1 Telecommunications tariffs Telecommunications tariffs Telecommunications tariffs in Poland in Poland in Poland and new EU member countries: and new EU member countries: and new EU member countries: Current status and perspectives Current status and perspectives Current status and perspectives Dr. Jerzy Jerzy Kubasik Kubasik Dr. Institute of Electronics and Telecommunications Institute of Electronics and Telecommunications Poznan University of Technology University of Technology Poznan Poznan, Poland , Poland Poznan ITU Seminar, Vilnius (Lithuania), October 5-7, 2004 Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Agenda Agenda 2 • Poland: Regulatory milestones and market players Poland: Regulatory milestones and market players • • Tariff regulation in Poland Tariff regulation in Poland • • TP’s TP’s tariff evolution tariff evolution • • International tariffs comparisons International tariffs comparisons • • Independent operator’s tariffs Independent operator’s tariffs • • Examples from Germany Examples from Germany • • Alternative solutions Alternative solutions • • Trends in EU Trends in EU- -15 15 • • Tariffs in New Member States Tariffs in New Member States • • Perspectives Perspectives • Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Regulatory environment – – milestones milestones Regulatory environment 3 • Communications Act (1990) Communications Act (1990) • • Amendments of Communications Act Amendments of Communications Act • (1995) (1995) • Telecommunication Law (2000) Telecommunication Law (2000) • • Amendments of Telecommunication Law Amendments of Telecommunication Law • (2003) (2003) • New Telecommunication Law (2004) New Telecommunication Law (2004) • Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Liberalisation milestones Liberalisation milestones 4 • 1990s 1990s – – “from the bottom” philosophy “from the bottom” philosophy - - • fails fails • late 1990s late 1990s – – DLD market liberalization DLD market liberalization • during TP privatization - - “secret “secret during TP privatization obligations” obligations” • 2003... 2003... – – acceleration ? acceleration ? • • 2004... 2004... – – great expectations ! great expectations ! • Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
5 Fixed and mobile penetration in Poland Fixed and mobile penetration in Poland 51,1 50 45,6 36,4 40 33,1 32,1 31,1 29,6 28,3 26,3 30 24,9 22,8 19,3 17,5 16,9 20 14,9 13,0 11,5 10,3 10,2 9,3 8,6 8,2 10 5,0 2,1 0,6 0,2 0,0 0,0 0,0 0,0 0,0 0,1 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1H2004 Source: GUS - Polish Statistical Office Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
6 Fixed penetration in EU (2003) Fixed penetration in EU (2003) 79,7 80 73,6 68,8 66,9 70 65,7 61,4 59,1 56,6 60 52,1 49,4 48,8 48,6 48,4 48,1 50 45,4 42,9 41,4 40,7 36,1 36,0 40 35,1 31,9 28,3 30 25,3 24,1 20 LU SE CY DK DE NL UK FR MT BE FI IE IT AT GR ES PT SL HU CZ EE PL LV LT SK Source: ITU, May 2004 Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
market shares 7 market shares Local 9 0 .1 % DLD 8 1 .0 % F2 M 8 2 .5 % I LD 7 6 .4 % Main com petitors Source: TP, July 2004 Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
8 Mobile penetration in EU (2003) Mobile penetration in EU (2003) 106,1 110 101,8 96,5 100 91,6 90,4 90,1 88,9 88,7 87,9 87,1 90 84,5 84,1 78,6 78,5 78,5 76,8 80 72,5 69,6 68,4 67,6 66,6 70 65,0 58,4 60 52,9 50 45,1 40 LU IT CZ ES PT FI SE DK AT SL IE UK BE DE GR NL MT FR SK HU LT EE CY LV PL Source: ITU, May 2004 Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
9 Mobile market shares in Poland (1H2004) Mobile market shares in Poland (1H2004) Centertel PTC 31,2% 38,4% Polkomtel 30,4% Source: TP, July 2004 Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Tariffs in Poland 10 Tariffs in Poland Ra an nk k ( ( 1 1 - - m mo os st t e ex xp pe en ns si iv ve e) ) R Ba B as sk ke et t Fe F eb b. . Fe F eb b. . Ma M ay y Au A ug g. . No N ov v. . 2 20 00 02 2 20 2 00 03 3 20 2 00 03 3 20 2 00 0 3 3 20 2 00 03 3 3 3 4 4 4 Bu us si in ne es ss s b ba as sk ke et t 3 3 4 4 4 B Re es si id de en nt ti ia al l b ba as sk ke et t: : 1 1 3 3 3 3 3 3 3 3 R - f fi ix xe ed d b ba as sk ke et t 13 3 7 8 7 8 1 7 8 7 8 - 4 2 3 4 3 - d do om me es st ti ic c F F2 2F F c ca al ll ls s 4 2 3 4 3 - 2 2 2 3 4 - d do om me es st ti ic c F F2 2M M c ca al ll ls s 2 2 2 3 4 - 2 1 3 2 2 - I I n nt te er rn ne et t d di ia al l- -u up p 2 1 3 2 2 - 3 5 5 5 5 - I I L LD D c ca al ll ls s 3 5 5 5 5 - Source: URTiP based on Teligen’s T-Basket Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Tariff regulation in Poland Tariff regulation in Poland 11 • 1991 1991- -1999 1999 • – operators ( operators (incl incl. . TP TP) are free to set own tariffs ) are free to set own tariffs – – no maximum prices have ever been set no maximum prices have ever been set – TPSA ’s there were no safeguards against TPSA – there were no safeguards against ’s – predatory pricing predatory pricing de facto regulator of has became the de facto – TP TP has became the regulator of – prices for the entire market prices for the entire market Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
Tariff regulation in Poland Tariff regulation in Poland 12 • 2000 2000- -.... .... • – prices should be cost prices should be cost- -oriented oriented – – SMP operators’ price lists are subject of SMP operators’ price lists are subject of – URTiP’s approval approval URTiP’s – SMP operators’ prices for universal services SMP operators’ prices for universal services – should be cost- -based after 2003 based after 2003 should be cost – reasonable price not defined reasonable price not defined – status- -quo quo is retained in practice status – in practice is retained – Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
TP’s tariff evolution tariff evolution TP’s 13 • Starting point 1992 Starting point 1992 • – high connection charge high connection charge – – cheap rental charge cheap rental charge – – cheap local calls cheap local calls – – long distance calls prohibitively expensive and high long distance calls prohibitively expensive and high – value of the ratio of charges for long distance call to value of the ratio of charges for long distance call to local call (36:1) local call (36:1) – expensive international calls expensive international calls – – not flexible approach to the modern elements of not flexible approach to the modern elements of – tariffs such as off peak discounts and optional tariff tariffs such as off peak discounts and optional tariff plans plans Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
TP’s tariff evolution 1992 tariff evolution 1992- -2001 2001 TP’s 14 • Installation charge Installation charge • – changed 3 times changed 3 times – – consumed by inflation consumed by inflation – – today is much lower than at the beginning of 1990’s today is much lower than at the beginning of 1990’s – • Rental charge Rental charge • – changed 8 times in 3 waves changed 8 times in 3 waves – • 1991 1991- -92 92 – – rapid growth, struggles with high inflation rapid growth, struggles with high inflation • • 1993 1993- -98 98 – – “adverse” “adverse” rebalancing rebalancing policy policy • – “ “À la À la recherche recherche du temps du temps perdu perdu” ” , • 1999 1999- -2001 2001 – , rapid growth rapid growth • stopped by demand barrier, 5.4% churn rate in 2001 stopped by demand barrier, 5.4% churn rate in 2001 – today at 1993 level today at 1993 level – Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
15 Installation charges in real terms Installation charges in real terms 2 500 2 000 1 500 PLN 1 000 500 0 Jan.'90 Jan.'91 Jan.'92 Jan.'93 Jan.'94 Jan.'95 Jan.'96 Jan.'97 Jan.'98 Jan.'99 Jan.'00 Jan.'01 December 2001 constant prices Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
16 Rental charges in real terms Rental charges in real terms 35 30 25 PLN per month 20 15 10 5 0 Jan.'90 Jan.'91 Jan.'92 Jan.'93 Jan.'94 Jan.'95 Jan.'96 Jan.'97 Jan.'98 Jan.'99 Jan.'00 Jan.'01 December 2001 constant prices Politechnika Poznanska Instytut Elektroniki i Telekomunikacji
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