Integrated Report 2018

  • Introduction
    • Message from CEO
    • About the report
  • Company and our stakeholders
    • About our company
    • Our stakeholders
  • Business model and value creation
    • Business model and value creation
    • Key resources
    • Business model
    • External environment
    • Internal environment
  • Strategy
    • Q&A with CEO
    • Our strategy
  • Results
    • Q&A with CFO
    • Outputs & outcomes
    • Financial review
  • Risk
    • Risk management
    • Risk exposure
  • Corporate governance
    • Our approach to corporate governance
    • Our governance structure
    • Governing bodies activities in 2018
  • Selected financial data
  • Appendix
    • GRI table
    • Defining the Reports content
    • Sustainable Development Goals
    • Methodology
    • Glossary
    • Independent Limited Assurance Statement
    • Contact information
Business model and value creation

External environment

Social

Although Poland’s standard of living and employment rate have moved significantly closer to the EU average, a number of challenges remain. At the end of the third quarter, the employment rate stood at 72.8% - still lower than the EU average, although the gap is now less than one percentage point and shrinking.

The rate of unemployment has continued to fall, reaching just 5.8% in December 2018. However, Poland is still facing the problems of a rapidly ageing population and high emigration. The unfavourable demographic trends are already reflected in a decline in the working-age population. The percentage of elderly people in the entire population is expected to grow from 20.9% in 2010 to 58% in 2050, according to the European Commission’s Country Report Poland 2016.

Much progress has recently been made in addressing inequality and poverty. The number of individuals affected by poverty or social exclusion has steadily decreased since 2008. The Gini coefficient of income inequality, which measures the distribution of (equivalised) disposable income across the society, has fallen from almost 0.36 in 2005 to less than 0.30 at the end of 2017, thus moving Poland significantly below the EU28 average. Although this metric has decreased steadily across the last decade, it has gained new momentum in the last two years, as the government has introduced new social transfers and favourable labour regulations.

The increase in the minimum wage, changes in civil contracts and – above all – a huge programme of new social benefits for families (PLN 500 monthly allowance per second and each subsequent child, extended to the first child in case of indigent families, PLN 300 yearly allowance for school starter kits) has radically improved the situation of many vulnerable groups, particularly those of lower social and economic status.

Digital exclusion is one of the factors leading to social exclusion. Internet access is nowadays not only a convenience, but often a precondition of full participation in social, cultural and professional life. According to the Central Statistical Office (in Polish Główny Urząd Statystyczny - GUS), 84.2% of Polish households had access to the internet (and 79.3% had a broadband connection) in 2018. According to the GUS survey “Information Society in Poland in 2018”, the key barriers to broader internet use are lack of motivation (65.7% of non-users) and lack of the relevant skills (51.3%) – although the share of non-users giving these reasons is decreasing. About 17% of households say that for them, the barrier to internet access is financial, while technical provision at the place of residence is almost never an issue. On the other hand, we have observed an interesting new trend: a growing share of people deliberately eschewing the internet, and expressing their aversion to the medium as a main reason for not being connected. This group has grown from 7.3% of non-users in 2015 to almost 12% in 2018.

Use of the internet and modern technologies varies with social and demographic factors, especially age and education. The internet is used by the great majority of young people and very few seniors. Internet use and ICT skills are also correlated to wealth and size of town, though the role of these factors has been declining.

As a telecommunications company, we must respond to the diverse needs of our customers, both the older ones, who are less convinced of the need to adopt new technologies, and the younger ones, who are used to constant online presence and try to keep up with the latest technological trends. Telecommunications expenditure is a permanent component of any household budget, and we try to ensure that each customer, regardless of their income, can find a suitable offer for them and their relatives. Nowadays, it is no longer network access itself but rather the ability to use new technologies wisely and safely which has become a social challenge.