PMR forecasts A.D. 2020 for the telecommunications market in Poland

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What will the telecommunications industry in Poland face in 2020? In our opinion, it will be a year that will pass under the motto “5G”. Below we also present other events and trends that will affect the market.

Telecoms market bouncing back

According to PMR’s latest forecasts, in 2020 the Polish telecommunications market, as defined by the segments of mobile telephony, fixed-line telephony, Internet access and pay TV, will grow by 2% to over PLN 41 billion. Add to this the market of network and telecommunications equipment and accompanying services and the value of the market will exceed PLN 50 billion.

Of course, this is mainly the effect of price rises in the mobile telephony market, which will show even higher dynamics than the entire operator market. A better result is likely in the Internet services market (both mobile and fixed). In addition to the aforementioned price increases for mobile services (date embedded in the subscription), in the fixed market, the growing quality of offered services and the growing importance of fibre-optic cables as the last mile access infrastructure will start to make the difference.

Data center market is not included in the telecommunications market. However, a two-digit growth is possible here. This is a segment that has recently gained in potential thanks to Google’s announcement about the colocation of resources in three domestic commercial centers or new investments carried out by, among others, Equinix and CPS Group.

5G at the centre of events

The topic that will electrify the industry will undoubtedly be 5G. The auction is primarily because, however, billions of zlotys, which will feed the state budget, work on your imagination. As far as bandwidth division is concerned, we do not expect any surprise, but to maintain the status quo, all the more so as the auction will most probably be limited to the currently operating MNOs. However, there will certainly be more “noise” around 5G. Operators will try to make a quasi-commercial start in selected locations even before the auction is resolved.

There will also be more and more settlements on the suppliers’ side. The pressure is still on whether Chinese producers, headed by Huawei, should be allowed to build 5G networks in Poland. In our opinion, a pragmatic approach will prevail and there will be room for everyone on the market.
5G will also be the dominant topic in the area of regulation. The Office of Electronic Communications (UKE) will focus on ensuring that auctions run smoothly. The issue of FTRs, for example, will come to the fore. The regulation of PEM standards, which the industry has been waiting for, was already given to us by the Ministers of Health and Digitization before Christmas, so this important topic has already been settled at the end of 2019.

Will Vectra take over Multimedia Polska?

This is a question worth 100 points. All the more so because it is influenced by two independent factors: administrative and regulatory (details of the decision of the Office of Competition and Consumer Protection – UOKiK allowing for a merger) and business and negotiation (i.e. agreement of the operators themselves on the final financial terms of the transaction). In our opinion, the transaction in 2020 is highly probable. Earlier decisions of the UOKiK allow both parties to make a certain projection of a possible decision, so it should not come as a big surprise. However, both parties are also interested in concluding the agreement as they returned to the negotiations after they had been broke off.

Increase in service prices inevitable

As we mentioned above, the value of the telecommunications market will be significantly affected by the increase in service prices. Over the last 12 months, the most important event in the Polish mobile market has been the introduction of price increases by three out of the four largest MNOs, with a simultaneous increase in data transmission package sizes. In mid-2019, Orange, P4 and T-Mobile (for selected mobile plans) decided to do so. In September 2019. T-Mobile once again changed the price list for its mobile services – making a second price increase within two months. The average price increase for all PMR operators is estimated at around 17%. This is a huge change in the market compared to previous years, when competition led to ever lower service prices.

PMR’s forecasts, supported by the quarterly results of the largest MNOs, assume that the value of mobile operators’ revenues in Poland will practically remain unchanged in 2019. In the following years, however, the growth dynamics will clearly accelerate. As a result, the average annual market growth rate (CAGR) in 2019-2024 will be 2.6%. During this period, at the nominal level, the market will increase its value to over PLN 30 billion. This year’s increase in the prices of mobile services in post-paid offers will first translate into such a positive trend, the effect of which will be visible in operators’ delayed revenues in 2020. Moreover, the market will continue to gain in value thanks to growing revenues from the sale of mobile data transmission services.