs, assume that in 2019 the value of mobile operators’ revenues in Poland will grow by 0.3%. In the following years, however, the growth rate will significantly accelerate. As a result, the average annual growth rate (CAGR) of the market in 2019-2024 will be 2.6%. At that time, at the nominal level, the market will increase in value by PLN 4.3bn to PLN 30.1bn. First of all, such a positive trend will be reflected in this year’s increase in the prices of mobile services in subscription offers, the effect of which will be visible in the revenues of operators with a delay in 2020. In addition, the market will continue to gain in value terms thanks to growing revenues from the sale of mobile data services, which will also accelerate due to the aforementioned price increase.
At the same time, the favourable market situation in terms of value will be a consequence of quantitative increases in the post-paid segment. In addition, the growing base, including migration of users from pre-paid offers, combined with higher prices of post-paid offers for customers with a new agreement will increase this impact on the market value.
Positive impact of sales of dedicated equipment in the operator channel
The aforementioned increases in prices of mobile services will result in 42% of revenues generated by operators in 2019-2024 coming from the retail market, mainly from subscription fees. One third of these revenues will be generated by the dedicated equipment sales segment. On the other hand, one fourth of revenues will be generated by the wholesale segment.
PMR expects that in 2019-2024, nominally operators will gain the most from the sale of dedicated equipment in the past year. This will be the result of their entry into the open market with instalments of smartphone sales (this topic was discussed in the previous entry, here). In subsequent periods, the sale of smartphones without the need to bind the customer with a subscription agreement will continue to be important. On the other hand, the saturation of the operator channel with instalment payments for smartphones and the availability of SIM-Only offers, competition from RTV/AGD retail networks and lower increments in smartphone sales in the overall market will limit operators’ revenues in this segment. As a result, when these two trends are combined, the market will grow organically.