Opportunities and risks
We take advantage of our business opportunities
The most important business opportunities are presented below:
- low penetration of multi-play services, in particular in low-urbanized areas,
- growing importance of convergent services,
- development of the Internet access market in Poland,
- growing market of new technologies and equipment and the resultant increase in access to and consumption of audio-visual content,
- changes in pricing of mobile services,
- growing demand for smartphones and data transmission,
- development of the advertising market in Poland,
- growing importance of thematic channels.
We analyze risks in detail
We understand business risks accompanying our operations. We also analyze the risks in the area of ESG (Environmental, Social, Governance) related to social, employee, environmental issues, respect for human rights and preventing corruption. The most important risks identified by us are as follows:
Risk area | Key risk factors | Polsat Group | Cyfrowy Polsat | Risk management method |
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Operating activities |
Losing the reputation of brands | |||
Operating activities |
Lack of possibility to effectively maintain and upgrade the telecommunication network and offer our customers attractive products and services in the areas threatened by digital exclusion | |||
Operating activities |
Failure to maintain, extend or modify the distribution and sales network | |||
Operating activities |
Insufficient protection of intellectual property rights | |||
Operating activities |
Risk of fraudulent activities by our customers, in particular in relation to telecommunications and pay TV services | |||
Operating activities |
Alleged health risks of wireless communications devices leading to decreased wireless communications usage or increased difficulty in obtaining sites for base stations |
Risk area | Key risk factors | Polsat Group | Cyfrowy Polsat | Risk management method |
---|---|---|---|---|
Operating activities |
Delays or lack of delivery of services, infrastructure or equipment and components from external suppliers | Operational flexibility, agility and independence from external suppliers were the decisive factors behind a decision to establish our own set-top boxes factory in 2007, which now functions within InterPhone Service, a company belonging to our Group. Furthermore, since 2018 a state-of-the-art logistics center has been operating as part of this company which caters to the needs of the entire Group and allows for highly effective and efficient managing of the distribution of products across the entire sales network, taking into account various sales channels and their characteristics. |
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Operating activities |
Network and broadcasting infrastructure, including information and telecommunications technology systems, may be vulnerable to circumstances beyond our control that may disrupt service provision |
Risk area | Key risk factors | Polsat Group | Cyfrowy Polsat | Risk management method |
---|---|---|---|---|
Operating activities |
Losing managerial staff and key employees |
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Operating activities |
Disputes with employees; growth of labor costs | |||
Operating activities |
Accidents of employees and sub-contractors | |||
Operating activities |
Reputation and financial risk in case of bribery and corruption | |||
Market and macroeconomic environment |
Exposure to the effects of regional or global economic slowdown | |||
Legal and regulatory environment |
Risk that the Polish Office of Competition and Consumer Protection (UOKiK) deems the practices we use as limiting competition or violating the Polish competition and consumer protection laws | |||
Legal and regulatory environment |
Unfavorable rulings in administrative or court proceedings | |||
Legal and regulatory environment |
Risk of violation of Polish and EU law regulating our operations on telecommunications, pay TV and television production and broadcasting markets, as well as possible sanctions and fines resulting from such a violation | |||
Legal and regulatory environment |
Risk of violation of personal data protection law or requirements specified by the General Inspector of Personal Data Protection, as well as possible sanctions and fines resulting from such a violation | Na bieżąco monitorujemy proces przetwarzania danych osobowych naszych pracowników, klientów i abonentów oraz weryfikujemy podstawy prawne do realizacji określonych celów biznesowych naszej spółki. |
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Legal and regulatory environment |
Risk of violation of Polish and EU law regulating in particular information obligations of the issuers of securities as well as possible sanctions and fines resulting from such a violation |
Main market trends
Main trends which we believe to be likely to have a material impact on the Group’s development prospects, revenue and profitability before the end of the current financial year include:
- high level of market penetration with services provided by the Group as well as a high level of competitiveness of the markets in which we operate,
- bundling of media and telecommunications services, as well as services from other sectors,
- stabilization of competition on the mobile telephony market, which is reflected by the declining volume of numbers ported by customers between networks,
- growing demand for data transmission and high-speed broadband connectivity,
- growing smartphone penetration among mobile network users,
- growing consumer requirements as regards the advanced functions offered by end-user devices,
- changes of mobile service pricing, coupled with simultaneous increase of the size of data bundles as a result of growing demand for data transmission on smartphones and due to future investments in the 5G standard,
- development of state-of-the-art fixed broadband networks, fiber optic networks in particular (FTTH),
- dynamic development of non-linear video content, distributed via VOD and OTT services, accompanied by growing online ad spending,
- steady increase in users’ willingness to pay for video content online, in particular in case of payments for content on a subscription basis,
- entry of global VOD and OTT players to the Polish market,
- growing cost of TV content production,
- increasing sales of smart-TVs,
- technological changes in provisioning pay TV services as a result, among others, of growing consumer expectations regarding delivery of content in the non-linear model,
- further fragmentation of the television market (growing share of thematic channels in audience and advertising revenue),
- progressing consolidation of the pay TV market, in the cable TV segment,
- consolidation of the telecommunications markets, manifested by acquisitions of local fixed-line operators by larger telecommunications groups,
- ownership changes in the broadcasting and television production market.
Awards as a sign of appreciation
We are pleased that also independent experts notice our efforts. We treat this as the confirmation of the quality of our daily work, also in the area of corporate social responsibility. In the year 2019 we received numerous awards, including:
An award for investor relations
1st place for Cyfrowy Polsat in the survey related to investor relations among WIG30 companies, which was conducted by “PARKIET Stock Exchange and Investors” daily and by the Chamber of Brokerage Houses.
Listed Company of 2018
2nd place for Cyfrowy Polsat in the annual ranking of “Puls Biznesu” business daily in the Investor Relations category. Cyfrowy Polsat was also awarded a distinction in the Main Ranking which includes 120 companies from all the major indexes on the Warsaw Stock Exchange. The competence of the company’s Management Board was also highly appreciated.