Polish Telecoms: It’s telco time!
Sentiment towards Polish Telecoms has rightly improved since the wave of upward repricing of telco offers over the summer. It was the clearest sign of the end of a price pressure era that lasted a decade and shrank mobile ARPUs in Poland right down to ca. EUR 7-8/month, one of the lowest levels in the EU. In an already saturated market, focus on value (ARPU) brings more growth and value creation than a focus on volume (net adds). Growing GDP, low unemployment, rapidly growing wages and generous Govt social programs provide a quite supportive environment for a further ARPU increase. Due to sufficient 3.4-3.8GHz spectrum supply (4x80MHz blocks), its limited usability (regional reservations) and lack of a commercial market for instant 5G spectrum monetization, we do not expect price escalation and assume a total 3.4-3.8GHz budget at PLN 2bn. On the other hand, we see growing cost pressure from salaries, energy and external services. We believe further ARPU increases can more than offset growing costs thus making telcos an interesting investment proposition within an inflationary environment. We prefer commercially efficient, with lean organization, highly cash generative, dividend paying PLY (BUY) and CPS (BUY) over OPL (NEUTRAL) with its still weak cash generation, no dividend and more exposed to increasing cost risks (bigger headcount and wider fixed&mobile network).
Orange Polska SA is a supplier of telecommunications services in Poland. Co. provides services, including fixed-line telecommunication services, Integrated Services Digital Network, voice mail, dial-up and fixed access to the Internet and Voice over Internet Protocol. Co. is one of Poland's three DCS 1800 and GSM 900 mobile telecommunications providers. Co. provides also third generation UMTS services. In addition, Co. provides leased lines, radio-communications and other telecommunications value added services, sells telecommunications equipment, produces electronic phone cards and provides data transmission, telephone directories, multimedia services and various Internet services.
Play Communications SA Formerly known as Play Holdings 2 SARL. Play Communications SA, formerly Play Holdings 2 SARL, is a Luxembourg-based provider of financial investment services. The Company is the owner of mobile operator P4 Sp z o o, that provides a wide range of mobile telecommunications services, including voice, data transmission services, messaging, video service (PLAY NOW), as well as Value Added Services and sales of handsets and other devices, to individual and business subscribers in Poland.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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