Annual Report 2021

Unmatched data connectivity

for households and businesses

Providing best connectivity

Our commitment KPI Performance
To offer best connectivity,
in both mobile and fixed,
regardless of our customers’ location.
Number of households connectable
within our fibre network
Number of HH connectable:

2019: 4.2 m

2020: 5.0 m

2021: 5.9 m

To densify LTE Carrier Aggregation
services while simultaneously
deploying 5G technology.
4G coverage Outdoor:

2019: 99.9%

2020: 99.9%

2021: 99.9%

Indoor:

2019: 96.9%

2020: 97.3%

2021: 97.4%

4G Carrier Aggregation: 87.64%

Connectivity is a vital pillar of our strategy. As the demand grows for greater quantities of data and higher speeds of transmission, investing in the right spread of technologies and maintaining and upgrading our network infrastructure helps to ensure that Orange can continue to attract customers with the promise of fast and reliable services. In 2021 we continued to concentrate our efforts on fibre technology to keep pace with the demand for high-speed broadband, and we improved the quality of our mobile 4G/LTE network to accommodate the explosive growth of mobile data traffic.

A fast, modern and reliable network is a critical factor to success in convergence. Due to great differences in the competitive environment, the technological options related to population density, our market shares and customers’ needs, we use a local approach in our activities, which varies in big cities, medium to small towns and rural areas. In big cities we focus on development of fibre coverage and recovery of market share in fixed broadband by capitalising on our excellent position in the mobile market. In rural areas, mobile technologies, supplemented by fixed ones, are the primary broadband access solution.

We extend the fibre coverage not only by building completely new networks, but also using our previously built network, on which we launch additional fibre coverage for neighbouring households with low effort (coverage density increase), which previously were not covered by fibre access. Such action allows us to better manage our existing resources, improve financial results and increase customer satisfaction.

We use all possible channels of contacts with customers and our subcontractors to improve the quality of provided services, which is reflected in NPS results compared to other operators. We implement modern technologies to monitor orders by customers, contact our service technicians (using a mobile application) and base our activities on modern BI / data solutions.

Anticipating ‘the new normal’ after the COVID-19 pandemic, we have been developing new technical possibilities for our customers, giving them the chance to use our services and fix problems in the self-service mode (or with the remote support of our advisors) – which meets the customers’ demands and is the part of our .Grow strategy.

Since 2015, in line with the previous strategy, we have focused on massive development of FTTH lines. By the end of 2020, we had delivered on our strategic ambition to deploy fibre to 5 million households – almost one-third of all households in Poland. At the end of 2021, over 5.9 million households in 211 Polish cities were connectable with fibre.

We also use the infrastructure of other operators to expand the reach of our fibre services. Where it is technically possible and economically viable, we enter into wholesale agreements with other fibre network operators for the efficient use of the existing infrastructure in the relevant locations. The main benefit is quicker access to the FTTH network. This is in line with the aims of the Cost Directive of the European Commission, which recommends avoiding duplication of the existing facilities. At the end of 2021, we used the infrastructure of over 50 operators for 2.2 million households (including Światłowód-Inwestycje).

In our new .Grow strategy framework, we will further significantly increase the reach of our fibre, which is one of the key drivers of value creation and expansion of convergent services. However, contrary to previous years, we will be more reliant on partnerships, while our own network rollout will be limited to projects implemented within the Digital Poland Operational Programme. One of the key partnerships is the one with Światłowód Inwestycje, which is expected over the next few years to deploy fibre network in low- and mid-competition areas to 1.7 million households.

Orange Polska is Poland’s largest wholesale service provider. The demand for transmission bandwidth is growing, especially for n×1 and n×10 Gbps lines. To meet these needs, Orange Polska has continued to expand nationwide OTN (Optical Transport Network) trunk lines. In 2021, we increased the number of OTN transport nodes, thus expanding the aggregate network capacity from 7 Tbps at the end of 2020 to 10 Tbps at the end of 2021.

Orange Polska is Poland’s sole operator of the network to which all the Emergency Communication Centres (ECCs) are connected – the services answering calls to the emergency numbers 112, 997, 998, 999 and eCall. About 90% of all emergency numbers in Poland (over 500 locations) are connected to Orange Polska’s network. This provides the Company with revenue from alternative operators for emergency call termination on the Orange network, as well as subscription revenue.

The Call Setup Success Rate on the fixed network stood at 98.84% at the end of December 2021, which confirms the very high quality of Orange Polska’s fixed-line services.

At the end of 2021, the number of Orange Polska’s TV customers exceeded 1 million. In August 2021, Orange Polska’s first set-top box based on Android was commercially launched.

Orange was the first operator in Poland to implement a device with ultra-fast Wi-Fi 6 1 Gbps standard. It provides faster and smoother Wi-Fi parametres and responds to the growing demand for the home Wi-Fi network, which is a key factor in customer satisfaction.

In response to rapid growth in data traffic volume, we have steadily increased the number of our base stations and enhanced their capacity. In 2021, our customers got access to a further 219 base stations. LTE coverage for all bands was 99.89% of the population on 98.50% of Poland’s territory at the end of December 2021. Orange Polska provided 4G services via 11,844 base stations. This included 10,220 base stations enabling spectrum aggregation (compared to 9,831 at the end of December 2020).

In January 2021, Orange Polska launched its 5G service in the Dynamic Spectrum Sharing (DSS) mode in the 2100 MHz band in Tricity; subsequently, it was made available in Lublin in June and in Konin in November. Besides these locations, today, our customers can use 5G in Łódź, Cracow, the Upper Silesian conurbation, Poznań, Wrocław, Opole, Częstochowa, Rzeszów, Kielce, Bielsko-Biała and Tychy. At the end of 2021 the number of our 5G DSS base stations stood at 1,727.

We are gradually implementing the LTE-M technology on the 800 MHz band for Internet of Things. LTE-M is currently available nationwide on 10,400 base stations. In the areas where the use of this band is excluded (i.e. in the border areas that require international co-ordination), we use 1800 MHz frequencies. In order to boost the use of the latest technologies we intensively expand our portfolio of 4G/5G mobile terminals at the expense of 2G/3G ones.

Date Geographical Coverage Population Coverage System
31 Dec 2019 98.25% 99.86% All LTE bands
31 Dec 2020 98.43% 99.88% All LTE bands
31 Dec 2021 98.50% 99.89% All LTE bands

Date Geographical Coverage Population Coverage System
31 Dec 2019 85.32% 96.90% All LTE bands
31 Dec 2020 86.33% 97.27% All LTE bands
31 Dec 2021 86.62% 97.41% All LTE bands

Delivering a palette of services adjusted to customer needs

KPI Our commitments Performance
To offer a full palette of services, enriched by non-telco products, to strengthen our position as the unique convergent player in Poland Number of B2C convergent customers 2019: 1,369k

2020: 1,483k

2021: 1,552k

Number of mobile SIM cards 2019: 15,284k

2020: 15,752k

2021: 16,800k

Number of mobile handset SIM cards 2019: 7,748k

2020: 8,095k

2021: 8,424k

Number of mobile pre-paid SIM cards 2019: 5,047k

2020: 4,860k

2021: 4,953k

Number of fixed retail broadband customers 2019: 2,607k

2020: 2,702k

2021: 2,746k

Number of fibre retail customers 2019: 520k

2020: 725k

2021: 945k

Number of fibre wholesale customers 2019: 5k

2020: 26k

2021: 53k

Convergence penetration in B2C fixed broadband customer base 2019: 62%

2020: 65%

2021: 67%

Number of fixed voice customers 2019: 3,109k

2020: 2,899k

2021: 2,660k

In 2021 our commercial activity remained focused on delivering a package of mobile and fixed services, which we define as convergence. It is our competitive edge, it constitutes a good customer loyalty tool and it allows us to upsell more services, winning a higher share of household media and telecom budgets.

One of the key strategic objectives of Orange Polska is to be the leader in telecommunication services sales to households. Convergence, or sales of mobile and fixed-line service bundles, addresses household telecommunication needs in a comprehensive manner, increasing customer satisfaction and reducing churn (as churn rate is significantly lower than among single service users). It also contributes to revenue growth and increased efficiency of IT and marketing spending. Through our convergent offer we are able to enter new households with our services as well as upsell additional services to households where we are already present.

In 2021, there were no significant changes in our flagship convergent offer, Orange Love. After a surge in sales in the second half of 2020 as a result of the pandemic, customer additions slowed down in 2021. Our B2C convergent customer base increased by 69 thousand (or almost 5%), reaching 1.55 million. It should be noted that saturation of our broadband customer base with convergent services has already reached a significant level (67%). The majority of new mobile and fixed broadband acquisitions are still attained in the convergent bundle formula. Our convergent offer is a major competitive advantage over CATV operators, as they provide no or very limited mobile services. The total number of services provided in the convergence scheme among B2C customers reached 6.2 million, which means that, on average, each convergent residential customer uses more than four Orange services.

Convergent ARPO grew by 5.9% year-on-year, mainly as a result of price increases and a growing share of fibre customers, who generate the highest revenue.

In 2021 we continued our policy of price increases in the ‘more for more’ formula. In each post-paid tariff plan for B2C customers we raised the price by PLN 5, while simultaneously increasing data pools. These pools can be expanded with My Orange application, which is to encourage customers to use digital sales and customer care channels. Furthermore, customers subscribing to two high-end plans have access to 5G technology and can buy the HBO GO service at a reduced price. In our pre-paid portfolio, in June we increased prices of calls and text messages again for customers charged per price lists.

By the end of 2021, Orange Polska had a mobile services base of almost 16.8 million, which is an increase of 6.7% year-on-year. The growth was generated mainly in the post-paid segment, while the number of pre-paid services increased slightly.

In the post-paid services, there were no significant changes in SIM card trends:

  • Volume growth in handset offers (which are of crucial business importance) was over 4%, almost the same as in the previous year, as a result of the consistent implementation of a value-based commercial strategy, concentration on the Orange Love convergent offer in customer acquisition, growing take-up of the Orange Flex offer and strong additions in the business market;
  • The number of mobile broadband services continued to fall due to increased popularity of mobile broadband for fixed use offers as well as growing data packages for smartphones in mobile voice tariff plans;
  • Strong growth in the number of SIM cards related to M2M services (up as much as 34%), owing to the execution of contracts for the delivery of SIM cards for electricity and gas meters as well as solutions for the e-Toll system for road toll collection.

In order to better reflect our commercial strategy, since the beginning of 2018 we have separately presented our convergent mobile customers and those who use mobile services only. Notably, volume growth was achieved in both groups. The growth in the former category is driven by convergent customer base expansion and upsales of additional SIM cards to Orange Love customers, whereas the rebound in the number of non-convergent services (excluding M2M) was driven mainly by a growing business customer base and take-up of the Orange Flex and Nju Mobile brands.

The number of pre-paid services was up 1.9% in 2021, after a decline throughout 2020, which had resulted mainly from lower activations of new pre-paid cards as a consequence of pandemic-related factors, including a decrease in the activity of small businesses, much lower sales to foreign residents and reduced tourism during the summer season.

Blended ARPO (from mobile-only services) amounted to PLN 20.2 in 2021 and was up 3.1% year-on-year. The growth was generated by both post-paid and pre-paid services.

The post-paid ARPO grew 1.6% after a decrease of over 4% in 2020. The improvement resulted from the following factors:

  • Focus on value and related price increases (in line with our ‘more for more’ strategy) in both the consumer market (introduced in May 2019 and May 2021) and the business market (introduced to SOHO customers in November 2018 and February 2020);
  • Lower penetration of mobile broadband in the mobile customer base; as a result, post-paid ARPO is less affected by substantial declines in mobile broadband ARPO (reflecting much lower take-up of this service);
  • Significant recovery of roaming revenues following a slump in 2020 due to pandemic-related restrictions regarding people’s mobility.

Total fixed broadband customer base increased by 44 thousand (or almost 2%) in 2021. It was slower growth than in 2020, particularly its second half, which saw an explosion of demand as the pandemic and the resulting remote-work and remote-learning boom made high-speed Internet access a basic necessity for a great number of households. Fixed broadband growth was driven exclusively by fibre, and our fibre customer base increased by over 220,000, which is more than in 2020.

The strong growth in fibre is driving the technological transformation of our broadband customer base. The share of fibre in the total broadband customer base increased to 34% at the end of 2021 from 27% a year earlier, leaving behind the share of mostly non-competitive ADSL technology, which fell from 30% to 25%.

In line with the revenue reporting layout introduced in 2018, we separate convergent broadband customers (their number being equal to that of convergent customers) from nonconvergent broadband customers. Our non-convergent broadband customer base has continued to shrink as a result of migration to convergence but also due to churn, though at a relatively slow pace since the beginning of 2020. This can be attributed mainly to the roll-out of our fibre network and higher demand for fixed broadband during the COVID-19 pandemic.

Despite a slight decline in customer base, revenues from fixed broadband-only services remained almost flat year-on-year. It is a consequence of an increase of over 2% in broadband ARPO, which rebounded in 2020 after years of decline. This can be attributed to the following factors:

  • Our value strategy; and
  • Growing share of fibre customers, who generate much higher average revenue per user owing to higher penetration of a TV service, growing share of customers from single-family houses (where the service price is higher), and growing share of customers using high-speed options (600 Mbps and 1 Gbps), which are more expensive

Mobile handset customer base (in '000)

Mobile-only handset ARPO (in PLN)

Erosion of the fixed voice customer base (excluding VoIP) totalled 248 thousand in 2021 and was similar to that in 2020. The decline in these services can be attributed mainly to structural demographic factors and the popularity of mobile services with unlimited calls to all networks. It is also a result of our convergence strategy, which stimulates partial migration of customers to VoIP. Average revenue per user was flat at about PLN 37.

Broadband customer base (in '000)

Fibre retail customer base (in '000)

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