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Poland's broadband ambitions continue undaunted in the face of EU cuts

When the EC announced it was ditching plans to spend €8bn on broadband funding, it was thought developing economies' roll-outs would suffer. The reality may be very different.
Written by Michiel van Blommestein, Contributor

Despite cutting billions from Europe's planned IT and broadband spend, the EU's new budget for the next seven years has met with cautious optimism from Polish IT services investors.

Under the revised budget, passed by the EU earlier this month, spending on broadband and digital services was cut from a proposed €8.2bn to €1.2bn. Perhaps unsurprisingly, Europe's digital commissioner Neelie Kroes has voiced her disappointment about the cuts, while others have queried if the cuts will mean emerging economies' tech industries — particularly those in Central and Eastern Europe — will be left behind.

However, while the EU is taking with one hand, it may be giving with the other. Poland for example saw an increase of the money it receives from Brussels: €106bn for the budget period 2014-2020 — an increase of €4bn on the previous budget.

Part of that money is received in the form of support from the European Regional Development Fund. And it's a portion of that funding (combined with some from the Polish government itself) that is being to develop broadband in the country, especially in the poorer eastern regions.

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


Local roll-outs

According to a spokesman for Poland's Office of Electronic Communications (known as the UKE) the proposed cuts in the EU broadband fund will therefore not affect any broadband ambitions in Poland.

"The money that was meant for boosting broadband within the Connecting Europe Facility is rather meant for broadband connections between countries," he says. "But the broadband projects in Poland are regional and therefore funded using regional funds."

Currently, the OKE estimates there are about 150 regional projects ongoing, with a combined worth of 3bn zlotys (around €725 million), with companies like Orange, Hawe, BT Poland, Biatel Telekomunikacja and Inea winning local contracts.

Also, in contrast to the cuts in European broadband schemes, the Polish minister for administration and Digitisation Michal Boni last month promised 10bn zlotys (around €2.5bn) to boost 30Mbps broadband in Poland until 2020.

Poland's services industry

After the EC budget was announced in February, the Polish government almost immediately signalled that it intends to spend a larger part of the funds on 'sustainable' economic development, meaning that job creation will become more important in the allocation of the funds. The Polish business services sector has been a creator of jobs in recent years, boding well for the sector.

Jacek Levernes, VP at HP Europe and the chairman of the Polish Association of Business Service Leaders (ABSL), expects the Polish business services or technology sectors to continue developing apace, despite cuts to EC broadband cash and other changes in funding. 

"The business services sector has grown with almost 50 percent since the crisis started in 2009, creating more than 40,000 new jobs since then. As long as there are issues globally, we think we will keep on growing 15 to 20 percent over the next few years."

According to ABSL estimates, the number of people working in the business services industry hit 100,000 for the first time late last year, and that number is forecast to increase by another 15,000 to 20,000 in the coming year – making the segment the fastest growing in terms of jobs within the Polish economy.

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