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Is Poland finally getting out of the broadband slow lane?

With funding from the EU and new rollouts scheduled, Poland is improving its position as one of Europe's fixed broadband laggards - even as the country's mobile broadband is making progress.
Written by Michiel van Blommestein, Contributor

Alcatel Lucent, fibre company Hawe and network infrastructure provider TP Teltech have been given the green light to establish a new joint venture aimed at boosting broadband in Poland.

It's about time: the country is seriously lagging behind its European neighbours on fixed broadband.

The joint venture, which got the necessary approval from Polish regulator UOKiK last week, will roll out  broadband infrastructure in five voivodships (provinces) in the east of Poland: Warmia-Masuria, Lublin, Swietokrzyskie, Subcarpathian and Podlasie. 

The five rollouts are being funded under the European Commission's Digital Agenda for Europe plan. The scheme's goal is to give all European citizens broadband connections of at least 30Mbps by 2020 and have half of households able to access at least 100Mbps. The Commission has given Poland around €1.5bn to spend between 2007 and 2013 to help achieve the plan's aims – and it's thought around 1bn zlotys of that (€250m) remains to be spent.

Lublin is one of the areas targeted for new broadband infrastructure Image credit: Shutterstock

However, Poland is still in the broadband penetration slow lane, compared to countries with similar or poorer economical conditions in the region, IDC analyst Michal Wlasenko told Central European Processing.

"Broadband penetration among Polish households was 31 percent at year-end 2011, compared to 44 percent in Slovakia, 52 percent in Hungary, 53 percent in the Czech Republic, and 61 percent in Lithuania", IDC's research found, he says. "About one in five Polish households do not have access to either a DSL or cable broadband connection; some Polish consumers choose mobile-only broadband solutions, and some Polish consumers simply do not believe that they need a broadband connection at all."

Also, competition in the Polish market is not as well developed as in other countries, such as Lithuania, Wlasenko says.

The main reason is that former state company Telekomunikacja Polska (TP) had a monopoly on the infrastructure side as late as 2007.

Even now, whole blocks of flats are bound to one or two ISPs, whose offerings are not on par with service providers in other European countries. While TV commercials do tout 100Mbps connections for good prices, the availability usually is very, very limited (your reporter, who lives near the centre of Poland’s third-largest city, has time and again heard that such services are "technically not available" in his area).

The situation in Eastern Poland (which lags behind the more urban west economically and is often derisively called 'Poland B' by its own inhabitants) is even more urgent.

It remains to be seen whether Polish fixed broadband is going to take off as quickly as the EU wants. "A significant amount of fibre is likely to go into the ground in the next two years, primarily in Eastern Poland," Wlasenko says, "but it remains to be seen whether and to what extent this will benefit consumers in the medium term."

The situation is not all bad, however: "According to the EC, the percentage of broadband connections in Poland with a speed of at least 2Mbps increased from 48 percent in 2010 to 74 percent in 2011, so there is progress being made."

Mobile broadband: better, but…

A great deal of energy has been put into the Polish mobile broadband market and competition is thriving. "The mobile broadband market has been more vibrant and competitive than the fixed broadband market," Wlasenko says. "In 2009, Plus [the brand name of Polish mobile operator Polkomtel] was a clear leader in the market share of internet access via 2G/3G modems, but the addition of Play [operator P4's brand] and an uptake in smartphone adoption and total market value has injected more competition into the market.

"2G/3G modems have become the most popular form of internet access, taking over the formerly leading xDSL technology."

But despite all this, 3G coverage is still lagging in Poland. "The EC listed Poland's population 3G coverage at 62.4 percent at year-end 2010, the lowest level in the EU," Wlasenko says, citing an IDC report. "Poland's mobile broadband penetration rate... was about six percent of population at year-end 2011, similar to markets like the Czech Republic, Lithuania, and Estonia."

Still, mobile broadband is developing more rapidly in Poland than the fixed kind. Earlier this week, the regulators announced an auction of 1800 MHz spectrum, which according to Wlasenko will probably be awarded to Orange and P4, the number two and three in the market respectively. The auctions "are expected to further enrich the 3G and 4G coverage, as the auction rules require investment to be finalised within 24 months of the auction being finished".

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