Sebastian Kowalczyk

All you need to know about Poland’s new Electronic Communication Law (PKE)

Sebastian Kowalczyk — Thu, 05 Sep 2024 09:57:51 +0000

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All you need to know about Poland’s new Electronic Communications Law (PKE)

The new Electronic Communications Law introduces significant changes that will affect both operators and users of telecommunications services. These regulations adapt the Polish market to EU regulations, while introducing new mechanisms for the protection of consumers and entrepreneurs. While many of these changes are evolutionary, they will have a real impact on the way contracts are concluded and performed, as well as on the rights and obligations of subscribers. It is worth following these changes to be prepared for the new reality in the area of electronic communication.

Key points:

New new law is partially implemented and operators have time until 10th November to implement remaining customer-facing changes
It is a harmonization of Polish Telecom Law with EECC (European Electronic Communications Code).
Expands the coverage of consumer rights to micro-entrepreneurs, small businesses and NGOs.
Creates new way to cancel your service with your operator such as SMS or e-mail
Caps long term contracts to maximum 24 months from previus 36 months
Regulates what happens with pre-paid credits after service closure
Enforces clear and conscise documentation of customer facing offers
Regulates explicitly pre-paid agreement forms
Introduces new, electronic, ways of customer identity check leveraging widely accepted in Poland bank and mObywatel authorisation

The Electronic Communications Law is coming!

The long-awaited Electronic Communications Law has been passed by the Sejm and the Senate and signed by the President, so the time of vacatio legis has inexorably begun to run and soon the PKE will enter into force, changing the reality of both structural operators, MVNOs, and subscribers. The Act completely replaces the existing Telecommunications Law, while being an implementation of the EECC (European Electronic Communications Code). There are a lot of changes in the law itself, but not all of them have a direct impact on end users. Today we will focus on those changes that have a direct impact on customers.

Electronic Communications Law and Telecommunications Law

The Telecommunications Law adopted in 2004, after 20 years of operation, has been replaced by more up-to-date and adapted to real conditions provisions contained in the Electronic Communications Law. At the same time, harmonizing the Polish telecommunications market with the European Union regulations. Some of the changes have already appeared before (as part of the COVID shields) and are repeated in the Act, some are new and will come into force from November (although the restriction on concluding contracts longer than 24 months came into force 7 days after signing the Act).

One of the most important differences is the extension of the definition of a consumer in many articles of the law. The legislator also grants some of the rights to which consumers are entitled to micro-entrepreneurs, small entrepreneurs and non-governmental organisations. This direction is consistent with the amendment to the Civil Code and the Consumer Rights Act of 2019. The purpose of such a regulation of the PKE is to extend additional rights to those entrepreneurs whose activities are not focused on the telecommunications market or do not have sufficient resources to perform a typical contract for the provision of electronic communication services with an entrepreneur.

It is worth noting that the PKE is not a revolutionary amendment, but rather an evolutionary attempt to organize and adapt the legal system of the telecommunications market in Poland to current market requirements, taking into account the EECC regulations.

Right of withdrawal and termination in documentary form

In a situation where a telecommunications operator enables the signing or annex of a contract for the provision of telecommunications services in a documental form, it is obliged to enable the customer to give notice of termination or make a declaration of intent to withdraw from the concluded agreement also in a documentary form (i.e. for example, during a recorded conversation with a customer service employee or by e-mail or text message).

In addition, PKE obliges a telecommunications operator operating in the area of non-geographic numbers to inform the customer within a maximum of one business day of accepting the declaration of intent by means of a text message and sending a message to the subscriber’s e-mail address, if this address is provided in the contract.

At the same time, the telecom is obliged to send information about the acceptance of the statement containing detailed information such as the name of the terminated service, the date of termination and the date of entry into force within a maximum of 14 days on a durable medium (i.e. probably in practice by e-mail). This change has already been implemented into the Telecommunications Law through the Anti-Crisis Shield 3.0, and in the PKE it already appears along with other regulations.

Refund of pre-paid funds after the end of the service

The new Electronic Communications Law obliges the telecommunications operator to return the funds paid in the form of top-ups (in pre-paid and subscription offers) at the subscriber’s request. What is more, the subscriber can indicate what form of refund he prefers (among the available options, the minimum is a transfer to a bank account). When making a refund, the Operator has the right to deduct a fee adequate to the cost incurred. The Subscriber has the right to apply for a refund for a period of 6 months from the termination of the provision of services by the operator. If the subscriber does not submit such an application, the operator is obliged to transfer all remaining funds from top-ups to which the subscriber’s entitlement expired in the previous calendar year (in net value) to a separate bank account of UKE by 30 April of the following year, and the transferred funds will constitute the revenue of the National Health Fund.

The purpose of these funds is to finance or co-finance health care services in the field of prevention and treatment of children and adolescents addicted to digital technologies.

This change was probably intended to curb certain market practices used by some of the operators to make it more difficult for customers to recover paid and unused pre-paid funds.

Restrictions on the possibility of concluding contracts for electronic communication services outside the company's premises

The legislator, following the provisions set out in the Consumer Rights Act, in order to eliminate the risk of abuse by telecommunications undertakings, seeks to limit the possibility of concluding contracts outside the business premises at the consumer’s place of residence or habitual stay during an unscheduled visit. In the explanatory memorandum to the draft provision, the legislator directly points out that there have been numerous cases of misleading consumers in the past and that the problem has been signalled in the past by the President of UKE and the President of UOKiK.

Pre-contractual information and a concise summary of the contract

The Electronic Communications Law introduces additional obligations for operators, obliging them to provide basic information about the contract before signing it and to provide a concise summary of the contract.

Before the contract is signed, the operator is obliged to provide the customer with a set of information describing the parameters of the contract on a durable medium (e.g. via e-mail). This applies to both commercial information such as the duration of the contract, price conditions, possible additional costs and technical parameters of the service (e.g. minimum levels of service quality).

The legislator provides for an exception to this rule for pre-paid services, where in the explanatory memorandum to the Act, it clearly indicates that the dominant form of sales of pre-paid cards (small packages) prevents the rational implementation of this obligation. Therefore, the operator was obliged to instruct the subscriber about the need to download pre-contractual information and keep it on a durable medium for evidence purposes. The above rule also applies to exceptional situations in which the operator is not able to fulfil the obligation to deliver documents before signing the contract on a durable medium.

At the same time, telecommunications operators were obliged to deliver an additional document in the process of concluding the agreement, which is a concise summary of the agreement. The implementation of this provision is a direct consequence of paragraph 3 of Article 102 of the EECC, where the European Union Commission was obliged to prepare a uniform form for all Member States. A template for such a form was established by the EC in December 2019 and is used directly from the EC regulation (therefore it does not appear in the draft PKE).

These changes are intended to enable the customer to make an informed decision and to facilitate the comparison of offers between operators.

Prepaid Services Agreement

The legislator decided to explicitly define the contract for the provision of electronic communication services for prepaid services.

Until now, in Article 56 of the PT, the contract for the provision of prepaid services was mentioned by the legislator as exemptions from the obligations imposed on the operator (e.g. with regard to the paper agreement, electronic or document form for the contract). In the PKE, the contract for the provision of electronic communication services for prepaid services is explicitly defined and its obligatory scope and the obligations of the operator are explicitly defined.

The operator is obliged to inform the subscriber about the phone number assigned to the SIM card he is buying. All other information indicated in the catalogue is required by the operator to be placed on the website and allowed to download this information by the subscriber.

In addition, it was indicated that the subscriber has the right to indicate to the operator a correspondence address, e-mail address or indicate another means of electronic communication (if the operator allows the use of such a means) in order to provide the information indicated in the Act.

At the same time, the legislator obliges the telecommunications operator to inform about the rights under Article 331(1) of the PKE (i.e. the return of pre-paid funds after the end of the provision of services) by text message (SMS) immediately after the start of the provision of services.

Extension of the catalog of customer authorization methods

The legislator, in line with the expectations of the market and operators, expands the catalogue of ways in which the operator can confirm the identity of the customer before the provision of services.

In 2016, as a result of the implementation of Article 43 of the Act of 10 June 2016 on anti-terrorist activities, Article 60b was added to the PT, imposing on the operator the obligation to confirm the subscriber’s data before the commencement of the provision of services. The legislator has demonstrated the scope of data subject to verification by the operator and the ways in which such authorization can be made. While the scope of verification does not change in the PKE, the Electronic Communications Law significantly expands the ways in which authorization can be made, the verification of an identity card, confirmation with a qualified signature and electronic identification means used for authentication in the ICT system of a domestic bank, have been supplemented with m.in mObywatel application and Trusted Signature.

Such an expansion of the catalogue will allow operators to develop solutions for concluding a contract for the provision of electronic communication services in a document form. At the same time, it should be noted that increasing the possible methods of customer verification is not obligatory for operators, but only gives such a possibility.

Impact on MVNO’s on MVNE.PL

While designing and building our systems and processes we already worked with the draft of the new regulation to ensure 100% compliance with the law. We got all points covered for all our upcoming deployments.

Sebastian Kowalczyk

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Telecom market in Poland in 2023

Sebastian Kowalczyk — Mon, 02 Sep 2024 17:01:22 +0000

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Telecom market in Poland in 2023

In 2023, 143 operators offered mobile telecommunications services in Poland – surprised? The telecommunications market was dominated by the 4 largest telecommunications operators, accounting for 96.7% of the market, these are: Play (30.1%), Orange (26.6%), Plus (20.3%) and T-Mobile (19.7%). The remaining 139 operators had to share a market share of 3.3% (and none of them exceeded 1%), which means 1.7 million SIM cards for MVNOs.

The Telecom market and SIM card penetration

According to data from the Central Statistical Office, at the end of 2023, there were 36.7 million people living in Poland, and how many SIM cards were there? 52.4 million. This share of cards means a penetration of 137.8%, and there are almost 1.4 SIM cards per Pole on average. In addition, there are 7.7 million SIM cards in m2m (machine to machine) traffic on the market.

Penetracja rynku kartami SIM w latach 2019-2023

The chart above shows the change in SIM card market penetration in recent years, with a clear increase from 2019 to 2022 of almost 11 percentage points and some stabilization in the last year. And how has the number of SIM cards on the market changed during this time? It increased by 4 million to 54.4 million in 2023. The number of m2m cards also increased from 3.8 million in 2019 to 7.7 in 2023. It is clear that the telecommunications market in Poland is characterized by strong growth in the m2m area (in line with global trends).

Share of subscription post-paid and pre-paid services

The Polish telecommunications market is dominated by subscription services (so-called post-paid). Their market share increased even more after the implementation of the anti-terrorism act, which introduced mandatory registration of SIM cards. While before the entry into force of the SIM card registration obligation, the share of pre-paid services in the telecommunications market in Poland was close to half and oscillated around 43.2%, after the implementation of the provisions of the anti-terrorism act, the share of pre-paid services fell below 30% and in 2023 amounted to 25.9%. Recent years have shown an upward trend for subscription services, slowly approaching 3/4 of the share in the telecommunications market.

Udział usług abonamentowych i przedpłaconych na rynku w latach 2016-2023

Telecom market - operator participation

At the beginning of the entry, we presented the shares of individual operators based on the number of SIMs. The quantities are different based on the value of revenues. Here, virtual operators reduce their share to 2.1% (i.e. 1.2 percentage points less than in terms of quantity).

Udział operatorów w rynku w Polsce w 2023 roku w ujęciu ilościowym

Udział operatorów w rynku w Polsce w 2023 roku w ujęciu przychodowym

Wyraźnie widać, że w ujęciu przychodowym zmienia się również kolejność operatorów pod względem udziału w rynku: Orange, Plus, T-Mobile oraz Play przed pozostałymi operatorami (MVNO). W ten sposób Play z 1. miejsca w ujęciu ilościowym, przesuwa się na 4. miejsce udziału w rynku w ujęciu przychodowym.

Średni przychód na użytkownika

Jednym z najważniejszych wskaźników obserwowanych na rynkach telekomunikacyjnych jest średni miesięczny przychód na użytkownika (tzw. ARPU – average revenue per user). Polska już od kilku lat zajmuje ostatnie miejsce pod względem ARPU w krajach Unii Europejskiej, co oznacza, że w Polsce płacimy najmniej za usługi telekomunikacyjne wśród wszystkich krajów Wspólnoty.

Średni miesięczny przychód na użytkownika (ARPU) w latach 2016-2023

Patrząc na ARPU z perspektywny lat 2016-2023 w wartościach nominalnych (czyli bez uwzględnienia inflacji) obserwujemy wyraźny trend spadkowy średniego miesięcznego przychodu na użytkownika do 2019 roku i dynamiczny wzrost od 2019 roku. Jednak należy zwrócić uwagę, że ciężko porównywać wartość 26,30 zł z 2016 roku z wartością 24,20 zł w 2023 roku. Rodzi się też pytanie, czy zmiana ceny między 2022, a 2023 rokiem o 90 groszy, jest w stanie zrekompensować 11,4% inflacji?

Średni miesięczny przychód na użytkownika (ARPU) w latach 2016-2023 z uwzględnieniem inflacji

Powyższy wykres przedstawia średni miesięczny przychód na użytkownika (ARPU) w latach 2016-2023, zarówno w wartościach nominalnych (bez uwzględnienia inflacji), jak i skorygowanych o inflację według danych GUS. O ile wartości do 2019 roku, zarówno nominalne jak i skorygowane, wykazują trend spadkowy, wartości średniego miesięcznego przychodu na użytkownika to wartości nominalne wykazują ogólny trend wzrostowy od 2019 roku, osiągając wartość 24,2 zł w 2023 roku. Po uwzględnieniu inflacji, rzeczywista wartość ARPU wykazuje trend spadkowy, co wskazuje na deprecjację siły nabywczej pieniądza. A to oznacza, że wzrosty wartości nominalnej ARPU w ostatnich latach są za niskie, żeby doprowadzić do realnego wzrostu średniego przychodu na użytkownika.

Analizę opracowaliśmy w oparciu o raporty o stanie rynku telekomunikacyjnego w Polsce za lata: 2019, 2020 oraz 2023.

Sebastian Kowalczyk

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What is a MVNO?

Sebastian Kowalczyk — Mon, 02 Sep 2024 14:36:40 +0000

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What is a MVNOs?

In the world of telecommunications, the term MVNO is becoming increasingly popular, reaching a market share of 40% in some countries. But what exactly does this acronym stand for and what exactly is an MVNO? If you are not an expert in this field, this post is for you!

MVNO, means Mobile Virtual Network Operator

MVNO is an acronym for “Mobile Virtual Network Operator”. Unlike traditional operators (such as Orange, T-Mobile, P4 or Plus), a virtual operator does not have its own network infrastructure. Instead, it rents it from existing structural operators to offer its own telecommunications services under its own brand and with its own offer. This means that an MVNO can provide services such as voice calls, video calls, SMS and MMS, or data transmission without the need to build telecommunications towers or base stations. In some models, also without the need to invest in many expensive elements of telecommunications systems.

How does a mobile virtual network operator work?

MVNO operates on the basis of agreements with structural operators (MNOs), who provide their telecommunications infrastructure in exchange for a wholesale fee. Thanks to this, such an operator can offer its services to customers under its own brand, often with different price offers or additional services. The offers of virtual operators can differ significantly from those offered by infrastructure operators. MNOs (Mobile Network Operators), or structural operators, often direct their offer to the entire market, rarely opting for dedicated offers.

For example, a virtual operator can focus on a specific market segment. Offering cheaper tariff plans, special services for international calls, or unique offers for specific social groups. Very often, you can find dedicated offers for students, seniors, or immigrants.

Why should a end-user choose a virtual operator's offer?

Choosing a virtual operator’s offer instead of a structured operator’s offer can have several benefits for the subscriber:

Flexibility: Virtual operators often offer more flexible tariff plans. An example would be a subscription, without long-term commitments. This solution can be attractive for people who do not want to be bound by a long-term contract, but want to use a good and attractive offer.
Better prices: MVNOs often offer competitive prices because they do not have to invest in expensive infrastructure, and only bear the wholesale cost, which is known to them in advance. Thanks to this, they can focus on providing more advantageous offers to customers, and not calculating high margins.
Unique offers: Many virtual operators specialize in specific services or market segments. Examples include attractive rates for international calls or packages tailored to the needs of a specific customer group.

Myth: MVNOs provide worse services than MNOs

Since MVNOs use another operator’s infrastructure, the quality of connections and network coverage are closely linked to the quality of services provided by that operator. There is a myth among potential customers of virtual operators that in some cases MVNOs may have lower priority in accessing the network compared to the operator’s main customers, which may affect the speed of the internet or the quality of connections. This is completely untrue. According to the applicable regulations, structural operators cannot offer lower quality services to MVNO end users. The exception is when the MVNO deliberately orders lower quality services, e.g. bypassing 5G! We will return to anti-discrimination regulations in the next posts.

Summary

MVNOs are an excellent alternative to traditional mobile operators, often offering cheaper and more flexible options. Virtual operators use the same infrastructure as MNOs, which allows them to provide the same quality of service. For entrepreneurs, MVNOs can be a tool for building competitive advantages, increasing revenue and building brand awareness among customers.

Sebastian Kowalczyk

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MVNO Market in Poland

Sebastian Kowalczyk — Mon, 02 Sep 2024 14:24:04 +0000

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MVNO Market in Poland

As we mentioned in the previous post, the MVNO market in Poland is not very saturated and clearly lags behind other European countries. Despite the lack of formal barriers, launching your own mobile virtual network operator in the current market model required significant financial and time investments (not to mention the knowledge needed to operate on a complex regulated market). This probably directly contributed to several spectacular failures and a small number of real successes on the MVNO market in Poland.

MVNOs and subbrands

Let’s start by highlighting the differences between two often confused business models. MVNOs and subbrands are two different approaches in the telecommunications sector that aim to reach different market segments, and are often confused and identified with each other. MVNOs rent network infrastructure from large operators such as P4 or Polkomtel and offer their services under their own brand. Subbrands, on the other hand, are created by leading telecommunications companies as separate brands aimed at specific customer groups. For example, the Heyah brand is a subbrand of T-Mobile, aimed mainly at the younger generation of users. Miś Plusha allows Plus to reach young recipients, and Orange uses the Nju Mobile subbrand to acquire customers looking for simple and flexible telecommunications offers. Subbrands allow large operators to diversify their offer and better adapt to the needs of different market segments without having to create new infrastructure.

One of the main differences between MVNOs and subbrands is the method of management and operational independence. MVNOs operate as independent entities that have greater freedom in shaping their offers and marketing strategies. Subbrands, on the other hand, are closely linked to parent companies and use their resources and support. An interesting example of a subbrand is undoubtedly Orange Flex, which, through the management of services through an application and a subscription model, was to be an alternative to the classic Orange offer. There are well-known stories on the Polish telecommunications market when independent MVNOs became de facto subbrands as a result of taking control of the MVNO’s capital, e.g. in 2021 Polkomtel took over Premium Mobile, and in 2020 P4 purchased 100% of the shares in Virgin Mobile.

A short, but turbulent history of the MVNO market in Poland

The Polish MVNO market begins with the appearance of the first MVNO projects in December 2006 (mBank Mobile) and a truly crazy market share of 0.12% at the end of 2007. Since 2010, the MVNO share began to exceed 1% and gradually grew, despite the fact that at the very beginning in 2009-2012 7 MVNO operators ceased their operations. The share of virtual operators in the telecommunications market in Poland has never exceeded 5% and has stabilized at 3-4%.

Udział MVNO w rynku w latach 2016-2023 wg ilości użytkowników

This situation was certainly not made easier by the lack of wholesale operators enabling the launch of full-fledged MVNOs, without the need for time-consuming and cost-intensive integration with structural operators in traditional models. And although the MVNO market was dominated by ISPs (Internet Service Providers), i.e. providers of internet to (mainly) residential premises, some MVNOs found their niches (such as FM Mobile or VikingMobile). However, looking at the long list of failures and the short list of successes, it must be admitted that the history of the virtual operator market was difficult even for projects that seemed to be a good basis for increasing the share of MVNOs in the telecommunications market in Poland (such as MyAvon, Carrefour Mova or GaduAIR) and seemed to define and hit their niches well.

What does it look like now?

The MVNO market in Poland is represented by 139 MVNOs (at the end of 2023), of which in 2023 there were 37 that acquired more than 100 numbers transferred from other networks and 17 that exceeded 1000 numbers transferred from other operators. Although the number of MVNOs has undoubtedly increased compared to the number of MVNOs at the end of the previous decade, the MVNO market in Poland still has a low share compared to other countries in Europe and the world, where this part of the telecommunications market has managed to achieve success.

Operatorzy MVNO z ponad 1000 numerów przeniesionych w 2023 roku

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The MVNO market in Poland is showing increasing dynamics, as confirmed by the number of numbers transferred to MVNO operators such as VikingCo, Vectra or CANAL+. The vast majority of these operators provide combined services, offering not only telecommunications services, but also internet, cable TV or other digital solutions. Such a business model allows for better adjustment of the offer to customer needs and increased competitiveness on the market, but these are only examples of using synergies. It is worth noting that MVNO operators are successfully attracting customers, which indicates growing consumer confidence in their services. The future of the MVNO market in Poland looks promising, with great potential for further development and strengthening its position on the telecommunications market.

Opportunities for the MVNO market in Poland

The MVNO market in Poland has many promising prospects ahead of it, which can contribute to its dynamic development. One of the main factors contributing to this is the growing demand for flexible and affordable telecommunications services, especially among younger consumers and small and medium-sized enterprises. MVNOs can effectively fill this niche by offering competitive prices and personalized tariff plans.

The introduction of new technologies, such as 5G, creates additional opportunities for MVNOs, enabling them to offer advanced services, such as fast mobile internet, IoT and cloud-based solutions. Additionally, thanks to the development of MVNE.PL, the risks and complications associated with traditional solutions operating on the market disappear.

Thanks to lower operating costs and more flexible business models in MVNE solutions, MVNOs can respond faster to changing market needs compared to traditional operators. In addition, MVNE.PL’s cooperation with large operators who provide their network infrastructure allows MVNOs to offer high-quality services without having to invest in their own network.

In summary, the MVNO market in Poland has many development opportunities ahead of it, thanks to the growing demand for flexible services, the introduction of new technologies and favorable regulations. MVNOs can play a key role in shaping the future of the telecommunications market, providing innovative solutions and competitive offers for Polish consumers, following the example of other European countries. Virtual operators can also support Polish entrepreneurs, allowing them to develop their business by enriching it with telecommunications services.

Sebastian Kowalczyk

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