VoIP in Poland: value-added service or independent market segment?

At the end of 2008 the Polish VoIP telephony market was worth PLN 440m, with CaTV operators having generated the largest share of revenue in the segment. In recent years also fixed-line operators have included VoIP services into their offer.

According to research and consulting company PMR Polish VoIP market continues to represent a small share of the fixed-line telecommunications market. In 2008 it accounted for approximately five percent of the market in terms of the revenue. The IP telephony is still primarily treated as a tool for making free PC2PC calls by individual users. In the case of the corporate sector, the majority of companies continue to be reluctant towards VoIP solutions and typically use it merely as an additional tool.

The individual customers segment is dominated by CaTV operators providing internet telephony integrated in the triple play service. At the end of 2008 CaTV operators had approx. 450,000 VoIP subscribers. It is noteworthy that in terms of the price offer for VoIP the CaTV operators are positioned between providers specialised in IP telephony and traditional fixed-line telecoms. Firstly, it helps to attract customers, and secondly, it enables the CaTV operators to generate relatively higher margins.
In order to improve their competitive advantage on local markets, also local internet providers began to launch the VoIP service. The representatives of these companies declare the service does not generate high revenue, however, it helps to retain customers. Apart from implementing their own IP telephony systems, more frequently local ISPs take advantage of the platforms supplied by bigger providers.
The market share of specialised VoIP operators (e.g. EasyCall, FreecoNet, HaloNet) remains rather insignificant as far as their revenue is concerned. The market players start to perceive focusing on the individual customers segment in the past as erroneous. At present, operators shift their attention towards business customers, expecting higher revenue resulting from greater traffic and value-added services.
The internet telephony services have also been increasingly present in the offer presented by telecoms providing fixed-line telephone services. In their case, the VoIP complements operators’ offer and facilitates the retention of customers.
Within the upcoming four years, the growth rate in the Polish VoIP market will remain stable. The sector’s value is expected to be positively affected by the economic deceleration in Poland. Both companies and households attempting to reduce their telephone bills, may decide the VoIP is a noteworthy alternative. Moreover, the internet telephony will continue to enjoy growing popularity as a part of telecommunications services packages. Western European examples – especially France – prove that this form of VoIP services is the most popular among individual customers.
On the other hand, however, the gap between prices offered by traditional telephony and VoIP begins to narrow. As a result the internet telephony loses its greatest competitive advantage – significantly lower call rates. Nevertheless, the IP telephony users will continue to be able to make free calls within the network as well as to take advantage of a wide scope of value-added services.
In the long term, a gradual migration of subscribers from traditional to internet telephony is expected, which will chiefly be favoured by operators’ investing in the NGN. Nonetheless, since the investments are being postponed, the centre of gravity is moving towards mobile telecommunications and the prices offered by fixed-line operators continue to decline, the process will be much slower than the market players themselves had expected several years ago.

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PMR Publications(www.pmrpublications.com) is a division of PMR, a company providing market information, advice and services to international businesses interested in Central and Eastern European countries and other emerging markets. PMR key areas of operation include market research (through PMR Research), consultancy (through PMR Consulting) and business publications (through PMR Publications). With over 13 years of experience, highly skilled international staff and coverage of over 20 countries, PMR is one of the largest companies of its type in the region.

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