Our external environment

Regulatory

General rules

The Polish telecommunications market is subject to wide sector regulation including the one established at EU level and transposed to national legislation. It is supervised by a National Regulatory Authority, the Office of Electronic Communications (UKE). As a general rule the telecom market is divided into separate markets for wholesale and retail services (so-called “relevant markets”). UKE analyses the level of competition within each of these markets and, based on this analysis, decides on the necessary level of regulations. As a former incumbent operator on the fixed services market, Orange Polska is designated an entity with significant market power and is subject to regulations in certain market segments. In particular the Company is obliged to prepare regulatory accounting separation statements and perform cost calculation for LLU and BSA services, which are to be verified by independent auditor annually. As such, this regulatory regime has a significant impact on some of the services we provide. On the mobile market, regulations are equal for Orange Polska and other big market players. Our activities are also subject to supervision by the Office of Competition and Consumer Protection (UOKiK).

Core regulations
Recent trends in regulatory environment

We consider the following regulations to be the most important for our business at the moment:

Access to wholesale broadband services (also known as Bit Stream Access, or BSA) and physical access to last mile infrastructure (Local Loop Unbundling, or LLU) are mandatory under cost orientation obligation (verified by Margin Squeeze/ Price Squeeze tests) and non-discrimination rules (including Chinese Walls), and this legislation covers both fibre and copper lines. Orange Polska is not obliged to provide BSA on fibre and copper infrastructure in 151 deregulated municipalities. LLU is not required in 51 deregulated municipalities. Orange Polska, as other beneficiaries of public funds is also providing wholesale access to its network built within POPC programme based on BSA and LLU as well as access to infrastructure.
Regulation of call termination services. The level of termination rates is established in Delegated Regulation, and the following rates apply:
- The single EU-wide maximum rate for voice call termination on a mobile network (MTR) will be 0.2 cents per minute from 1 January 2024. Since 01.01.2022 MTR was decreased to 0.0252 PLN/min. Next decrease of MTR will be implemented since 01.01.2023 and MTR will decrease to 0.4 ec/min.
- The maximum EU-wide rate for terminating a voice call in a fixed network (FTR) is 0.0032 PLN/min since 01.01.2022.

Obviously, as a business entity we must also comply with administrative decisions and general laws and regulations. Recently the legal environment has been changing dynamically.

Further amendments to telecom rules are pending both at European and national level.

The regulatory regime over the past few years has been evolving toward a policy of balanced intervention. This is mainly related to changes in the structure of the overall telecom market in Poland and a much higher degree of competition in particular segments (e.g. the emergence of cable operators as important players in retail fixed broadband).

In particular, the Office of Electronic Communications (UKE) has issued decisions that will ensure symmetrical access to cable ducts and regulate access to in-house wiring operated by the largest infrastructure owners. The relevant regulatory obligations have been imposed not only on telecom operators, but also on the biggest cable TV operators.

At EU level, the list of markets susceptible for ex ante regulation of significant market players has been limited to two markets: Wholesale local access provided at a fixed location (LLU) and Dedicated capacity (incl. mobile backhaul). The implementation of the EC recommendation requires a new market review and relevant UKE’s decisions.

At national level, there are ongoing legislative works (currently at the government level) on the draft law on national cybersecurity system. This draft law includes inter alia the assessment scheme of the so called high-risk supplier.

Economic

Changes in the Polish economy, such as GDP growth, inflation, unemployment, disposable income, interest rates or foreign exchange rates, can influence our ability to create value. Whilst these areas are outside of our direct control, we can use our hedging strategies to mitigate the potential adverse impact of market movements. The outbreak of COVID-19 pandemic in 2020 affected significantly the global economy. In Poland, within the last two years the business environment is changing rapidly with still active, ongoing pandemic impact. Despite relatively shallow economy recession in Poland in 2020 in comparison to West European countries, in 2021 the economy revived. We believe that Polish economy has good long term prospects ahead despite many uncertainties affecting business environment, including high inflation and energy prices, growing interest rates, supply chain instability, and geopolitical situation, in particular war in the Ukraine.

The pandemic outbreak has dynamically changed the market situation. In 2020, the first recession in Poland from 30 years was noted with GDP decline of -2,5%. The negative economic conditions were related to COVID-19 pandemic and resulted mainly from decline in domestic demand, investments as well as private consumption. Despite ongoing COVID-19 pandemic, in 2021 the economy grew by a very solid 5.7% according to the Central Statistical Office’s early estimates. That was possible mainly by the consumption growth. Consensus predicts that the economy will slow down in 2022-2023 mainly due to much higher inflation, growing interest rates and very unstable geopolitical situation.

Average annual CPI reached 5.1% in 2021, which was the highest level in many years. Inflationary pressures accelerated not only in Poland but also globally, mainly as a result of a rise in raw material prices (gas, energy) and problems with global supply chains. The inflationary pressure in Poland is expected to continue in the upcoming years. According to the current consensus forecast it is expected to exceed 10% in 2022. In March 2022 CPI in Poland came at 10.9%, surprising significantly on the upside, driven by food and energy inflation.

The average monthly disposable income per person amounted to PLN 2,062 in 2021 and grew by a strong 7.5% year-on-year. It has been continuously growing year after year in the past two decades. It represents the money available to a household for spending on goods or services and for savings growth.

Unemployment rate in Poland at the end of 2021 amounted to 5.4% and decreased from 6.3% at the end of 2020. The impact of the outbreak of the COVID-19 pandemic on Poland’s labour market was limited. With the economic recovery after the end of the lockdown period and partial lifting of restrictions in 2020, the demand for labour increased. In 2021, the continued economic recovery coupled with rapidly growing private consumption expenditure resulted in a further increase in the demand for employees; furthermore, workforce shortages and rapidly growing inflation in Poland led to growing pressure on wages. In 2022, in the context of continued economic growth, these trends are expected to continue.

In 2020, in the face of the pandemic, the Polish central bank lowered the reference rate to its historic low of 0.10%. This low interest rate was maintained throughout the first three quarters of 2021. In the fourth quarter, due to rapidly growing inflation, the Monetary Policy Council raised the reference rate to 1.75%. By April 2022 it was increased further to 5.25%. The prospects of much higher inflation (which exceed 10%) are likely to result in further interest rate increases

Foreign exchange rate fluctuations affect Orange Polska’s liabilities denominated in foreign currencies and settlements with foreign operators. However, this influence is greatly contained by a portfolio of hedging instruments held by Orange Polska. In 2021, the Polish zloty lost 1.1% against the euro and 9.7% against the US dollar. Any potential depreciation of the Polish zloty should not influence Orange Polska’s liabilities denominated in foreign currencies or settlements with foreign operators owing to a high hedging ratio.

Telecom market

Polish telecom market at a glance

The Polish telecom market is mature, with high penetration in most segments. This sector is very important for the Polish economy, particularly in the digital age. Together with the IT and content industries, it shapes the information society and actively participates in the transformation of Polish companies. The COVID-19 outbreak in 2020 made the telecom sector more visible than before, as it has significantly accelerated market changes in Poland towards digital solutions.

Network quality was revealed to be essential for everyone, which is why we could observe higher market demand for fixed broadband connectivity, especially fibre services. It also accelerated a digital transformation of Polish enterprises. The telecommunications market is also evolving in terms of technology. Fibre has become the leading fixed broadband technology and we are at the dawn of 5G in mobile. Even though allocation of spectrum dedicated to 5G has been delayed, it is expected to be of key importance in the coming years – especially for the business market. The telco industry faces many business and technical challenges that will require large investments in infrastructure in order to provide individual, public sector and corporate customers with fast and secure internet access (both wired and wireless), as well as new services and equipment to meet new requirements.

The Polish telecom market is characterised by high levels of competition and relative fragmentation. It is mainly driven by mobile services and a high degree of fixed-to-mobile substitution in both voice and data. In the past, these factors have had a critical impact on the overall performance of the market and resulted in the prices of Polish telecom services being among the lowest in the European Union. The market landscape changed significantly in 2019 thanks to mobile operators increasing tariffs in a ‘more for more’ formula. This came as a consequence of the favourable economic situation in Poland in 2019, very low prices of telecom services and the relatively equal market shares among major players. Convergence has become the leading formula to compete for household customers. This triggered acceleration in market consolidation mainly between fixed and mobile players. A need to invest, growing inflation and relatively low prices of telecom services build expectations that the market participants will continue to focus on value generation.

According to our estimates, the value of the Polish telecom market experienced growth in 2019, remained stable in 2020 (the year of the pandemic outbreak), and managed to record solid growth in 2021. This revival is mainly due to the adoption of ‘more for more’ strategies by market participants, the rebound of roaming revenues and equipment sales.

A very high level of price competition in mobile services was exacerbated by several price wars in both the B2C and B2B segments, mainly between 2010-2013. This has led to prices in Poland being among the lowest in the European Union. The key disruptor was Play, a latecomer to the market, which pursued an aggressive strategy to gain market share.
The structural decline of fixed voice services, influenced mainly by rapid proliferation of affordable mobile services, partial regulation of this segment and unfavourable demographic trends.
Underdeveloped fixed broadband infrastructure, especially outside of big cities, which in combination with the rapid development of mobile services and strategies of mobile-only market players resulted in partial fixed-to-mobile substitution. Poland has a much higher penetration of mobile broadband positioned as home Internet access compared to the EU average.
These trends have had a significant impact on Orange Polska compared to the overall market, and this has been reflected in many years of falling revenue. This was mainly due to:
- the need to adjust to high price competition in mobile to defend market shares in both the B2C and B2B segments;
- very significant exposure to fixed voice, as an incumbent operator;
- underperforming the overall market in fixed broadband due to regulations and weak infrastructure in big cities, resulting in the loss of market share to cable operators;
- no significant exposure to the pay-TV market.

Focus on value: Even though the Polish telecom market remains very competitive, all key players have become more focused on value pursuing more-for-more strategies, mainly in mobile. The competition has shifted from being based solely on price to other elements of the offer and quality of customer care. This is mainly driven, on the one hand, by the relatively low prices of telecom services compared to other EU countries and growing disposable income; and on the other hand, by the need of operators to invest in infrastructure and to mitigate cost inflation. Taking into account inflationary challenges, ‘more for more’ strategies seem to be more of a must than an option in order to protect profitability. Prices of telecom services in Poland continue to be among the lowest in the EU. Orange Polska has been the first operator to increase its mobile tariffs, first for B2B customers at the end of 2018, and subsequently for consumers in May 2019. Since then we have been pursuing with more-for-more strategy in all major product categories including convergence, mobile postpaid and pre-paid and fixed broadband. Value creation is at the core of our commercial strategy.
Fixed-Mobile convergence at the core of commercial strategies: Convergence – sales of mobile and fixed-line service bundles – is increasingly recognised by all market players as the household business-winning formula. Over the past few years all mobile players have started to also offer fixed services, while leading fixed operators have entered the mobile market. This is conducted either through wholesale partnerships or though acquisitions. Examples of wholesale partnerships include T-Mobile’s entrance to part of Orange’s fibre network, or the co-operation of Play with cable operator Vectra. Convergence strategies are also facilitated by emerging fibre network operators that provide only wholesale services, for example Światłowód Inwestycje (a JV of Orange Polska and APG) or Fiberhost. Proliferation of the fibre footprint available for all players is also driven by fibre networks built within the EU-sponsored programme Digital Poland (POPC). Orange Polska initiated its highly successful convergence strategy in 2017 introducing Orange Love as our flagship offer for Polish households. By the end of 2021 it had attracted more than 1.5 million customers.
Consolidation mainly triggered by a push towards convergence: The Polish market remains quite fragmented especially among fixed operators. However over the past few years there have been a few consolidation transactions between larger players. Two of the mobile operators – Plus (Cyfrowy Polsat) and Play – acquired the fixed-only companies Netia (the leading alternative fixed-line operator) and UPC (the largest cable company) respectively. Acquisition of UPC by Play is being finalised at the moment with the clearly communicated aim of creating a convergent player. The other significant transaction conducted in the past few years was between two cable companies in which Vectra (the second-largest cable company on the market) acquired Multimedia (the third-largest). 26 About our Group 27 2021 Integrated Report Orange Polska
High demand for fast broadband connectivity, with fibre emerging as the leading technology: The pandemic and overall trend towards digitisation has increased demand for fast connectivity, which has become an essential utility for households. Investments in the fast Internet infrastructure have accelerated in recent years, especially outside of big cities, in areas where the infrastructure has historically been quite weak, causing fixed-to-mobile substitution. FTTH has emerged as the leading technology. This acceleration resulted mainly from Orange Polska’s massive investments in fibre since 2016 and the EU co-funded Digital Poland programme aimed at rolling out infrastructure in less-urban areas. By our estimates at the end of 2021 between 8 and 9 million households in Poland (out of around 15 million in total) were within range of fibre service. Orange Polska is by far the largest fibre operator in Poland. At the end of 2021 its network comprised access to almost 6 million households, of which 2.2 million relied on the networks of other operators. Out of this 2.2 million, more than 0.8 million were accounted for by Światłowód Inwestycje, a JV between Orange and APG, to which Orange contributed access to 0.7 million households within the framework of the transaction. We expect fibre rollout in the country to continue with investments carried on by Światłowód Inwestycje as one of the most important drivers.
Transactions related to infrastructure: In 2021, Cellnex, an infrustracture market player, on the European market, entered the Polish market via acquisition of mobile infrastructure from Play (March of 2021) and Cyfrowy Polsat (July of 2021). Cellnex entered the contract with Play as a majority shareholder in On Tower Poland Sp. z o.o. (Cellnex Poland with 60% of shares, 40% belong to Iliad) and acquired some 7,000 mobile sites for ca. PLN 3.7bn (€800m). In the case of Cyfrowy Polsat the transaction concerned both passive infrastructure c. 7,000 sites) and active infrastructure (c. 37,000 radio carriers; c. 11,300 km of fibre backbone and fibre-to-the-tower backhaul, and a national network of microwave radio links). The transactions value amounted to PLN 7.1bn. Also in 2021, Orange Polska signed an agreement to sell a 50% stake in a joint venture entity operating under the name Światłowód Inwestycje (FiberCo) which will build fibre infrastructure and offer wholesale access services based on FTTH technology. By 2025 FiberCo will aim to build fibre networks to 1.7m households located mainly in low- and mid-competition areas. Orange Polska has contributed 0.7 million households of its current fibre footprint. The transaction valued Światłowód Inwestycje at PLN 2.748 million (on a debt-free, cash-free basis). Orange Polska sold a 50% stake in the joint venture to APG for a total consideration of PLN 1.374 million. Mobile Voice Fixed Voice MBB FBB Pay TV Infrastructure Orange Polska Exatel Platforma Canal+ MVNOs Polsat Plus Group Micro ISPs P4 Vectra UPC Polska Nexera T-Mobile TOYA INEA Area of operation Revenue est. [PLN bn – 2021]: > 3.0 1.0 to 3.0 0.1 to 1.0 < 0.1 LTE for fixed Note: market view as of EoY 2021 Cellnex: new infrastructure player on PL market, w/o revenues in 2021 Main Players on Polish Telco Market – view as of end of 2021
Data consumption booming: Data consumption is on the rise, spurred by the proliferation of mobile devices and the rapid growth of data per customer, the latter being driven mostly by multimedia content and social media. We foresee data consumption continuing to grow at the current pace for at least the next few years while the smartphone revolution continues in Poland. Responding to customer expectations of the best-possible, always-on Internet access requires a convergent approach to connectivity. That is why development of both fixed (FTTH) and mobile networks (4G and 5G) is crucial.
5G at the dawn: 5G as a marketing concept has been present on the Polish market for the past two years but it is so far only offered by operators on the frequencies used for 4G in DSS technology. The auction for so-called C-band (3.4-3.8 GHz spectrum dedicated for 5G) has been very much delayed. 5G is expected to open new opportunities for both consumers and business and should be one of the growth triggers for the market in the years to come. 5G will make mobile data transmission much faster, but more importantly for its future applications it will have much lower latency (the time needed for two devices to communicate) and much bigger capacity (the number of devices that can be connected to the network at once). 4G is not able to handle the constantly growing number of connected objects, all of which are transferring more and more data. From today’s perspective it seems that 5G offers more monetisation opportunities on the business market that will go beyond simple connectivity. 5G will open up a whole array of possibilities to automation processes and to the use of artificial intelligence in various industries – from manufacturing to agriculture. All the devices receive and process data much faster, enabling, for example, the remote steering of manufacturing processes in real time. These processes will function in closed ecosystems often on designated slices of the mobile network. This means much bigger synergies between connectivity and ICT area, and Orange Polska is very well positioned to benefit.
Pay-TV – OTT content is increasingly popular but linear TV is still strong: The pay-TV market should remain relatively stable. Poland still has very strong linear TV. Both Pay TV and OTT are growing markets, with OTT as the growth engine (e.g. initially non-linear services like Netflix, HBO Go, Amazon Prime Videos). The COVID-19 pandemic further accelerated the adoption of OTT services. What’s more, 2021 has reshaped the OTT market as linear OTT content has gained importance. Of course, OTT content is growing fast, but it should remain an add-on to linear TV, rather than a significant substitution factor.

Orange Polska is the leading telecom operator in Poland operating in all market segments. We have the largest customer base in both the fixed and mobile segments as well as the largest share of telecom infrastructure in Poland. Following successful implementation of the Orange.one strategy in 2017-2020, we delivered a turnaround and reshaped our business profile to one suited for growth and positioned to benefit from market opportunities. Essential to the valuecreation plan were heavy investment in the fibre network, pursuing a convergence value strategy and development of the ICT area. Development of business lines with growth prospects, as well as exploring unique market opportunities, were necessary to offset ongoing pressure on our revenues coming from legacy services – which once constituted the core of our operations, and which have been in structural decline for a number of years. At the same time, we were radically transforming our operations to be more agile, digital and flexible, with a strong online presence and highly automated processes. In 2021 we announced the new .Grow strategy that is focused on sustainable growth of revenues and profits, through maximisation of our key growth levers and exploration of new market opportunities.

Supply chain

We aim to build strong, long-term relationships with our suppliers. We want our relations with suppliers and business partners to be based on transparent principles and a mutual obligation to abide by ethical standards.

We take an active part in the implementation of the Orange Group’s global supplier assessment programme, QREDIC. The results of the assessment are used in the process of negotiating with and selecting suppliers at the global level; for example, for subscriber devices or network equipment purchases. A supplier is disqualified if the assessment reveals definite non-compliance with ethical and environmental standards.

At the global level, Orange Group is a founding member of the Joint Audit Co-operation (JAC), an association which groups together telecommunications operators to control, evaluate and develop the implementation of CSR principles by global suppliers of the ICT sector. As of today, there are 18 telecom operators from 16 countries which have joined the JAC initiative. Altogether, JAC represents more than 50% of the industry revenue and more than 2.7 billion connections.

Local suppliers are required to sign up to a compliance clause, which is included in agreements with our Company. The clause includes an obligation to comply with ethical and responsible conduct rules, particularly concerning human rights, environmental protection, sustainable development and anti-corruption. In addition, an anti-corruption clause is included in all purchase agreements. From 2021, suppliers who are in the highest risk groups are asked to complete a CSR questionnaire, which relates to the areas of environmental protection, occupational health and safety, employee rights, diversity, compliance and ethics.

In 2021, we co-operatated with 2,990 suppliers in Poland, including subscriber and network equipment suppliers, network contractors, IT equipment suppliers, personnel outsourcing agencies and media houses. We strive to build our relations with suppliers on the basis of long-term contracts providing for transparent terms of co-operation. Almost 97% of purchases (by value) are executed under long-term framework agreements. We are working towards effecting all payments to suppliers within due time. The timely payment rate is 88.6%. The standard term of payment to suppliers is up to 30 days (93% of agreements).

We follow a competitive and open procurement policy. The transparency of our supplier selection process is ensured by the Procurement Process Code, a set of rules which must be followed by all procurement organisation employees in their direct and indirect contacts with suppliers. The Code includes procurement procedures which transparently regulate supplier selection, contracting and confidentiality. From 2019, the CSR clause was included in the templates of purchase contracts. We are gradually supplementing its implementation also among long-term suppliers who concluded contracts before its introduction. In 2021, 100% of buyers from the procurement department of Orange Polska completed online training dedicated to the main CSR aspects in procurement.

Currently, over 96% of orders (by volume) are placed electronically, via an online procurement tool that automatically analyses submitted offers. Moreover, suppliers who want to co-operate with Orange Polska can register to join a database of potential suppliers, allowing them to participate in the Company’s procurement processes.

Social

Poland’s standard of living has been improving steadily over the years. Despite the COVID-19 pandemic, resulting in lockdowns and restrictions affecting the functioning of companies since 2020, Poland’s economic situation was strong at the end of 2021.

GDP was up 5.7%. The situation in the labour market was also very good. The only major problem was high inflation, as annual CPI reached 8.5% in December 2021 and as much as 10.9% in March 2022. This picture, however, will rapidly evolve in the coming months due to admission by Poland of millions of Ukrainian refugees fleeing the war after February 24, 2022. A large proportion of them will stay in Poland for long, or even permanently, thus greatly affecting the country’s economy, labour market, education, housing market and health care system.

By the end of 2021, Poland’s labour market had successfully tackled the impact of COVID-19 – also compared to the rest of Europe. At the end of 3Q 2021, the employment rate for the 15–64 age group in Poland was 71% (i.e. up 2p.p. year-on-year, but still down 2.6p.p. vs. the start of the pandemic). For the second year in a row it was above EU average, which stood at 69.7% in 2021. At the end of June 2021, the unemployment rate in Poland, as reported by Eurostat, fell to the record low of 2.9%, which was the second lowest figure in Europe (with EU average of 7%).

The problem faced by Poland for years is that the employment rate varies considerably across educational attainment levels and with respect to gender. At the end of 2021, the employment rate in the 20–64 age group was almost 90% for people with tertiary education, but slightly over 71% for people with upper secondary education and only 47% for those with primary or lower secondary education. Women with primary or lower secondary education face a particularly high risk of exclusion from the labour market: only slightly more than 34% of them in the 20–64 age group were in employment. Moreover, loss of jobs during the pandemic was particularly high in this group, especially among younger women.

The Gini coefficient of income inequality, which measures the distribution of equivalised disposable income across the society, fell from almost 35.6 in 2005 to 28.1 in 2020, well below EU average. However, these figures reflect people’s declarations in surveys. Poland’s inequality levels based on tax data might be even 25% higher than the official statistics based on survey data – thus placing Poland among the least equal societies in EU (see Blanchet, Chancel & Gethin, 2019).

Recent years have seen a range of initiatives to eradicate poverty and reduce inequalities in Poland. Since 2015, an increase in the minimum wage, changes in civil-law contracts and – above all – programmes of social benefits for families (PLN 500 monthly allowance per child, PLN 300 yearly allowance for school starter kits) have radically improved the situation of many vulnerable groups, particularly those of lower social and economic status. However, since 2020, the increased inflation has diminished the impact of social transfers, which are not subject to indexation (purchasing power of 500+ has fallen by 13.1% since 2016).

Poland is still facing the challenges of a rapidly ageing population. The unfavourable demographic trends are already reflected in a decline in the working-age population. The problem is compounded by the falling number of births, which decreased by 5% in 2020 and a further 7% in 2021, reaching the lowest level in 15 years.

As the Internet has become the main way of functioning in many fields of life, digital exclusion touching certain social and demographic groups seems an especially urgent problem. According to the Central Statistical Office (GUS), as of 2021 over 92% of Polish households had access to the Internet – a fairly steep rise since 2019, when slightly more than 8 out of 10 households had it. A major improvement in broadband adoption since the start of the pandemic has been seen in rural areas and small towns, nearly closing a digital gap to the biggest cities in this respect.

Nevertheless, use of the Internet and modern technologies still varies with social and demographic factors, especially age, professional activity, and education. The Internet is used by the great majority of young people and very few seniors. Digital divide starts in the 55+ age group, but the most affected group is those aged over 65 – with only 46% of them regularly using the Internet. Education level plays a major role as well, with 98.6% of Poles with tertiary education being regularly online, compared to 78.2% of those with upper secondary education and 71% with primary or lower secondary education. The problem is also greater among unemployed, with nearly 17% of them not using the Internet regularly in 2020.

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.

Human rights

Owing to the nature of our business model and supply chain, we follow the human rights policy formulated at the international level by the Orange Group. In addition to the general framework of the International Labour Organization conventions, the Universal Declaration of Human Rights and the Global Impact Principles, Orange Group complies with the UN Guiding Principles on Business and Human Rights adopted in 2011. The Group’s activities with respect to safeguarding fundamental human rights focus on three main areas:

relations with employees;
relations with suppliers; and
privacy and freedom of expression.

These areas are all addressed in the Orange Polska Code of Ethics. We respect all people and their right to privacy. We accept diversity in terms of background, race, gender, culture, age and marital status as well as religious beliefs, political views and membership of social or professional organisations.

We use a Supplier Code of Conduct at Orange Polska. The Code has been developed at the Orange Group level and adapted to national laws and regulations. It seeks to encourage compliance with these laws and regulations, and ensure that they are faithfully and effectively enforced. Suppliers are required to respect human rights and avoid being complicit in human rights abuses of any kind.

social responsibility: freedom of association and the right to collective bargaining, forced labour, child labour, diversity and non-discrimination, remuneration, working hours, and health and safety;
environmental responsibility: environmental protection, natural resources, and waste management; and
prohibited business practices: anti-corruption policy, competition, sponsorship, political contributions, money laundering, data security, and data protection.

The Code has been published and incorporated into our contracts with suppliers. We are currently working on a human rights policy specific to Orange Polska.

We also launched an e-learning training on human rights that was completed by 100% of the procurement team. Rights related to diversity are covered by our diversity management policy, while privacy and data protection by our customer safety policy.

A separate corporate social responsibility clause is included in all contracts. Pursuant to the clause, the parties undertake to comply with, and ensure that their employees, suppliers and subcontractors comply with all national, European and international rules associated with standards of ethical and responsible behaviour, including standards on human rights, environmental protection, human health and safety, and sustainable development. They also undertake to combat any infringements of human rights and fundamental freedoms, as well as any risks to the health and safety of persons and the environment. In addition, they declare that they will require their employees, suppliers and sub-contractors to refrain from using child labour or forced labour, and shall combat any discrimination. The clause has been included in all new purchasing contracts since 2019.

Human rights have also been referred to in the Orange Polska risk map in the form of the so-called The Vigilance Plan, which has been adopted across the international Orange Group. This plan covers the management of risks related to human health, safety and security, environmental damage and serious violations of human rights or fundamental freedoms.

Orange Polska takes all issues related to human rights very seriously, paying particular attention to the rights to privacy and personal data protection. In order to prevent theft or unauthorised modification or processing of personal data of its customers and employees, or personal data entrusted by Orange Polska, we have implemented security measures consistent with international standards. In addition, we are introducing a process to identify and prevent violation of rights and freedoms of data subjects.

Environmental

Digital technology is used daily by 6 billion people worldwide.

The ICT sector (fixed and mobile networks, Internet of Things (IoT) devices, VPNs, data centres, as well as user devices: smartphones, computers, set-top boxes, etc.) accounts for about 3.6% of global energy footprint and about 1.4% of global CO₂ emissions, and is expected to grow1.

¹⁾ Source: Malmodin and Lundén, Sustainability Journal 2018, International Energy Agency

Orange Polska is sensitive to global challenges related to the natural environment and natural resources. We have set ambitious goals and are taking concrete actions to reduce our environmental impact, both direct and indirect. Our target is to become net zero carbon already by 2040 with respect to our own direct and indirect emissions as well as value chain emissions. This is perfectly aligned with global, science based Orange Group climate objectives that fall in line with Paris Agreement’s target of limiting global warming in the 21st century to below 1.5 degrees vs. the pre-industrial era.

In addition to the efforts we make to reduce the impact of our own operations on the environment, as a provider of telecommunication services we can significantly contribute to reducing the negative impact of business activities of others. Digital technology is now integrated into all sectors of human activity, and developing its sustainable uses is becoming our daily challenge. Moreover, by radically transforming the industrial world, digital technology also creates the potential for more innovative and sustainable solutions to the challenges posed by energy use and ecological damage.

Modern digital technologies are a major tool to solve climate issues. Telecommunication services support green transformation and offer solutions which enable our customers to reduce their carbon footprint. Tele- and videoconferences decrease business travel (especially by plane), while IoT solutions, particularly in the Smart City domain, optimise consumption of resources (e.g. electricity or water) and reduce emissions and pollution thanks to smart management and monitoring systems for municipal services (e.g. utilities supply, city lighting, parking places, city bikes or waste collection).

Use of new technologies is a huge opportunity on the one hand, in terms of economic and social development and finding more ecofriendly solutions; on the other hand, it presents a challenge when it comes to the rapid obsolescence of products and increased demand for energy. It poses a problem about what to do with devices that are no longer wanted and provokes us to think about ecoefficiency inside the Company as well as relations with our suppliers. It also means educating customers and encouraging them to return ICT devices they no longer use. Digital can and should be a part of the solution to the climate emergency, but it also has a clear responsibility of bringing to net zero its emissions across the entire value chain.

Annual Report 2021

Customer care

Our stakeholders