\Orange PL telco expects around 2 pct EBITDAaL growth in H2 2025 (interview)

"We are satisfied with the results of the second quarter, especially with the commercial growth. When we look at 86,000 mobile customer connections, nearly 40,000 new fibre optic customers and over 20,000 convergent services, we can be very confident about further growth in the future," Jacek Kunicki told PAP Biznes.

"If we combine this with ARPU growth, which is around 5 percent for convergence and just over 4.5 percent for fixed-line internet access, we can see what drove us in the previous quarter. We also achieved good results in the prepaid segment. However, we are at the beginning of implementing our new Lead The Future strategy and are just getting started," he added.

When publishing its financial report for the second quarter, Orange Polska maintained its market forecasts. These indicated low single-digit growth in revenues and EBITDAal, as well as eCapex (economic capital expenditure) in the range of PLN 1.8-1.9 billion (EUR 423-446 mln) in 2025.

"It would not be surprising if we achieved EBITDAaL growth of around 2 percent in the second half of 2025. It should be remembered that the comparative base for the third quarter is slightly higher, as it was very strong in 2024," Orange's CFO pointed out.

"We also need to monitor less repeatable ICT services and the margin we will achieve from them in both the third and fourth quarters," he added.

In her commentary on the second quarter results, Orange Polska's CEO Liudmila Climoc pointed out that the company sees growing potential for IT and integration services for the defence sector, which results from future growth in defence industry spending.

"In the field of defence, stable communication and its reliability are of utmost importance. We are talking about mobile network, network solutions and data transmission, which are the basis for the proper functioning of all systems. We want to build services on these foundations, because both cybersecurity and ICT offerings are our strengths," Kunicki explained.

He added that Orange sees potential in security services, but any growth forecasts for this segment will only be possible once defence funds have been allocated.

In addition, Orange is also focusing on increasing its coverage.

"The strategy for increasing coverage is based on several elements. We are mainly focusing on partnerships with infrastructure operators – a key partner is Swiatlowod Inwestycje, in which we have a 50 percent stake, and which has just announced a new investment programme," Kunicki said.

"Acquisitions of small operators are one of the elements of our Lead The Future strategy, in which we want to continue to dynamically develop the coverage of our fibre optic services. Over the last four years, we have had eight transactions, buying a dozen or so local operators and thus increasing our coverage by approximately 200,000 households," he added.

Orange's CFO pointed out that smaller entities do not achieve the scale they would like to have, they do not provide convergent services, for example, and this is very important for retail customers. However, this is not the main focus of Orange's strategy, which concentrates on systematically increasing coverage.

"We are seeing consolidation trends in many European markets. The media are currently wondering what will happen to the French operator SFR. In our opinion, consolidation in overly fragmented markets in Europe is an inevitable process aimed at rationalising capital expenditure and capital allocation. If we build too many parallel infrastructures, it will be inefficient and costly," Kunicki assessed.

"Let's remember that European operators are competing for capital with operators from the US and Asia, who, thanks to their economies of scale and fewer overlapping networks, are simply able to generate greater profitability and better cost efficiency, which is what it all comes down to. Consolidation is essential for us to be competitive," he explained.

The CFO of Orange Polska also assessed that telecommunications operators must spend more on research and development in order to be more innovative than before. Thanks to this approach, they will be able to better compete with rivals from outside Europe.

ORANGE POLAND TO ALLOCATE AROUND PLN 2 BILLION (EUR 470 MLN) TO INVESTMENTS IN THE MOBILE NETWORK BETWEEN 2025 AND 2028

"When it comes to the expansion of the 5G network, we are focusing on rolling it out as quickly as possible. This will consume a significant portion of our capital expenditure," Kunicki told PAP Biznes.

"We plan to invest approximately PLN 2 billion in the mobile network between 2025 and 2028, of which approximately PLN 1 billion will be spent on 5G technology," he added.

The CFO also pointed out that the radio network was last significantly modernised during the development of the 4G network.

"In the development of the 5G network, not only was the recent sale of the 700 MHz band important, but above all the C band. Thanks to this, we were able to start the modernisation, which is now very advanced," he noted.

"Now we need to increase the number of base stations that can use the C band and the 700 MHz band. This is the basis of our investment plan for the coming years," Orange's CFO added.

He pointed out that development of the 700 MHz network will provide faster mobile internet in areas not covered by fibre optics.

"Over time, we will also want to focus on solutions in which we will be able to allocate small parts of the band to specific solutions, whether sectoral or even those related to mass events," Kunicki said.

"The point is to be able to dynamically allocate the band and use it when it is needed," he added.

In addition, Orange is increasingly focusing on private 5G networks, which are mainly intended for business customers.

"We are talking about geographically limited solutions for factories or ports, for example. Such a closed network operates faster, more efficiently and more reliably," the CFO said.

Jacek Kunicki assessed that solutions related to private 5G networks have good development prospects.

"Today, our role is definitely to ensure that we increase the number of companies, institutions and organisations that are aware that there is such a thing as campus networks and what they can offer. The potential of this technology is enormous," he told PAP Biznes.

POLAND'S TELECOMMUNICATIONS MARKET HAS GREAT GROWTH POTENTIAL

"We see great potential for market growth. The availability of mobile services and fibre-optic internet access is expanding. New generations will benefit even more from the advantages of the digital economy," CFO Kunicki said.

"The Polish market has the potential for growth in value because we are developing rapidly as a country and becoming wealthier as a society. Telecommunications services and investments strongly support the development of the economy, which drives GDP. The outlook is certainly good," he added.

Furthermore, Kunicki assumed that competition in the telecommunications sector, which is already very competitive, will continue to grow.

"Of course, this varies between different market segments, but competition is strong everywhere. We see this particularly in the B2B market, which is increasingly intertwined with the ICT market, so we are trying to be prepared for this by developing our services in this segment," he explained.

mcb/ han/ ao/