Broadband boom expected in the next 2-3 years By Marek Machowski, During the years 2001-2002 - together with the slowdown of the Polish economy, the Polish IT sector has slowed down to 2-5% in the last years, but still managed to stay on the positive side - as opposed to most European countries (together with EU members) where the IT investments in the years 2001-2002 have decreased substantially, showing in 2003 a 3-4% decrease. Preliminary data for the year 2004 are showing that the situation in the Polish IT market has improved and there are big hopes for better results in 2005. In may 2004 Poland joined the European Union and a big boost in IT investment in public administration sector is expected - being very much needed anyway. As in previous years - in 2002-2004 the biggest spenders on IT technology were the financial sector and telecom operators, including incumbent fixed-line operator TP and all three mobile operators. The biggest IT companies The biggest IT companies operating on Polish market are both the world's leading IT vendors and Polish integrators and distributors. The Top Five in 2004 included HP Poland (No1 after merging with Compaq Poland, now acting mainly as systems integrator), Polish Prokom Polish Prokom (integrator as well, working mainly for central administration and state social security funds) and three volume distributors: Polish Action and two international companies: Polish-German ABC Data/Actebis and Polish subsidiary of international Tech Data. In the leading group we see also two American vendors: the Polish subsidiary of IBM (it is interesting to know that IBM is present in Poland since 1923, long before the computer age!) and Microsoft - the Number 1 software supplier on the Polish market. The Top Ten are closed by another Polish volume distributor Incom Group, Polish integrator ComputerLand and LG Electronics Poland (in the case of LG Electronics only its IT sales were taken into account). The hardware The landscape of PC sales in Poland is very unique as compared to other European countries. The biggest chunk of the more than 1 million PCs sold on the Polish market is supplied not by A-brand international vendors and not even by Bbrand European and big domestic assemblers, but by very small and micro domestic producers, each assembling less than 1 thousand units per year. Those small workshops are buying components from smaller and bigger distributors and supplying the PCs mainly in their closest neighborhood - to small commercial, service and production companies. Those small IT resellers and dealers usually act as the network and software "microintegrators", supplying maintenance services as well and sometimes even basic level IT training for customer's personnel. This outstanding (approx. 60%) marketshare of tiny domestic assemblers in the 2004 has even increased as the share of two biggest Polish B-brand assemblers (in their best years producing approx. 100 thousand a year each) have both their problems and one of them (former No 1. in 2003) went bankrupt in the end of 2003. The biggest A-brand supplier is HP, mainly thanks to Compaq's strong position on Polish market, but in 2003 in Top Ten were only 2 big A-brand vendors all together - HP (No. 3) and Dell (No 5). Another foreign supplier in the leading group was German Vobis, with its PCs assembled in Poland (similarly as DTK, which has its assembly unit in Poland). The two other A-brand PC vendors in 2003 were IBM and Fujitsu Siemens. The situation is different in quick growing notebook market. Approximately 30 percent market-share of the nearly 120 thousand units in 2003 was taken by Toshiba. Number 2 was HP. Amongst the leading vendors we see the mix of other big A-brands (Dell, Fujitsu Siemens, IBM), smaller international vendors (Aristo, Acer, Asus, Gericom) and some Polish companies selling Taiwanese OEM notebooks under their brands (California Access, Action, JTT, Optimus). The monitor market in Poland - both CRT and LCD - is clearly dominated by LG Electronics and Samsung, in both cases No 3. is Holland Philips. In 2003 the LCD market amounted of approx. 10% of the whole monitor market but LCD sales are growing very quickly as opposed to CRTs'. In almost all categories of printers the domination of HP is huge (more than 60% of inkjets, 57 % of laser printers sold in 2002, 40-60% of multifunctional devices) and HP has maintained its leading position in 2004 as well. The others include all know Japanese suppliers and American Lexmark, Korean Samsung being the newcomer to the Polish laser-printer market. For the regulatory (tax) reasons in the last 10 years the very special sector of IT equipment was growing quickly in Poland - the fiscal cash registers and printers. Millions of units were sold, supplied both by the 2-3 big Polish assemblers and know international vendors (i.e. Seiko-Epson, Sharp). The market growth-rate has slowed down now as almost all retailers obliged by the law have their fiscal cash units already (the latest regulation concerned taxi-drivers). Software, IT services, the Internet The application and software market is the mix of domestic and international vendors, but on the sale-volume side clearly dominated by the latter. In the 2004 the biggest Polish software supplier, ComputerLand, was No. 6 - all the top places were occupied by the Polish subsidiaries of world's biggest software vendors: Microsoft, Oracle, SAP, IBM, HP. Traditionally very strong is the position of Novell in Poland, present here from the beginning of 90 (in 2003 Novel Poland was No. 4). The leaders, both Polish and international - in except of Microsoft - are the suppliers of big application systems (banking, MRP/ERP etc.). On other hand the market of the smaller enterprise financial applications is dominated by the big group of middle size Polish software manufacturers. This market grows quite quickly, together with another market with domination of Polish companies - the educational and edutainment multimedia software (the leader is internationally acknowledged yojgn Digital Poland). Some other Polish software manufacturers achieved international successes and prizes in their specific niches - e.g. Logotec Engineering with their CAD, document management and mobile applications. The software and IT services market is still one of the quickest growth areas and has shown the biggest potential for the future. The leaders are some of the companies mentioned already in another areas (HP Poland, Prokom Software, ComputerLand, IBM Poland), known international companies as Accenture, NCR Poland, NextiraOne, Sun Microsystems and the group of middle size, Polish companies (i.e. ComArch, Ster-Projekt, MCX, Wasko). More than ten years after the first connection of Polish universities to world's WWW Net there is an interesting situation on the Polish Internet market. The technology gap of the 1980s and 1990s has been leap-frogged by Poland at the end of the 1990s and the Polish backbone network has been built both by the scientific community and commercial operators at once mainly in ATM/FR and GigabitEthernet technologies. The biggest data transmission operators are TP (incumbent telecomm operator), Tel- Energo (subsidiary of national power-grid) merged last year with Telbank, specialized in data transmission services for banks and Telekomunikacja Kolejowa (data transmission company of national railroads). There are some bigger international carriers present on the Polish market - i.e. TeliaSonera IC, Teleglobe, Telenor Satellite, as well as middle-size: Polish subsidiaries of American and European companies - Crowley Data, Energis, eTel. Some of them are operating both on backbone-network/data transmission and ISP market (e.g. GTS Poland, Crowley Data, Energis). The group of operators of Metropolitan Area Networks for scientific centers and universities are building their independent high-speed Internet network called Pionier. It consists of 2.6 thousand km of optical lines already, connecting 16 centers together and with GEANT European scientific network with a speed of 10 Gbps. This ambitious project is developed in order to connect all Polish universities. Despite the existence of state-of-the-art optical backbone and lot of players on data transmission market the picture of the last mile access for citizens in still not so bright, particularly in the broadband. Mainly due lack of strategy from incumbent telecom operator the market of ADSL access has been frozen for at least 2-3 years and accelerated in the second half of 2003 only, reaching approx. 300 thousand at the end of 2004. The CATV (HFC) broadband access stands for 120 thousand users. They are the main reasons that only 17% of households has an access to Internet - for the majority of Polish "Internauts" still by the means of analogue modem. Anyway the boom in the broadband is expected in the next 2-3 years, despite the fact that one of the inhibitors is the low density of telecom lines in the country (approx. 33%) and high prices of access as compared to the average incomes of the families.