Anna Streżyńska, the President of the Office of Electronic Communications (UKE) and Maciej Witucki, the President of Telekomunikacja Polska SA have signed an agreement which ends the process of laying down new foundations for the functioning of the telecommunications market in Poland. These ground rules are expected to address the most significant problems identified by market players and considerably facilitate the development of fair and effective competition.
The agreement concluded today is a commitment on the part of Telekomunikacja Polska SA to undertake actions intended to improve cooperation between TP and alternative operators, to ensure stable and foreseeable conditions for the functioning of the telecommunications market in Poland and to contribute to the development of this market by investment in modern telecommunications infrastructure. The company is going to lay down at least 1.2 million broadband lines.
Provisions on proper fulfilment of regulatory obligations
Pursuant to the agreement, TP commits itself to properly fulfil all of the regulatory obligations imposed on it. What is more, in order to comply fully with a principle of non-discrimination of alternative operators, the company commits itself to a range of actions to be undertaken to ensure equal treatment of all market participants. Thus, TP, within its structure, is going to single out the unit dealing with the provision of wholesale services which, based on non-discriminatory grounds, will provide these services to both the part of TP responsible for retail operations, to other entities of the TP Group (including PTK Centertel) as well as to alternative operators. Additionally, the incumbent operator is going to regularly submit information on compliance with the non-discrimination principle within its own organization to the President of UKE, by means of custom-made indicators (so called KPI indicators) and by means of quarterly reports by independent auditors.
Next, initiatives meant to ensure equal treatment of all market participants by TP will entail the differentiation of the motivational and bonus programme for the employees involved in provision of wholesale services and for the employees dealing with retail services. The remuneration in the wholesale part of TP will be commensurate with the results of this part only (regardless of the results of the retail part and the results of the entire company) whilst the proper level of the KPI indicators, mentioned above, is maintained. Based on the agreement, TP makes commitments also in the field of the organizational culture of employees involved in provision of wholesale services which provide for proper training on the principle of non-discrimination and the introduction and compliance with a set of rules and practices on the conduct of TP's employees, especially as far as the non-discrimination principle is concerned.
TP commits itself to limit the flow of unlawful information both within the company as well as between the entities of the TP Group. Thanks to the exchange of such information, for instance on the services provided by alternative operators based on TP's infrastructure, the retail part of TP and its dependent entities (PTK Centertel) used to gain a considerable information advantage over alternative operators, thus enabling them to create offers which were more attractive to end-users. The limitation of unlawful information flow, on the one hand is foreseen through separation of the employees involved in the provision of wholesale services from the employees of the retail part and through implementation of the code of good practices. On the other hand, the computer infrastructure and the systems transmitting information within TP are to be separated as well.
As a result of actions to be undertaken by TP, the information systems of the incumbent operator are to function in such a way as to guarantee the transparency of internal organization of TP and the companies within the TP Group as well as equal access to information for all entities. These actions are also intended to prevent the discriminatory flow of unlawful information in the TP Group. Wholesale services will be provided by the wholesale part by means of separated information systems, to which other TP's departments and companies of the TP Group will have no access.
Provisions on rules and conditions for the cooperation between operators
TP is to conclude agreements with telecommunications undertakings according to the procedure and sample agreement forms defined in reference offers. At the same time, the incumbent operator ceases to use agreement forms which do not comply with the sample forms defined in the reference offers and particularly ceases to include in these agreements the clauses and miscellaneous provisions which contradict the sample agreement forms. The fact that TP used to introduce clauses contradictory to reference offers has been one of the main problems, most complained about by alternative operators.
The agreement contains also a large number of other commitments on the part of TP which are expected to ensure transparent conditions for concluding agreements based on non-discrimination between the incumbent and alternative operators. Similarly to the non-discrimination principle, the KPI indicators will also be used with reference to the process of agreement conclusion which will enable the effectiveness and quality assessment of this process. Regardless of the provisions above, the agreement also lists principles of cooperation between the alternative operators and the incumbent which are to facilitate service provision by the incumbent. These include:
Pursuant to this agreement, TP committed itself to conclude separate agreements, as requested by alternative operators, which are to set cooperation conditions between Telekomunikacja Polska SA and other telecommunications entities and limit the range of disputes arising in this field.
Other commitments of TP
Pursuant to this agreement TP commits itself to a goal of construction or modernization of existing infrastructure so that within 3 years at least 1,2 million broadband lines are connected (including 1 million lines of at least 6Mbit/s). Due to a low level of accessibility to and quality of telecommunications services in Poland, this issue is of key importance for the development of knowledge-based society and the creation of competitive and innovative economy.
The agreement also regulates other issues such as the termination of legal disputes between TP and the President of UKE and between TP and alternative operators or the monitoring of fulfilment of the commitments undertaken by Telekomunikacja Polska SA.
The telecommunications market up to now
The President of UKE has been undertaking actions and initiatives leading to the creation and next development of real and effective competition in the Polish telecommunications market. This is how conditions for new telecommunications operators, competitive toward Telekomunikacja Polska SA, were brought about which also resulted in the rise of offer diversity and attractiveness. Still, however, the development of the telecommunications market in Poland does not reflect its potential as well as expectations of consumers.
One of the key issues for alternative entities and their clients is the compliance with the non-discrimination obligation by TP, especially within the scope of access to the infrastructure of the operator with significant market power. Even though such an obligation (to offer access to its infrastructure) was imposed on Telekomunikacja Polska SA, the President of UKE continues to receive complaints on practices discriminating against alternative operators. It proves that TP is not complying with the decisions of the President of UKE. Alternative telecommunications entities are still being discriminated against, which translates itself directly into lower competitiveness of the retail market. This is why Poland ranks last as far as accessibility to and quality of the telecommunications services are concerned.
Having that in mind, the President of UKE in 2008 undertook actions regarding the imposition of functional separation on Telekomunikacja Polska S.A., which is to solve the most important market problems. To avoid such a far-reaching regulatory measure, TP launched negotiations with market participants, meant to improve the cooperation conditions between operators. At the same time, the incumbent operator submitted an action plan leading to eradication of market problems indicated by the regulator.
The President of UKE hopes that the agreement signed today will improve relations between operators and ensure the fulfilment of regulatory obligations imposed on Telekomunikacja Polska S.A. This way a significant improvement in competitiveness will be achieved in the telecommunications market in Poland.
The full text of the agreement is available in the attached file.