P4 plays 3G
2007-03-30
The launch of the fourth mobile network in Poland was anticipated as an event that could start a revolution. P4, which started to offer services under the Play banner on 16 March, had been emphasising that its pricing policy would be aggressive and aimed at winning subscribers from other operators. The prices charged by the company are indeed lower.
Considering the advertising campaign, Play is clearly aiming at young people living in large cities and interested in new technologies.
Prices revealed by the new operator are, on average, lower by 35% than those charged by the existing operators. The actual price per minute might be as low as PLN 0.2, which is 60% less than the lowest prices in tariff plans of Play’s competitors and 50% less than the existing mobile termination rates (MTR). The prices charged by Play do not differ depending on the network to which the subscriber is calling, but on the monthly subscription fee. The offer is competitive for clients who use their mobile phones frequently and often make calls outside their network.
The new mobile network was expected to have focused on multimedia content services. The offer came as a disappointment, as P4 charges PLN 5 per 1 MB of downloaded data, which is five times more than the prices in Era and Plus networks. The operator of Play asserts that the prices for data transmission service will decrease in step with the development of the company’s own infrastructure and building new base stations. The stronger emphasis on multimedia is visible in the price for MMS messages, as the company charges PLN 0.15, which reflects the price for an SMS.
The price lists clearly indicate that P4 considers voice and basic data services (SMS, MMS) as the main area in which, at the moment, it may compete with the existing operators. 
No large-scale migration to Play
It is still too early to conclude to what extent the entrance of Play on the Polish mobile market has been successful. The launch of the new network has not, to date, resulted in large numbers of subscribers abandoning their existing operators to sign up with Play. This may suggest that the case of Heyah, which managed to attract many clients in a short time, will probably not be repeated. The recent launch of Telefonica O2 in Slovakia, which entered the GSM market divided between two established operators and attracted around 100,000 clients in two weeks, suggested that a spectacular and successful entry is possible even on a highly saturated market. Play has not so far followed this example.
The target group for the new network is the most attractive one, but also very difficult, as most of these people already have a mobile phone. There is also no low-end post-paid offer, as the minimal monthly subscription fee is PLN 50 and the operator does not offer cheap pre-paid starter sets either. This limits the number of potential clients who would be interested in Play’s offer.
According to the declarations of company representatives, Play is supposed to have 500,000 clients by the end of 2007. This aim has to be regarded as an optimistic one, considering the fact that the new network is not gaining many clients from the outset. On a positive note, P4 is currently planning to make some adjustments to its offer, particularly in the area of multimedia services, which should help to attract additional customers.
According to long-term forecasts revealed by P4 long before the operator actually commenced its operations, Play network eventually should be able to win as much as a 17-25% share in the Polish mobile market. Assuming that the company most probably would not have 3G coverage for the entire country, this projection seems to be an optimistic one, though not impossible to achieve.
There is no doubt that the emergence of the new operator has resulted in the decrease of prices of mobile services in Poland. Play has been able to offer competitive prices despite being dependent on Polkomtel, whose network it uses for domestic roaming. This may suggest that further price reductions are possible, as P4 is going to develop its own infrastructure. Additionally, an actual possibility of porting mobile numbers should be a piece of good news for the newcomer. The first shots in that war have already been fired and the existing operators have now to respond.
Mateusz Malicki
IT & Telecoms Analyst
PMR Publications
mateusz.malicki@pmrpublications.com
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