July 1999

Poland Master Report

1. The regulatory background

The major telecommunication network facilities in Poland combine a mixture of public and private provision. This current provision reflects the libreralisation of the telecommunication market in Poland. From the evidence presented in the Regulatory Developments section, it can be seen that partial liberalisation, ongoing liberalisation and full liberalisation of the infrastructures, voice telephony and mobile telecommunications sectors of telecommunications provision has enabled particular providers to emerge, and to dominate the current market. The regulations governing the telecommunication market became most effective following the political changes in 1989. General telecom policy has focused on liberalisation of the market and extension and integration of existing provision. The 1997 victory of the AWS-UD coalition government has led to greater liberalisation of the telecommunications market as well as associated policies. The immediate effect has been the privatisation of Telekomunikacja Polska S.A. (TPSA) and the restructuring of the Polish Post. Further liberalisation is expected in the future.

2. Business constraints and entry barriers

Overall control of the telecommunications market lies with the Ministry of Posts and Telecommunications. This ministry is also the National Regulator. The effect on the business environment is to maintain a degree of state control over the telecom sector. The scope of the Ministry’s activities are broadly in issuing licenses (except for licenses provided by the TPSA) and defining the parameters of the telecom network. Therefore despite the focus on increased liberalisation in the telecom industry, the state is still capable of exercising regulatory control.

The main barriers to entry in the public telecommunication network arise in the acquisition of licenses from the Ministry of Posts and Telecommunications. This sector is currently partially liberalised through the privatisation of the TPSA. Further privatisation will begin in August 1999, when 25-35% of TPSA shares will be sold. This will reduce the control of the public telecom network by the Ministry of Posts and Telecommunications. However, TPSA will continue to have a monopoly on international connections until 2003. The analogue mobile operator Centertel and the largest cable operator Polska Telefonia Kablowa are partially owned by TPSA.

In the voice telephony market, local communication services are more liberalised, therefore there are reduced barriers to entry. Full liberalisation in this sector will occur in 2001. Domestic long-distance voice telephony, international communication and voice services clse to user groups are partially liberalised sectors. The greatest barrier to entry occurs in the international communication sector where TPSA enjoys monopoly power until 2003.

The mobile telecom sector is more competitive than the voice telephony market. Analog, GSM digital, DCS 1800 digital are partially liberalised markets. Paging and Satellite communications are competitive but competition is restricted locally in the former, and satellite faces similar barriers to competition as the voice telephony sector in the area of international communications.

Despite the barriers to entry, it is possible to overcome the restrictions by pursuing alternative networks. For example, Cable TV companies and data communications can compete with telecom operators for the provision of telecom services, as the Cable TV and data communications markets are open.

A further restriction to full competition is the proviso that at least 51% of domestic long-distance telecommunications operators must be Polish-owned. This legislation exists until 2003.