The mobile telephony market in Poland will increase by PLN 4.3bn (€1bn) between 2018 and 2024

In 2018, mobile operators in Poland generated combined revenues of PLN 25.8bn (€6.1bn), a 3% decrease on the year before. Mobile currently accounts for 58% of the Polish telecommunications market, but its share will rise to 60% by 2024 due to increases in the prices of mobile services.

In 2018, the combined revenues of mobile operators decreased by nearly 3%, to PLN 25.8 bn (€6.1bn). Several factors were responsible, including further price erosion in telecommunications services, the application of IFRS 15 to operators’ financial reporting, or significantly slower growth in revenues from equipment sales (a consequence of market saturation with device installment plans and radical cuts in handset subsidies).

Excluding equipment sales, mobile operators’ revenues amounted to PLN 19.6bn (€4.6bn) in 2018, according to PMR estimates. This represents an annual decrease of almost 5%. Their retail revenues dropped even more sharply, by nearly 7% to PLN 14.4bn (€3.4bn).

In the following years, however, the mobile telephony market is facing a positive economic situation. In mid-2019, three of the country’s four MNOs, Orange, P4 and T-Mobile, raised their service rates (T-Mobile for selected plans) in what was the first such increase in years. They also raised the prices of data transmission packages. It was a truly huge change, coming after a period of fierce price war. Two months later, in September 2019, T-Mobile once again adjusted its price list for mobile services. According to our estimates, the average price increase at the three operators was around 17%. This will have a significant positive impact on market value in the coming years.

According to PMR’s estimates, supported by the quarterly results of the largest MNOs, in 2019 the revenues of mobile operators in Poland grew by a modest 0.3%. In the following years, however, the rate of growth will clearly accelerate. As a result, in 2019-2024 the average annual market growth rate (CAGR) will amount to 2.6%. During this period, the market will increase in value by PLN 4.3bn (€1bn), to PLN 30.1bn (€7.1bn).

One crucial reason are the increases in the prices of services in post-paid plans that most of the country’s MNOs introduced in 2019 – the first such increases in years – which will show up in their revenues in 2020. The price hikes will also accelerate growth in revenues from data services.

Volume increases in the post-paid segment, with users migrating from pre-paid, will also support growth in the market’s value.

As a result of the price increases in mobile services, 42% of operators’ revenues generated between 2019 and 2024 will come from the retail market (mainly from subscription fees). Dedicated equipment sales will contribute a third of the total and the wholesale segment a quarter.

PMR expects that in the years until 2024, operators will gain the most from the sale of dedicated equipment in 2019. This will be the effect of their entry with installment sales of smartphones on the open market. In subsequent periods, the sale of no-contract smartphones will continue to be important. On the other hand, factors such as saturation of the operator channel with no-contract smartphone installment plans, availability of SIM-Only offers, competition from consumer electronics chains, and lower growth in smartphone sales in the total market will limit operators’ revenues in this segment. As a result, once these two trends overlap, the market will grow organically.

AUTHOR
Katarzyna Sacha
Senior Analyst

MEDIA CONTACT
marketing@pmrcorporate.com