The mobile internet market in Poland dominated by price increases and the 5G auction
There is a bull market in the mobile Internet market in Poland, which was worth 5.8 billion PLN in 2019.
PMR predicts that in 2020, the market will increase by over half a billion PLN in value. The market will accelerate due to last year’s price increases for mobile services, which are in addition to the steady organic growth of the user base. At the same time, PMR believes that the ongoing development of 5G networks during the forecast period will not cause drastic shifts in the mobile Internet market in Poland.
The mobile Internet market in Poland - value and changes
According to the latest PMR data, the mobile Internet market in Poland reached a value of 5.8 billion PLN in 2019. The market has been thriving for years, and in recent times, the demand for data transmission on mobile phones has played a significant role. Data packages offered with voice plans are increasingly competitive compared to dedicated internet access (modem/router+computer). Additionally, there is an expansion of digital services and investment by mobile operators to ensure the continuous development of mobile network quality (LTE, LTE-Advanced, 5G).
Until recently, the increasing value of the mobile Internet market was driven by a dynamic increase in access and greater internet user activity, resulting in increased data consumption. At the same time, prices for mobile internet access were on a downward trend, reaching one of the lowest levels in Europe. As a result, and considering the investments in 5G technology, all four MNOs (Mobile Network Operators) raised their prices for mobile services in 2019, mainly in voice tariff plans. PMR attributes the price increases mostly to the segment of mobile data transmission. This assessment is based on the telecoms’ strategy of offering customers higher data packages primarily for mobile phone use as compensation for higher prices.
Find comprehensive information about the current state of the Polish mobile internet and value-added services market in the PMR report:
Taking into account the price increases, PMR forecasts an increase in ARPU (Average Revenue Per User) for mobile internet services over a six-year perspective, primarily in smartphones. This impact will be particularly noticeable in the current year. The two-year cycle of signing new subscription contracts with higher rates will also play a significant role in maintaining ARPU at a higher level, as customers switch to new contracts (including the trend of number portability between mobile networks). In practice, this trend will continue until 2021. In the following years, mobile internet prices are expected to remain stable, although price movements upward in the medium term are not excluded. Ultimately, PMR predicts that the compound annual growth rate (CAGR) of the market between 2020 and 2025 will be 6.5%.
Recently, the Polish mobile Internet market has also been dominated by the auction of the first 5G frequency bands and the overall development of 5G networks. After canceling the auction for resources in the 3.6-3.8 GHz band this year due to the COVID-19 pandemic, the actual investments by mobile operators in this area are being delayed to the next year. Speculation suggests that the distribution of the 3.6 GHz band will take place in the first half of 2021 (end of the first or second quarter). The arrangement of the 700 MHz band should also take place in 2022 or 2023. According to PMR, however, the development of 5G networks during the forecast period will not cause drastic changes in the Polish mobile Internet market. To some extent, it will undoubtedly strengthen the user base for dedicated internet access, mainly in the long term. This will primarily apply to mobile access in stationary locations, which will be able to offer higher network speeds and throughput. However, PMR still sees much greater potential in the fixed-line internet services market, especially in fiber-optic solutions. The importance of classic broadband is further bolstered by the COVID-19 crisis and the additional demand for higher throughput connections due to remote learning and work.
Find comprehensive information about the current state of the Polish telecommunications market in the PMR report:
The impact of 5G networks on telecom companies’ results can be expected primarily in terms of mobile data transmission revenues, although PMR remains cautious in these assumptions. Higher speeds and network capacity of 5G will increase traffic in mobile networks, mainly from smartphones. Furthermore, the availability of 5G services will be tied to the purchase of more expensive tariff plans, which will impact the market value. On the other hand, it is important to consider how customers will adapt to the new technology. However, given the performance of existing 4G and LTE-Advanced networks in Poland, for most users, the transition to 5G will not be a noticeable change. It is also worth noting that 5G networks primarily cater to providing broad support for business solutions.
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ICT Business Unit Director