4.3 billion PLN—that’s how much the mobile phone market in Poland is expected to grow between 2019 and 2024

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4.3 billion PLN—that’s how much the mobile phone market in Poland is expected to grow between 2019 and 2024

In 2018, total revenue for mobile operators amounted to 25.8 billion PLN, representing a 3% year-over-year decline. Currently, the mobile segment accounts for approximately 58% of the value of the telecommunications market in Poland. Over the next six years, mobile telecom operators’ revenues will become even more prominent in the market structure due to price increases for mobile services.

In 2018, total revenue for mobile operators fell by nearly 3%, to 25.8 billion PLN. This decline resulted from further price cuts for telecommunications services, the adoption of IFRS 15 in operators’ financial reporting, and a marked slowdown in the growth of revenue from equipment sales (due to the saturation of the customer base with installment plans and the implementation of a strategy involving a drastic cut in phone subsidies).

Last year, according to PMR estimates, mobile telecom revenues—excluding revenue from equipment distribution—totaled 19.6 billion PLN. On a year-over-year basis, this represents a decline of nearly 5%. The market suffered an even greater decline in terms of retail revenue alone. Last year, the value of the retail mobile telephony market totaled PLN 14.4 billion, eroding by nearly 7% year-over-year.

Forecast: The Mobile Phone Market in Poland

In the coming years, however, the mobile phone market is expected to experience a positive economic outlook. The market value will be significantly influenced by an increase in service prices. Over the past 12 months, the most significant development in the Polish mobile phone market was the introduction of higher service prices by three of the four MNOs, accompanied by an increase in data allowances. This represents a major shift in the market compared to previous years, when fierce competition led to steadily falling service prices. In mid-2019, Orange, P4, and T-Mobile (for select mobile plans) took this step in succession. In September 2019, T-Mobile once again revised its mobile service pricing—implementing its second price increase within two months. PMR estimates the average price increase across all operators’ plans at approximately 17%.

PMR Forecasts, based on the quarterly results of the largest MNOs, project that in 2019, mobile operators’ revenue in Poland will grow by 0.3%. In the coming years, however, the growth rate will accelerate significantly. As a result, the market’s compound annual growth rate (CAGR) for 2019–2024 will be 2.6%. During this period, in nominal terms, the market will grow by 4.3 billion PLN, reaching 30.1 billion PLN. This positive trend will be driven primarily by this year’s price increase for mobile services in postpaid plans, the effect of which will be reflected in operators’ revenues with a delay, in 2020. In addition, the market will continue to grow in value thanks to rising revenues from the sale of mobile data services, the growth rate of which will also accelerate due to the aforementioned price increase.

At the same time, the favorable market situation in terms of value will result from volume growth in the postpaid segment. In addition, the growing subscriber base—including users migrating from prepaid plans—combined with price increases for postpaid plans for new contract customers will amplify this impact on the market’s value.

These increases in mobile service prices will result in 42% of operators’ revenue generated between 2019 and 2024 coming from the retail market, primarily from subscription fees. One-third of these revenues will come from the sale of dedicated equipment. The remaining one-quarter of revenues will come from the wholesale segment.

PMR forecasts that, in nominal terms, operators will generate the most revenue from the sale of dedicated devices in 2019–2024 during the current year. This will be the result of their entry into the open market with installment sales of smartphones.

In the coming periods, smartphone sales that do not require customers to sign a subscription contract will continue to be significant. On the other hand, the saturation of the carrier channel with installment sales of smartphones and the availability of SIM-only plans, competition from electronics and home appliance retail chains, and slower growth in smartphone sales in the overall market will limit carriers’ revenues in this segment. As a result, when these two trends are considered together, the market will grow organically.

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