Promotion of competition and
construction of infrastructure
in Poland
Krzysztof J. Heller, Ph. D.
Undersecretary of State
Ministry of Infrastructure, Poland
Current status – e-readiness
e-public services development level
80
70
Percentage
UK
50
20
PL
FIN
DK
SP PT
FR
IT
NL
40
30
NO
SE
60
IRE
ICE GR DE
AUS
BE
LUX
10
0
Countries
Source: web-based survey on Electronic Public Services in Poland; Cap Gemini, Ernst & Young April 2002
3-4 June 2002
European Ministerial Conference
Ljubljana
2
Reasons of such situation
• Insufficient preparation of IT systems
– Governmental standards
– Security: public key infrastructure
•
•
•
•
Incomplete legal framework
Inadequate training of employees
Expectations of citizens
ICT infrastructure and services
3-4 June 2002
European Ministerial Conference
Ljubljana
3
e-Poland action plan
• All issues are addressed - an action plan is in place
• Progam “e-Poland- Action Plan on the
Information Society Development in Poland for
the years 2001- 2006 “
• Periodically verified and adjusted
• In line with eEurope+ initiative
• Target 0 – development of ICT infrastructure
3-4 June 2002
European Ministerial Conference
Ljubljana
4
Infrastructure – prerequisite for
other targets
• Universal service obligation
• Mobiles will not solve all problems (broadband!)
• Availability: presence in all locations, including
remote and rural areas
• Affordability: service price cannot be a blocking
factor
• Big progress in the last decade, although current
situation still far from satisfactory
3-4 June 2002
European Ministerial Conference
Ljubljana
5
Current Status – availability
Percentage of households that have fixed telephone service
100
P
e
r
c
e
n
t
a
g
e
80
60
40
20
0
BG
CY
CZ
EE
HU
LV
LT
MT
PL
RO
SK
SI
TR
CC Avg EU Avg
Source: EU Candidate Countries (December 2001), ITU for EU Avg
3-4 June 2002
European Ministerial Conference
Ljubljana
6
Current status – penetration
Fixed and Mobile Penetration
80
MOBILE EU
Mobiles Per 100 Inhabitants
Fixed Lines per 100 inhabitants
HIGH: 97
LOW: 61
N
u
m
b
e 60
r
FIXED: EU
p
e
r
HIGH: 78
LOW: 42
1
0
40
0
i
n
h
a
b
i
t 20
a
n
t
s
0
BG
CY
3-4 June 2002
Source: ITU (2001)
CZ
EE
HU
LV
LT
MT
PL
RO
SK
European Ministerial Conference
Ljubljana
SI
TR
CC Avg EU Avg
7
0A2GB
ICT in rural areas – digital divide
Access to the Internet according to the place of domicile
100
80
60
no
%
yes
40
20
0
country
up to 20 th.
20-100 th.
100-500 th.
above 500 th.
3-4 June 2002
European Ministerial Conference
Ljubljana
9
Mexico
Czech Rep.
Poland
Hungary
Turkey
Japan
Korea
Spain
Portugal
Italy
New Zealand
OECDaverage
Australia
UK
Greece
USA
Austria
Germany
Ireland
France
Finland
Switzerland
Belgium
Netherlands
Fixed
Luxembourg
Canada
3000
Denmark
Sweden
Norway
Iceland
Service affordability - prices
Usage
2500
2000
1500
1000
500
0
OECD Composite Business basket, Nov 2000, VAT excluded, UDS PPP
0
3-4 June 2002
European Ministerial Conference
Ljubljana
OECD Composite Residential basket, Nov 2000, VAT included, USD PPP
10
Poland
Mexico
Hungar y
Czech Rep.
Turkey
Portugal
Japan
Australia
Gr eece
Spain
Korea
Italy
OECDaverage
New Zealand
Austria
USA
Canada
Ireland
UK
Finland
France
Belgium
Germany
Luxembourg
Fix ed
Netherlands
Switzer land
Denmark
1000
Nor way
Sweden
Iceland
Service affordability - prices
Usage
900
800
700
600
500
400
300
200
100
Fixed market - status
• Densification of infrastruture requires further
significant investment
• Western path: first build from public money, then
privatise and liberalise
• Polish incumbent is already privatised:
– slows the investments down (from 1.2 M lines/year to
0.2 M lines/year)
– looks mainly for profitability (e.g. rural areas using
NMT – no broadband)
• State budget cannot afford subsidies
3-4 June 2002
European Ministerial Conference
Ljubljana
11
Golden age is over
• Overall problems with attracting investment in
telecoms
• Backbone networks OK (technology!), access
networks needed (broadband-ready)
• Lowering investment cost
–
–
–
–
Alternative technologies (CATV, radio access, PLC)
Utilisation of existing assets
Avoiding overbuild – cooperation
Simplification of the network rollout process
• Increasing revenue – new services
3-4 June 2002
European Ministerial Conference
Ljubljana
12
Attracting investors – what
government can do?
• Previously – selling market with a company
• Long – term stability needed due to investment
lifecycle
– Stable and consistent legal framework
– Public and unwavering regulatory policy
• New entrants must have a business chance
(competition, lower entry barriers)
• Incentives rather than obligations for lessattractive areas (e.g. bundling long-term contracts)
• Educated market – open for new services
3-4 June 2002
European Ministerial Conference
Ljubljana
13
Competition: ensuring affordable
pricing and service quality
• Financing universal service obligation:
– Fund – contribution from the operators
– Structural funds
– Licence fee conversion
• Creating competitive market:
– Legal framework – telecomm act and secondary
legislation
– Activities of regulator
– Facilitation of actual competition
3-4 June 2002
European Ministerial Conference
Ljubljana
14
Stable legal framework
• Historical problems - „From local to long
distance” policy (only partially succesful)
• New telecom act in force since 1 Jan 2001
– Step towards market liberalisation
– Did not resolve historical obligations (licences)
– Problems with secondary legislation
• Amendments to the telecommunication act:
– Consistent with the current EU framework
– Approved by the Council of Ministers 28 May 2002
– Full competition from 1 Jan 2003
3-4 June 2002
European Ministerial Conference
Ljubljana
15
Stable regulatory framework
• Former regulatory practice
– In place since 1 Jan 2001
– Inactivity, long decision process
– Incumbent blocking all unwanted decisions
• New regulatory authority since 1 April 2002
– Dominant position of incumbent established
– All incumbent’s legal cases dropped
– Clearing the backlog
3-4 June 2002
European Ministerial Conference
Ljubljana
16
Facilitation of competition
• Situation of alternative operators
– Fragmented – lacking critical mass (8% marketshare)
– Debt restructuring needed
– Licence fee payments outstanding
• New entrants in better position
• Credibility for investors
• Consolidation
– Using economies of scale
– Public-private partnership
– Better utilisation of state-owned assets
• State Security issues (building public confidence)
3-4 June 2002
European Ministerial Conference
Ljubljana
17
Sharing infrastructure
Local loop unbundling
Service
Operator
Infrastructure
Operator-neutral infrastructure
Service
Operator
Infrastructure
3-4 June 2002
European Ministerial Conference
Ljubljana
18
Infrastructural operator
• Using access network ownership to gain
competitive advantage
• Local loop unbundling - no major success so far
• Could separation of infrastructure and service
delivery help?
• Limited usage already in place: mobile operators
• Pros:
– better utilisation of infrastructure
– service-neutral
• Cons: major change of status-quo
• Requires further investigation
3-4 June 2002
European Ministerial Conference
Ljubljana
19
Next steps for 2003
• Implementation of new EU directives – new
approach to telecom law
• Resolution of the Universal Service funding
issue
• Completion of the consolidation project
• Evaluation of the infrastructural operator
concept
3-4 June 2002
European Ministerial Conference
Ljubljana
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