Wednesday, March 29, 2017

Update on the telecommunications market in Poland, the EU's sixth largest economy - Part 2

Update on the telecommunications market in Poland, the EU's sixth largest economy - Part 2

Recent major Polish regulatory announcements

Court rejects Polkomtel appeal against award of frequencies to T-Mobile and P4

In September 2016 an administrative court in Warsaw dismissed an appeal by Polkomtel against decisions by the UKE regulator over the award of frequencies in the band 1800 MHz to the operators P4 and T-Mobile Poland in the 2013 tender.

Europe challenges Polish regulator over 800 MHz allocation

In late September 2016 the European Commission queried UKE's allocation of 800 MHz LTE spectrum in 2016 to the fixed-wireless provider and MVNO Sferia, which it pointed out belonged to the same group of companies as cellular operators Polkomtel and Aero2, and pay-TV firm Cyfrowy Polsat.

Poland to achieve 42% broadband coverage in 2017

In early December 2016, UKE published its work-plan for 2017 which included increasing broadband coverage to 42% by the end of 2017, completing international negotiations on the liberalisation of 700 MHz spectrum and a review of six markets subject to ex ante regulation.

UKE starts process to invalidate 2007 auction of 1800 MHz spectrum

On January 26, 2017 UKE announced that it had started a process to invalidate the results of an auction of frequencies in the 1800 MHz band carried out in 2007. This is a complicated situation; in October 2007 CenterNet bid PLN128 million for frequencies in the 1710-1730 MHz band, but declined the paired band between 1805 and 1825 MHz. This was later won in a separate tender process by Tolpis, a joint venture between Italian ISP Eutalia and Telekomunikacja Kolejowa, which agreed to pay PLN102 million. The start-up subsequently took on the name Mobyland before being bought by another domestic new entrant, Aero2.

On March 1st it was announced that both CenterNet and Aero2, owned by a company called Midas, would become part of the Cyfrowy Polsat group, which also includes mobile network operator Polkomtel. In August 2009 Mobyland and CenterNet had signed a letter of intent to share usage of their 1700/1800 MHz spectrum for rolling out LTE services, going on to launch Poland's first 4G service in September 2010.

At the time of the auction, the outcome was disputed in court by second-placed bidder T-Mobile Poland (then PTC). In July 2009 the Warsaw Administrative Court ruled that the participants in the original October 2007 tender were not treated equally and that the result should be annulled. UKE launched a successful appeal, but T-Mobile continued its legal battle.

According to Polish newsite, while UKE now appears to be ready to cancel the auction result, the regulator is unlikely to force Aero2/CenterNet to hand back its spectrum or shut down its LTE network but will probably negotiate with all parties involved to settle this and other separate disputes, including the result of the 2015 tender for 800/2600 MHz 4G spectrum auction, the result of which has also caused some controversy.

UKE deactivates another 12 million unregistered prepaid SIMs

In early February UKE announced that following the expiration of the February 2nd deadline for registration of mobile SIMs, it had deactivated about 12 million unregistered prepaid ones. Telecom Paper, an authoritative news source, suggested that although the deactivated SIMs nominally accounted for 31.3% of all issued cards it is possible the effect on the official mobile subscriptions numbers base might be quite small as Polish operators are believed to typically report only the number of their active users to UKE. Previously, T-Mobile in the third quarter of 2015 deactivated 3.84 million unused accounts.

UKE ends mobile operator obligations related to wholesale market for SMS termination

On February 2nd UKE announced that following approvals by the European Commission and Poland's anti-monopoly authority UOKiK (Urząd Ochrony Konkurencji i Konsumentów) of its proposals to end the regulatory obligations of 2010 imposed on mobile operators on the wholesale market for SMS termination. it had decided that no further regulation was justified, and the obligations would cease to apply after a 90-day transitional period.

Regulator reports weak response to offer of free 1 MHz channels

On February 20th UKE reported weak response to its offer of free 1 MHz simplex channels in the range 5.875 - 5.925 GHz in five locations of Poland's most northerly province of Pomerania. Only one application was submitted for one location and no applications were submitted for four locations.

Parliament makes Ministry of Digital Affairs responsible for personal data registers

In late February the Polish parliament introduced a law which made the country's Ministry of Digital Affairs responsible for overseeing Poland's key personal data registers due to the perception by the country's ruling Law and Justice Party of increased threats for national IT systems and the lack of an entity to coordinate personal data protection at government levels.

UKE outlines possible 5 year -plan including deregulation of broadband access market

On February 27th UKE announced that it had started a consultation on what should be included in the regulator's five year plan, and on March 7th the new UKE president, Marcin Cichy, appointed in September 2016, made the following interim comments:

·       Following the focused deregulation in 2014 of the broadband access market in 76 out of 3,000 communes, in which UKE had assessed true deregulated competition was possible, full deregulation of that market was being considered and would take place before 2021.

·       Spectrum distribution and refarming also being looked at.

·       On that issue, Cichy confirmed that 700 MHz frequencies were unlikely to be auctioned before 2020.

·       There was no plan to increase taxation on telecommunications.

Orange Polska withdraws application to extend its CDMA licence

Early in March 2017 Orange Polska announced that, due to what it considered an excessive price of PLN 115 million being asked for by the regulator, it had withdrawn its application to extend for another 15 years its licence to provide around 27,000 Polish customers with a communications service based on 450 MHz CDMA technology.

The licence had expired in 2015 but had been continued under a temporary agreement with UKE. Following the Orange announcement UKE said it would probably redistribute those frequencies via a tender. Subsequently, Orange said it might consider competing in that tender (the frequencies would have to be freed up for the tender to take place so Orange presumably might find it difficult to use these frequencies for the original fixed wireless service, although there is a chance UKE might now negotiate a lower extension  price with Orange).

Polish Ministry says operators offering TV services must register subscribers

On March 9th the Polish Ministry of Culture announced new regulations requiring operators of cable networks, digital TV platforms, broadcasting services via xDSL and IPTV services to report subscribers for registration with the Ministry within a week of the signing of the contract. Operators will be compensated with a payment per subscription reported but will also be fined if they fail to meet the requirement.

Update on the telecommunications market in Poland, the EU's sixth largest economy - Part 1

See also