Listed ICT companies in 2006
2007-03-30
The majority of companies from the ICT industry listed on the Warsaw Stock Exchange (GPW) increased their revenues and net profits in 2006. The increases could have been more substantial, if the public sector had spent more on IT solutions.
The climate for ICT companies has been good, resulting in a large number of stock market debuts in this area. This trend is likely to continue in 2007, and a number of IT companies are preparing for IPOs.
To be specific, for domestic computer producers and distributors, the Warsaw bourse has recently become a very attractive platform for gathering funds for further investment. Apart from Optimus, which is one of the oldest Polish IT hardware manufacturers and has been stock-listed for quite a long time, Action entered the GPW in 2006 and more companies are about to follow. Among those whose debuts are at hand are NTT System and Pronox Technology.
The major problem in 2006 was a lack of significant IT projects in the public administration sector. Especially, the largest IT companies in Poland complained about stagnation in public sector orders, as for many of them, public bodies are one of the best clients; a lack of contracts in this area has a detrimental effect on those firms’ revenues. Most IT services providers, however, increased their revenues and profits, but with public sector orders, the increases could have been more substantial. Market analysts and the companies expect the climate in this corner of the IT market to improve in 2007, as there are EU funds available that can be used for IT development. This is to be supported by the government plan to spend PLN 2.3bn on this purpose by 2010. The money would constitute the domestic element necessary to receive the EU support.
One of the most important trends observed in the Polish IT market in 2006 was its consolidation. The process is still underway, though some major mergers have already been concluded. These include Asseco Poland joining with Softbank and Infovide merging with Matrix.pl. The merger of ComputerLand and Emax is to be formally concluded (registered by the court) by the end of May. ABG Ster-Projekt is to merge with Spin as well.
In the field of telecommunications, TP SA has recorded a slight increase in revenues, but net profit declined by almost 17%. Revenues grew due to good performance of the mobile part of the group – PTK Centertel, the Orange network operator. The group will probably face a further decline in fixed-line revenues, which will be an effect of the substitution of mobile for fixed-line. The net loss of Netia, an alternative telecommunications operator, was a result, as the company insists, of a reserve that it had to create because of substantial investment in its fixed-line network.
Unlike in the IT sector, most of the key players in the telecommunications market are not listed on the Warsaw Stock Exchange. According to recent press reports, Telefonia Dialog, an alternative telco, might enter the stock exchange, which could happen in 2008. 
In general, the climate for both IT and telecommunications companies should be good in 2007, which would result from the overall positive economic conditions. The most important factor for IT services providers will be the way that the public sector uses the EU funds for improvement of the IT infrastructure. The telecoms will face further market liberalisation as well as the actions taken by the Office of Electronic Communications’ (UKE) to enforce consumer protection. Competition is to grow in the area of internet services provision and mobile telephony as well as a very lucrative segment of fixed-line monthly fees within the TP SA network.
Mateusz Malicki
IT & Telecoms Analyst
PMR Publications
mateusz.malicki@pmrpublications.com
PMR Online Access
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