CYFROWY POLSAT - ANNUAL REPORT 2010

Transcription

CYFROWY POLSAT - ANNUAL REPORT 2010
2 / TABLE OF CONTENTS
INTRODUCTION
1. 2010 Highlights
Major Events
Awards
Letter from the President
of the Supervisory Board
Letter from the President
of the Management Board
Summary of Financial Performance
Key Facts and Figures
BUSINESS
New structure
of the Capital Group
1. Television
Satellite Television
Market Environment
Mission, Vision and Strategy
Our Business
History
Sales and Marketing of Services
Company’s Authorities
Corporate Governance Rules
2. Customers
3. Employees
4. Business Partners
5. Media
Programming Offer
6. Regulators
Broadcasting Center
7. Non-Governmental
Organizations
and Local Communities
Cyfrowy Polsat Technology
FINANCIAL
STATEMENTS
1. Shareholders
and Investors
Our Competitors
Telewizja Polsat
2. Cyfrowy Polsat
Meet Our Company
STAKEHOLDERS
AND
ENVIRONMENT
8. Natural Environment
ADDITIONAL
INFORMATION
2. Internet
Market Environment
Our Competitors
Internet Offer
Brand New Service – LTE
3. Mobile Telephony
Market Environment
Our Competitors
Mobile Telephony Offer
4. Multi-play Operator
1. Glossary of Terms
2. Contact Persons
3 / INTRODUCTION / HIGHLIGHTS 2010
4 / INTRODUCTION / HIGHLIGHTS 2010 / MAJOR EVENTS
Major Events
January
February
March
April
We upgrade our hardware offer
We start off with HSPA+
technology Internet.
We expand our programming offer
with two new channels – FilmBox
and FilmBox HD.
Our subscribers receive yet another
program from the FOX International
Channels portfolio – FOX Life HD.
Our VoD Home Video Rental is
enlarged with the titles provided
by SPI International Poland.
We enrich our Sports Package
with a Polish news station –
Orange Sport Info.
We kick off new promotions,
giving our clients a 3-month full
package for free and an extra
set–top box.
We run our “Cheap Video-onDemand” special, offering movies
at a 25% discount on selected days.
box EchoStar HDS-400E, replacing
the existing model Echostar DSB7200 HD.
We launch F300 Family,
a new set-top box designed
and manufactured in our factory
Cyfrowy Polsat Technology.
We launch three additional TV
channels – Comedy Central, Nat
Geo Wild, and Nat Geo Wild HD.
Our DTH subscribers base reaches
2009, recording a 14% revenue
growth to PLN 1.28 billion and
net earnings of PLN 230 million.
We upgrade our broadband
Internet access: higher data
packages, attractive night-time
tariff, and lower rates for data
transfer during the day.
Animal Planet.
© Animal Planet.
All rights reserved.
May
manufactured in our factory
Cyfrowy Polsat Technology –
HD5000.
Set-top box number 1 million
leaves the production line at
Cyfrowy Polsat Technology.
June
July
August
Our satellite TV offer features
two additional channels:
Discovery Travel & Living and
Animal Planet HD.
We join the group sponsors at the
outdoor summer event “Radio
for You” and visit six cities in the
Masovia region, providing residents with numerous attractions
for the whole family.
We enlarge the Internet data
packages available in our
Multi-play offer.
We launch the Multi-play offer
allowing to buy all of our services
– Television, Internet and Mobile
Telephony – under one contract,
one subscription fee, and one invoice.
We expand our HD package with
AXN HD channel, making its
screen debut in Poland.
The Supervisory Board of Cyfrowy
Polsat appoints Aneta Jaskólska as
a member of our Management Board.
We start with the promotion
“Movie Holidays with VoD”,
of one.
We expand our VoD Home Video
Rental with movies provided by
The Walt Disney Company EMEA.
We stage a cross-promotion with
Invest-Bank – “Account plus VoD”
– whereby clients establishing
a bank account receive three
bonus movies from our V
VoD Home
Video Rental.
Formula 1, Polsat Sport.
© Polsat Sport.
of DTH television subscribers grows
to 3.26 million, while the numbers
of our mobile phone users and
Internet access users reach 41,000
and 10,000, respectively.
Our offering expands with a new
HD set-top box – Sagemcom
320 GB hard disk drive.
September
October
November
December
We broadcast Europa League
matches over our VoD service.
We provide twenty-six channels
free of charge for subscribers to
low-cost TV packages as part of
our “Open Window” campaign.
The Family Package HD is
enriched with a new channel –
FOX HD.
LTE Internet service in 2011 as
Our viewers can enjoy watching
selected Europa League matches for
free over the VoD Home Video Rental.
We start enrolment for the
promotion of LTE Internet, offering
even half a year service for free.
Our “Cheap Video-on-Demand”
promotion is reactivated.
We sign a cooperation agreement
with Mobyland to use their radio
network in the provision of
wireless Internet access based on
HSPA+ and LTE technologies.
We start an SMS service dedicated
to the Polsat Foundation,
whereby people can support the
Foundation’s charitable efforts
over their mobile phones.
We introduce new TV packages
and change the selling model –
now each package contains HD
channels, and subscribers are
their programming content.
We announce the planned
We expand the list of our high
We offer Internet access on
promotional terms to any
interested parties, without having
to buy our television services.
We increase our Internet data
transmission speed to 28.8 Mbps,
using MIMO (Multiple Input, Multiple
Output) advanced technology.
We start selling a new Huawei
E182E MIMO modem.
Nat Geo Wild.
Copyright © National Geographic Channel.
percent stake in Telewizja Polsat,
aiming to create the largest
media group in Poland.
We conclude a term sheet with
a consortium of banks to provide
Telewizja Polsat.
number of DTH subscribers totals
3.28 million, while the numbers
of our mobile phone users and
Internet access users grow to
60,000 and 15,000, respectively.
We launch our Christmas
promotions – offering up to
six months of the selected TV
package for free, HD channels
in standard packages, or up to
four times more GB of Internet
transfer for six months.
3.5 million subscribers to our pay
satellite television.
7 / INTRODUCTION / HIGHLIGHTS 2010 / AWARDS
Awards
March
Crystal Antenna
awarded in the “Internet” category at the 10th Telecommunication and Media
World Symposium.
April
Best Investor Relations
1st place among Polish public companies in the ranking prepared by the
prestigious international magazine Institutional Investor.
Eagle of the Polish Republic
included in the “Top 500 List”, in the category of “Services and Infrastructure
Companies”.
INFOTEL’s Platinum Laurel
received for the introduction of modern technologies contributing to the spread
of digital television across Poland.
May
Best Managed Companies in Central & Eastern Europe
2nd place in the ranking of “Best Managed Companies in Central & Eastern
Europe”, in the category of “Poland”.
Most Valuable Company
2nd place in the ranking of “100 Most Valuable Companies in Poland” published by
Newsweek weekly, in the category of “Media”.
June
Master of Business
awarded by Bussinesman.pl magazine, in the category of “Telecommunications
and IT”.
September
Most Effective President
awarded by Home & Market magazine to Dominik Libicki, President of our
Management Board.
October
Indoor Football Champion
1st place in the 10th Polish Indoor Football Championships of the Telecom, IT and
Electronics Industry.
November
Investor in Human Capital
granted by the Management Observatory Foundation.
Pearl of Polish Economy 2010
1st place in the category of “Great Pearls” and 1st place in the category of
“Pearls of Industry and Services” in the prestigious ranking organized by the
Polish Market business monthly and the Institute of Economic Sciences at the
Polish Academy of Sciences.
February 2011 – for the year 2010
Listed Company of the Year
1st place in the 12th edition of the prestigious ranking “Listed Company of the
Year” compiled by Poland’s leading business daily Puls Biznesu, and 1st place in
the category of “Investor Relations” and “Development Prospects”, 2nd place
in the category of “Success of the Year 2010”, 3rd place for the “Management
Competence” and “Quality of Products and Services”.
8 / INTRODUCTION / HIGHLIGHTS 2010 / LETTER FROM THE PRESIDENT OF THE SUPERVISORY BOARD
Letter from the President of the Supervisory Board
Dear Ladies and Gentlemen,
It is with great pleasure that I address you as Chairman of the
Supervisory Board of Cyfrowy Polsat. My satisfaction is even greater
as during the past year Cyfrowy Polsat Group managed to effectively
implement its business strategy focussing on the development of
integrated services (Television, Internet, Mobile Telephony). The
Multi-play offer is the Company’s best chance to continue to expand its
subscriber base and boost revenues.
of Telewizja Polsat by Cyfrowy Polsat, as a result of which our Group
has become an undisputed leader in the Polish media market. I am
convinced that the combination of these two inherently complementary
businesses will leverage their potential for dynamic growth, thereby
In addition to our modern settop boxes – including an increasing number
successfully offered mobile broadband Internet access based on highly
innovative technologies (HSPA+, MIMO), and is now actively preparing
to launch this service in LTE technology, which is currently the most
advanced solution available in the global telecommunications market.
In closing, allow me to thank not only our shareholders, but above all
to the Subscribers of Cyfrowy Polsat for the trust they placed with us.
I also thank the Manageme nt Board and all our employees for taking up
our joint efforts and commitment will contribute to further effective
implementation of ambitious plans pursued by Cyfrowy Polsat Group.
Yours sincerely
9 / INTRODUCTION / HIGHLIGHTS 2010 / LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD
Letter from the President of the Management Board
thematic channels in our portfolio. We were really pleased to see
growing interest in VoD Home Video Rental, that we started offering
form several major content providers, including Disney, Sony, Monolith
Films, and SPI.
We have considerably developed the production operations at our
factory Cyfrowy Polsat Technology, introducing new models of digital
the market demand and trends. The factory has already produced
more than 2 million satellite set-top boxes, of which several hundred
thousand in HD technology, and this year we plan to launch a brand
new state-of-the-art HD decoder. The business model we adopted
In line with the development strategy that was announced at the time
of our IPO, we made efforts to get involved in the telecommunications
we offered mobile broadband access to Internet through the modern
HSPA+ technology. On 1 June 2010, we launched our multi-play offer
making it possible to buy television, Internet and mobile telephony
services under one contract, one subscription fee, and one invoice.
Whereas, in October we increased our Internet data transmission
multiple-antenna MIMO technology. Today we are the only satellite
platform operator that has expanded its television business with
telecommunication services.
performance. Sales revenues generated by the Group increased
by 17% and reached PLN 1,496.4 million. Consolidated EBITDA
Ladies and Gentlemen,
I have great pleasure and satisfaction to present to you
this Annual Report of Cyfrowy Polsat Group for 2010.
Last year we focused on consistent implementation of the Company’s
strategy aimed at strengthening our leadership in the pay-TV market
as well as developing our multi-play services.
in Telewizja Polsat for PLN 3.75 billion. Owing to this transaction,
media market, forming – together with Telewizja Polsat – the largest
media group in Poland. The business operations of both companies
complement each other naturally, providing us with an opportunity
subscription fees and television advertising.
Due to the continuing demand for television services, we managed to add
234 thousand new subscribers, extending our subscriber base to 3,436
thousand at the end of the year. Having achieved favourable operating
results, we reinforced our position as Poland’s number one provider of pay
Seeking to ensure the sustainable development of our business and
customer satisfaction, we regularly enriched our programming offer,
Planet HD, TLC, AXN HD, Comedy Central, Orange Sport Info, Filmbox,
Filmbox HD, FOX Life HD, FOX HD, Cinemax HD, Nat Geo Wild, and
to PLN 258.5 million.
business objectives for the next few years, and I believe their consistent
implementation will help us reinforce our leading position in the pay
television market. By further development of our telecommunication
services, and exercising due control and creative approach in shaping the
programming content provided by Telewizja Polsat, we will also be able
to successfully offer new, attractive services and products. We expect
that, in a longer run, they will contribute to an increase in the number of
users of our services, average revenue per subscriber, and the customer
loyalty. Achievement of these objectives in combination with disciplined
have a positive impact on building value for our Shareholders.
Yours sincerely,
10 / INTRODUCTION / HIGHLIGHTS 2010 / SUMMARY OF FINANCIAL PERFORMANCE
Summary of Financial Performance
strategy we adopted is reasonable and effectively
implemented. Despite today’s increasingly competitive
and saturated market, the number of new subscribers
to our pay television services is highly satisfactory. The
results achieved for 2010, including a 17% growth in
sales revenues, as well as 28% and 12% increases in
Services provided by Cyfrowy Polsat are still the most attractive offer
48% share in new subscriber additions in the market for pay DTH
services. It is a considerable achievement, especially taking into
account the severe and ever-increasing competition. One of our major
competitive advantages, that differentiates us from the other two
top players in the DTH marketplace, is our integrated Multi-play offer
(TV, Internet, Phone) which, as observed in the developed markets,
plays a key role in striving to maintain a high level of the customer
Average monthly revenue per user (ARPU) of Family Package:
offering and apply competitive pricing in order to adapt to new trends
and market demands.
our subscriber base surpassed 3.4 million subscribers. At the same
time, our continually enriched programming offer, attractive prices
maintain the churn rate at a relatively low level of 10.3%.
Implementing our strategy of offering integrated services,
in September 2008 we launched mobile telephony services,
and in February 2010 we began to provide broadband Internet access.
Since June 2010, we have been offering all our three services bundled
into one Multi-play package. At the end of 2010, our telephone
services were used by nearly 96,000 customers (an increase by
66,545 customers as compared to 2009), while the Internet services
were used by more than 25,000 people.
The numbers of subscribers to our Television, Internet and Phone
services in individual quarters of 2010:
The numbers of subscribers to our Television services (Family
Package and Mini Package) in individual quarters of 2010:
Operating costs
As we managed to increase both the customer base and ARPU, our
operating revenues jumped 17% to PLN 1,496 million
(2009: PLN 1,279 million), EBITDA increased 28% to PLN 407 million
PLN 258 million (2009: PLN 230 million). The 2010 annual results include
the impact from consolidation of our subsidiary M.Punkt Holdings.
Sales revenues
Our revenues from sales of services, products, goods and materials rose
by 17% to PLN 1,482 million (2009: PLN 1,266 million). Excluding the
consolidation of M.Punkt Holdings, sales revenues increased by 16.7% to
PLN 1,478 million. Such improvement was achieved basically owing to
sales of telecommunication and other services, which compensated for
a slight decline in sales of hardware.
Subscription revenues rose by 17% to PLN 1,394 million (2009: PLN 1,190
million) following a 14% increase in the average subscriber base and a 4%
increase in ARPU.
Revenues from telecommunication services increased more than
double to PLN 20 million (2009: PLN 6 million) driven by the newly
launched Internet services, increasing number of MVNO service users
in the post-paid model, and higher proceeds from inter-operator
settlements.
Other sales revenues increased by 40% to PLN 34 million
(2009: PLN 24 million), primarily due to growing revenues from the
from the provision of marketing and advertising services.
Whereas, sales of hardware deteriorated by 23% to PLN 36 million
(2009: PLN 47 million) mainly due to the lower number of set-top
boxes sold which were more often leased under the newly concluded
DTH services contracts, and a decrease in the weighted average
sales price of decoders which were offered at discounted prices in
miscellaneous promotions.
Our operating costs did not grow as dynamically as sales revenues.
In 2010, the costs incurred in operating activities increased by 15%
to PLN 1,122 million (2009: PLN 978 million).
Excluding the consolidation of M.Punkt Holdings, our operating costs
rose by 13% to PLN 1,101 million. This resulted from higher costs of TV
program licenses, marketing expenses, customer service and retention
expenses, depreciation and amortization, as well as salaries and
as well. This tendency was partially offset by a decrease in the cost of
sales and signal transmission costs.
Program licensing costs increased by 11% to PLN 392 million
(2009: PLN 354 million) following an increase in the average number
of subscribers (that provides the basis for calculation of charges under
DTH licenses) and higher VoD licensing fees.
These increases were to some extent offset by favourable exchange
rates of EUR/PLN and USD/PLN.
In 2010 our depreciation and amortization charges jumped 94% to PLN
81 million (2009: PLN 42 million). This resulted primarily from higher
depreciation charges on the increasing number of set-top boxes leased
Expenses incurred for distribution, marketing, customer service and
retention in total increased by 13% to PLN 297 million (2009: PLN 262
mln). Such increase was caused mainly by higher customer service
and retention expenses (larger subscriber base, introduction of
customer loyalty programmes) as well as by higher marketing expenses
(advertising campaigns of the Multi-play offer and Internet services,
start-up of the new TV guide “tv2TYGODNIK”). These increases were
partly compensated by a decline in the distribution and logistics
expenses owing to reduced distributor commissions.
(2009: PLN 73 million) as a result of a higher average number of
employees in the companies of Cyfrowy Polsat and Cyfrowy Polsat
Other costs increased by 66% to PLN 124 million (2009: PLN 75 million)
mainly due to the growing costs associated with the provision of our
Internet access services.
All the above-mentioned cost increases were partially offset, among
as the number of set-top boxes sold declined in favour of set-top boxes
leased, which are not expensed but depreciated, as well as owing to
a lower weighted average cost of set-top boxes sold. On the other
hand, such reductions were limited as we recognized the cost of
sales of hard disk drives, modems, Internet sets, routers and external
Internet antennas.
We also managed to cut our signal transmission costs by 3% to PLN
80 million (2009: PLN 83 million) due to lower fees for using the
conditional access system, resulting from the renegotiation of our
contract with Nagravision, partly offset by an increase in the cost of
transponder capacity leases.
The balance of other operating income and other operating expenses
was negative and amounted to PLN (34) million (2009: PLN (12) million).
Discovery HD Showcase.
© Discovery World.
EBITDA
EBITDA increased by 28% and amounted to PLN 407 million (2009:
of services, products, goods and materials, offset by an increase
in operating costs, excluding depreciation and amortization and an
2010 as compared with 25.1% achieved in the prior year. Excluding the
impact of consolidation of M.Punkt Holdings,
our EBITDA rose 31% to PLN 416 million and EBITDA margin was 28.2%.
reached PLN 334 million. Corporate income tax amounted to PLN 63
million). Excluding the consolidation of M.Punkt Holdings, our net
Both at the beginning and end of the year, the Company’s share
capital consisted of 268 million shares with a par value of PLN 0.04
each. During the year reported, the amount of share capital remained
unchanged.
Earnings per share rose to PLN 0.96 (2009: PLN 0.86).
Net cash generated from operating activities amounted to PLN
198 million (2009: PLN 183 million) and it was used for investing
expenditures (PLN 77 million as compared with PLN 61 million spent in
2009), repayments of bank loans and borrowings (PLN 47 million vs. PLN
63 million in 2009), payments of interest on bank loans and borrowings
(PLN 2 million vs. PLN 4 million in 2009), and dividend payment (PLN
amounted to PLN 28 million (2009: PLN 99 million) and it was PLN 10
million higher than our debt under bank loans and borrowings.
remaining 55% of shares in 2010) as well as purchases of both tangible
and intangible assets.
Agnieszka Popielewicz,
Grunt to rodzinka (All in Family).
© Polsat Cafe. All rights reserved.
in other long-term assets.
Balance Sheet
The balance sheet total as at 31 December 2010 amounted to PLN
The value of intangible assets increased by PLN 9 million to settle at
PLN 23 million as at 31 December 2010. This change resulted basically
from expanding our central warehouse and logistics system and other
reached PLN 428 million, while long-term and short-term liabilities
amounted to PLN 69 million and PLN 518 million, respectively.
The carrying value of other long-term assets amounted to PLN 38
million as at 31 December 2010 and it decreased by PLN 18,326 million
compared to the year-ago level. The reduction is mainly due to the
presentation of goodwill arising on this transaction instead of carrying
increased substantially by PLN 153 million to PLN 275 million as at
in the number of set-top boxes leased to our customers, as they still
The value of other tangible assets as at 31 December 2010 topped
PLN 153 million, having increased by PLN 7 million year on year. Such
Goodwill amounted to PLN 52 million as at 31 December 2010 and
it was disclosed on the balance sheet as a result of completing the
The said decrease was partially offset by an increase in long-term
deferred expenses of PLN 6 million representing distributor commissions
to be expensed over time, as well as by recognition of long-term
guarantee deposist of PLN 0.6 million as paid in by mPunkt Polska.
The value of inventories increased by PLN 51 million to PLN 173
million as at 31 December 2010. This change is primarily due to the
growing inventories of set-top boxes, hard disk drives, USB modems,
and Internet sets, as well as due to an increase in the inventory of
materials for production as reported by Cyfrowy Polsat Technology.
Such increases were partly offset by the declining inventories of
satellite dishes and converters, SMART and SIM cards, as well as by
lower prepayments for deliveries.
Trade accounts receivable and other receivables increased by
PLN 52 million to PLN 184 million as at 31 December 2010. Such
change was mainly the result of two opposing factors: an increase
in trade accounts receivable by PLN 61 million, and a decrease in
taxes recoverable (mainly VAT) by PLN 10 million. The growth in trade
accounts receivable was largely driven by higher receivables from
subscription fees which are accounted for on a straight-line basis over
time (these receivables are not yet due). In addition, trade accounts
receivable increased due to the consolidation of such receivables
carried by M.Punkt Holdings as at 31 December 2010.
The value of other current assets increased by PLN 18 million up to
PLN 77 million as at 31 December 2010, primarily due to an increase
in expensed-over-time distributor commissions by PLN 8 million,
and an increase in deferred income by PLN 3 million.
down to PLN 28 million as at the end of 2010, basically as a result of
distribution of the dividend for 2009 amounting to PLN 153 million,
repayments of bank loans and interest totalling at PLN 49 million,
all partially offset by cash generated from operating activities in 2010.
to reach PLN 428 million as at 31 December 2010 as the Company’s
net earnings amounted to PLN 258 million, the effect of which was
partially offset by distributing PLN 153 million in dividends for 2009.
The amount of long- and short-term bank loans and borrowings
declined by PLN 29 million to PLN 18 million as at 31 December 2010,
account overdrafts by the Group, and repayment of the total amount
of bank loan from Pekao SA.
Cafe Woman, Polsat Cafe.
© Polsat Cafe. All rights reserved.
Trade accounts payable and other liabilities swelled by PLN 96 million to
PLN 318 million as at 31 December 2010, because liabilities to related
companies increased by PLN 6 million, trade accounts payable to other
companies increased by PLN 60 million, short-term provisions increased
by PLN 11 million, and other liabilities increased by PLN 8 million.
Deferred income surged from PLN 31 million to PLN 166 million as at 31
December 2010 on recognition of advance payments of subscription fees.
Dividend payment
The General Meeting of Shareholders decided on payment of a
dividend for 2009 of PLN 0.57 per share which, in total amount,
in two portions: on 11 August 2010 in the amount of PLN 102 million,
and on 17 November 2010 in the amount of PLN 51 million.
14 / INTRODUCTION / HIGHLIGHTS 2010 / KEY FACTS AND FIGURES
Key Facts and Figures
TELEVISION
INTERNET
PHONE
to satellite television.
telephone services.
set-top boxes, used by every
third subscriber.
contract.
in Poland.
portfolio.
Internet in 1800 MHz band.
of Sale.
manufactured in our Cyfrowy
Polsat Technology factory.
designed set-top box.
pay-TV platform in Europe.
15 / INTRODUCTION / MEET OUR COMPANY
16 / INTRODUCTION / MEET OUR COMPANY / MISSION
17 / INTRODUCTION / MEET OUR COMPANY / VISION
18 / INTRODUCTION / MEET OUR COMPANY / STRATEGY
Our strategic objectives
are to
position in the market for broadband Internet, and attract the target
number of subscribers to telephone services.
Build a broad portfolio of products to satisfy the needs of our existing
and potential customers.
Obtain the maximum number of new customers for television and
telecommunication services.
Build customer value (in ARPU terms) by selling the greatest possible
number
of our products to the existing and new customers, focusing on
recognition of their needs. Enhance customer loyalty (CHURN
reduction) by selecting appropriate products (in particular multiprovided.
Leverage awareness of the brand of Cyfrowy Polsat as an operator
of multi-play services, providing the best content by using the latest
technology.
Create optimum working conditions to attract, retain and enable
employees to develop their skills and engage actively in the
implementation of the organization’s objectives.
shareholders.
© Polsat Play. All rights reserved.
19 / INTRODUCTION / MEET OUR COMPANY / OUR BUSINESS
Our Business
Our DTH subscribers have access to more than 90 Polish-language
We operate the largest pay digital satellite platform
in Poland and are the number four operator in Europe.
Our core business is to provide satellite television and
radio channels direct to home (DTH) as part of paid
programming packages. At the end of 2010, the number
of our subscribers came close to 3.5 million (2009: 3.2
million).
We offer all of Poland’s main terrestrial channels, including Polsat,
TVP 1, TVP 2, and TVN.
Polsat Sport HD, Eurosport HD, Eurosport 2 HD, HBO HD, HBO2 HD,
HBO Comedy HD, Cinemax 2 HD, AXN HD, Cinemax HD,
National Geographic Channel HD, FOX HD, FOX Life HD,
Nat Geo Wild HD, Animal Planet HD, MTV Live HD,
Discovery HD Showcase, FilmBox HD, and TVP HD.
Moreover, our customers have access to over 500 free to air (FTA) TV and
radio channels that can be received via satellite in the Polish territory.
As of November 2009, all users of our set-top boxes may also use the
services of VoD Home Video Rental.
pausing of TV programs. In November 2007, we opened our own settop boxes factory, and in March 2008 we launched a modern, digital
Mini set-top box, which is exceptionally compact in size. Another
Cyfrowy Polsat which hit the market in 2010.
Capitalizing on our strong brand and existing subscriber base, in 2008
we began to provide telecommunication services as a mobile virtual
portfolio with services of broadband Internet access. In June 2010, we
launched a multi-play offer including all Television, Internet, and Mobile
telphony.
20 / INTRODUCTION / MEET OUR COMPANY / OUR BUSINESS
Currently Cyfrowy Polsat is the largest digital television platform in Poland,
with more than a million subscribers already using HD set-top boxes. They
represent almost a third of our entire subscriber base that reached nearly
3.5 million users at the end of 2010. Due to the growing demand for HD
services, our ambition is to help the present and potential customers to gain
2010), we are going to produce another million set-top boxes, with HD set–top
boxes representing certainly a large portion of the output. Apart from HD5000,
we plan to start the production of a brand new set–top box, also designed to
21 / INTRODUCTION / MEET OUR COMPANY / HISTORY
Our history
At the start-up, our business was driven by our close relations with
Telewizja Polsat. Trading as ‘Polsat 2 Cyfrowy’, we used a sun-based
In 2001 we changed our corporate name to “Polsat Cyfrowy” and
adopted a distinct logo graphic, changing colours and substituting the
Polsat Television’s sun for a globe, which has been the element of our
visualization ever since.
In 2004 we renamed our company as “Cyfrowy Polsat”.
In 2006 our brand had a radical rebirth. A new visualization was
devised, with orange as a dominant colour – warmer, more familyoriented, more suggestive of availability and optimism. Meanwhile
In 2008 our portfolio was extended with yet another service – mobile telephony.
While our main logo remained unchanged, new icons were added for
particular services – television and mobile telephony.
In 2010 we started to provide broadband Internet access, thereby
again, this time by adding the inscriptions: Television, Internet, and
Phone. Since then we have also used the graphical icons representing
all three services within our portfolio, consistently positioning our
Multi-play offer in the market.
National Geographic Channel
© National Geographic Channel.
22 / INTRODUCTION / MEET OUR COMPANY / SALES AND MARKETING OF SERVICES
Sales and Marketing of Services
Sales of Services
We sell our services through an effective sales network
covering the entire territory of Poland. Our products
and services are sold through two distribution channels:
retail and direct (door-to-door).
Retail Sales
At the end of the last year, the retail sales channel comprised a total
of 1,136 Authorized Points of Sales (APS), of which 996 outlets were
managed by 25 traditional network distributors and the remaining
143 – by our subsidiary mPunkt distributor. In all the locations
available across the country, one can conclude a contract, which
guarantees the access to selected TV packages. Our Internet services
are currently available for inhabitants in around 11,000 towns, which
are served by a total of 514 retail outlets located within the network
coverage area. Direct sales are carried out by our own workforce
(240 sales agents) as well as by third-party contractors (3 distributors
employing 43 sales agents). Our post-paid telephone services may be
contracted at more than 1,000 selected Authorized Points of Sale of
Cyfrowy Polsat. Whereas, electronic top-ups are available in nearly
62,000 retail outlets.
Direct Sales
In view of the growing population of customers using the Internet, our
website continues to evolve and offers more and more opportunities.
Our website www.cyfrowypolsat.pl makes it possible to get familiar
with the offering details, order a satellite reception kit along with the
sale information. Whereas, the existing customers may also purchase
Service Center (ICSC) is a powerful web-based information technology
solution that provides a secure and free online access to our back
independently extend their programming package or buy an extra service
(mobile telephony, Internet) or product (phone, modem).
Central warehouse
In order to support all the described channels of distribution, we have
established our own central warehouse and logistics system, with
a total area of approximately 9,500 m2. This area allows for the
storage of hundreds of thousands of set-top boxes, telephones,
modems and a wide array of materials necessary to ensure smooth
operation of our logistics and sales. In addition to the central
warehouse, we hold certain inventory of set-top boxes at each level
of the distribution chain – at points of sale, distributor facilities, as
well as at the Company. This ensures uninterrupted sales.
We are also able to sell our services through the Customer Service
Call Center, over the Internet Customer Service Center as well as at
our website. By calling the specially dedicated hotline, our potential
customers may place a direct order or obtain information about our
services and the nearest points of sale. The Call Center is available
24 hours a day, 7 days a week.
Authorized Points of Sale are the backbone of our
retail network. Most of them are located in high
providing our know-how (training of salespeople),
and all necessary advertising materials (posters,
permanent media). The direct (door-to-door)
distribution channel does not yet account for a large
portion of our total sales. However, we have noticed
that some customers, living a busy life, increasingly
prefer this form of purchasing a service.
23 / INTRODUCTION / MEET OUR COMPANY / SALES AND MARKETING OF SERVICES
Advertising
We advertise our services primarily on television and radio, in
newspapers and the Internet. Our offering and promotion actions are
also fully supported by our website www.cyfrowypolsat.pl and belowpromotional brochures and folders, etc.) distributed by our APSes. We
are also engaged in various other forms of marketing such as trade
fairs, exhibitions, events, gadget giveaways, which are carried out in
cooperation with local distributors. Furthermore, we communicate
with our existing customers over the subscribers channel as well as by
mailing and broad telemarketing activities.
In formulating both the Company’s marketing strategy and business
objectives, we always focus on the market and customers to provide
them with maximum satisfaction from our products, whilst ensuring
ways of communication we apply. Understandably, the family is
subject to further segmentation. We analyze individual segments
in terms of their value, potential for the Company, changeability,
and their needs – both rational and emotional. We identify our
opportunities in these areas, measure their importance and
potential for growth. Our analyses are based on regular marketing
research and detailed interpretation of the customer base.
promotions, position our pricing, and determine the most effective
ways and channels to reach the targeted segments.
24 / INTRODUCTION / MEET OUR COMPANY / COMPANY’S AUTHORITIES
Management Board
Currently, our Management Board is composed of four members.
Its composition was changed twice during 2010. In January 2010,
and Customer Service resigned and his responsibilities were taken over
by Dominik Libicki, President of the Management Board. In July 2010,
the Supervisory Board appointed Aneta Jaskólska as Member of the
Management Board responsible for legal, administrative and personnel
affairs as well as for information protection and security.
Composition of the Management Board:
Dominik Libicki
Dominik Libicki has served as President of the Management Board of
Cyfrowy Polsat SA since March 2001. He also serves as President of the
Management Board of Cyfrowy Polsat Technology Sp. z o.o. and sits on
the Supervisory Board of Telewizja Polsat. Since February 2005, he has
acted as Vice President of the Association of Private Media Employers,
incorporated into the Polish Confederation of Private Employers
related to the television production industry. He held the position of
Managing Director at PAI Film. He also ran his own company – Studio
Meg, which produced television advertising spots and television
programs. From 2005 to 2006 he was a member, and between 2006
and 2008 acted as Vice Chairman of the Supervisory Board of Polska
Telefonia Cyfrowa Sp. z o.o., operator of Era mobile telephony
Faculty of Environmental Protection. He completed a training for
supervisory board members at state-owned companies conducted by
the Ministry of Economy.
Finance since May 2009. He also serves as Member of the Management
Boards at Telewizja Polsat and Cyfrowy Polsat Technology. From
Economics, Department of Foreign Trade. In May 2003, he received
a PhD degree for his thesis on hedging transactions applied by global
of International Economic Relations. Between 2003 and 2004 he also
International Economic Relations. Concurrently, since 2003, he worked
Risk Department and then, since September 2004, as Director of the
Department of Analyses and Market Risk. In December 2004, he was
promoted as Director of KGHM’s Hedging Department, a position that
he held until March 2007. Since April 2007 till May 2008, he served
2008, he took the position of Vice President for Finance with Telefonia
he majored in International Economic and Political Relations, and
specialized in Foreign Trade.
Aneta Jaskólska
Board for Technology since August 2007. He is also a Member of the
Management Board of Cyfrowy Polsat Technology Sp. z o.o.
He worked at the position of Director of Technology at Cyfrowy
Polsat SA as from November 2001. Previously, he gained professional
experience with Canal+ and Ericsson, as Director of Technology
and Manager for Service Sales, respectively. He is a co-founder
from Warsaw University of Technology where he majored in Radio
and Television. Furthermore, he completed an MBA program at the
University of Maryland.
Aneta Jaskólska has served as Member of the Management Board since
July 2010. She is responsible for Legal Department, Administration
Department, Personnel Department as well as for Information
Protection and Security Department. Mrs. Jaskólska graduated
from the Faculty of Law and Administration at Warsaw University
and completed a legal internship with the District Chamber of
Legal Advisors in Warsaw, receiving the title of a solicitor. She also
graduated from the Jagiellonian University, Faculty of Management
and Social Communication, where she majored in Copyright, Publishing
and Press Law. Since 2007 Mrs. Jaskólska has acted as Director of Legal
and Regulatory Department at Cyfrowy Polsat SA. She also serves as
Member of the Management Board of Cyfrowy Polsat Technology. In the
years 2004-2007, she worked for UPC Poland as a Proxy and Director of
Legal Department. Mrs. Jaskólska has over a dozen years of experience
in legal advice and services to large business entities.
Mrs. Jaskólska has 13 years of experience in legal advice and services
to large business entities.
Supervisory Board
members. The composition of the Supervisory
Board remained unchanged throughout 2010.
Composition
of the Supervisory Board:
Leszek Reksa
is listed among Poland’s leading private entrepreneurs. Investments
but also on other market segments represented by companies such as
and Sferia SA.
Robert Gwiazdowski
is a PhD habilitated in Law. Mr. Gwiazdowski serves as an arbitrator
in arbitration proceedings and as a judge of the Stock Exchange Court
at the Warsaw Stock Exchange. He acts as President of the Adam Smith
Center. He also serves as member of the Supervisory Boards of Gemius
SA, MNI SA (independent member), and DGA SA.
Andrzej Papis
is a Legal Advisor. Since 2000 he has worked as a solicitor for Telewizja
Polsat SA. Since 2003 he served as Member of the Management Board
of TFP Sp. z o.o., and since 2004 as Member of the Supervisory Board
of Elektrim SA. Since 2007 he has also sat on the Supervisory Board
of Media Biznes Sp. z o.o.
has worked in managerial positions at a large banking institution for
over a dozen years. He also served as President of the Management
Board of PHU BIMOT SA, and member of the Supervisory Boards of
Heronim Ruta
works for Ster Sp. z o.o. and also sits on the Supervisory Boards
of Invest Bank SA, PAI Media SA, Gurex SA, Telewizja Polsat SA,
and serves in the Management Board of Diasen Ltd.
General Meeting of Shareholders
Corporate Governance Rules
The General Meeting of Shareholders (GMS) constitutes our supreme
The corporate governance rules applicable in Poland are laid down
in the “Code of Best Practice for WSE Listed Companies”. This
for the Company’s existence and operations. The GMS responsibilities
are set forth in the provisions of the Commercial Companies Code
and our Articles of Association. These responsibilities include, without
limitation, consideration and approval of the Management
followed by listed companies in their everyday activities. We have
almost fully implemented our company intends to observe all the rules
of corporate governance Best Practices presented in „ Best Practices
of WSE Listed Companies”.
of loss, appointment and dismissal of the Supervisory Board members
and determination of their remuneration, amendments to the Articles
We strive to keep our corporate governance transparent and to assure
that it meets Polish and international standards.
or reductions of the share capital, decisions on the Company’s merger,
In order to ensure effective implementation of the Best Practices and
maintain compliance with the Articles of Association, our Supervisory
Board includes two independent members, namely Robert Gwiazdowski
and Leszek Reksa. These persons have no direct ties to the Company
as other matters provided for in the Commercial Companies Code.
A General Meeting of Shareholders may be held as ordinary
or extraordinary. An Ordinary GMS shall be held within six months
be convened in circumstances provided for in the Articles
of Association or when deemed appropriate by entitled persons.
Nat Geo Wild.
their ability to take impartial decisions.
Role of the Management Board
Committees of the Supervisory Board
Our Management Board conducts its activities pursuant to the
provisions of the Commercial Companies Code, the Company’s Articles
of Association and the Management Board Bylaws as approved by the
Supervisory Board on 24 June 2010. The Management Board of Cyfrowy
Polsat is responsible for ongoing management of business operations
and for representing the Company in dealings with third parties.
It shall be composed of one or more members (including the President)
to be appointed by the Supervisory Board. The Management members’
Composition of the Audit Committee:
Composition of the Remunerations Committee:
way, pursuant to the provisions of law, our internal regulations and
the “Code of Best Practice for WSE Listed Companies”.
Role of the Supervisory Board
The Supervisory Board is a body elected by shareholders to maintain
continuing supervision over the Company’s business operations
and management. The Board’s key task is to oversee the activities
Management’s reports, representation of the Company in concluding
agreements and settlement of disputes with members of the
Management Board, approval of the Management Board Bylaws, giving
consent to any share capital increases, and approval of the annual
The Supervisory Board holds meetings on a regular basis to approve
It also approves the Company’s annual budgets, while delegating
certain responsibilities to specially established committees.
Ultimate survival, Discovery Channel.
© Discovery Channel. All rights reserved.
29 / BUSINESS
Discovery Science.
© Discovery Science.
30 / BUSINESS / NEW STRUCTURE OF THE CAPITAL GROUP
New Structure of the Capital Group
* consolidation using full method
** Investment accounted for at cost less any accumulated impairment losses
31 / BUSINESS / TELEVISION
Desperate Housewives, FOX Life.
© ABC INC.
32 / BUSINESS / TELEVISION / SATELLITE TELEVISION
Satellite Television
Market Environment
We operate in the Polish pay television market. In 2010, Poland
had 38.1 million inhabitants living in approximately 14.5 million
households. According to Informa report, 97% of those households had
a television set in 2010. Our estimates show that in 2010 the rate
of pay television saturation in Poland reached almost 72%, assuming
there were 14.5 million households, of which approximately
0.5 – 2 million households used more than one pay TV service.
Our Competitors
Our direct competitors are primarily other providers of digital satellite
television, yet we also compete with cable television operators
though to a lesser extent. We believe that in future we will also
face competition from terrestrial digital television and television
distributed over the Internet (IPTV).
The share of particular services in the pay television market in the
years 2005-2009, based on the number of subscribers:
We estimate that at the end of 2010 our share in the satellite pay-TV
market, measured by the number of subscribers, stood at around 55%.
Cyfrowy Polsat Broadcasting Center
Number of DTH subscribers and paying customers
of digital platforms as at 31 December 2010
Source: Own estimates based on “Informa Telecoms and Media,
Eastern European TV, 14th Edition”, information from the Polish
Chamber of Electronic Communication and the Central Statistical
operators
Cyfrowy Polsat Broadcasting Center
Source: Cyfrowy Polsat, TVN Group Annual Report, Telekomunikacja
Polska S.A.website, press releases
Note:
2.
Customers for paid DTH channel packages offered
by TPSA
Digital satellite pay television
In Poland there are currently four operators of digital satellite pay
television: Cyfrowy Polsat SA, Canal+ Cyfrowy Sp. z o.o. (Cyfra+),
ITI Group (“n” platform), and Telekomunikacja Polska SA (TPSA).
According to our estimates, at the prior year’s end our share in the satellite
pay-TV market, measured by the number of subscribers, reached 55%.
Our share in net subscriber additions on the satellite digital television
market settled at 48% as measured by the number of subscribers
in net additions averaged 49%. Since 2009, due to the increasing
market saturation, the number of new subscribers tends to decline
in the overall market for satellite television as well as in our case.
Sunrise Earth, Discovery HD Showcase.
© Discovery HD Showcase.
Cyfrowy Polsat’s share in net additions in the satellite pay-TV market
in the years 2008-2010, based on the number of newly acquired
subscribers:
Cable television
Digital television via Internet protocol (IPTV)
Poland has over 500 cable television operators, serving over
a thousand cable networks. Currently, the major market players
include UPC Telewizja Kablowa Sp. z o.o., Telewizja Kablowa Vectra
SA, Multimedia Polska SA, and Aster Sp. z o.o., which together serve
over 60% of Poland’s cable television market.
We also recognize a competitive threat from IPTV providers although
the transmission of digital television via Internet protocol
is developing in Poland at a relatively slow pace. Telekomunikacja
Polska SA has begun offering IPTV to their Warsaw-based customers
having a DSL connection already in 2006. At the end of 2010, they had
around 115 thousand subscribers, and on the top of that 35 thousand
clients used IPTV services provided by Telefonia Dialog (according to
Although cable operators are our natural competition, in some
areas we have a cutting-edge advantage. The satellite signal
infrastructure, which in practice limits its expansion possibilities
to cities and densely populated areas. Whereas, we can gain
customers even in places where cable TV infrastructure does not
exist or is underdeveloped. We can also effectively compete against
cable providers with a wealth of broadcast channels. Analogue
cable technology can carry around 60 programs only, while we offer
several hundred channels, including almost 90 in Polish and 19 in high
ensuring an incomparably better reception than analogue transmission.
Ultimate Survival, Discovery Channel.
© Discovery Channel.
All rights reserved
Digital terrestrial television (DTT)
In Poland there are currently seven analogue terrestrial channels,
only four of which are available to more than 90% of households. Yet
the transition to digital signal transmission has been postponed due
we hope that in the period immediately after the launch of digital
terrestrial television, its programming offer will be limited to the
existing analogue terrestrial channels, and only later it will be
enriched with additional TV channels.
35 / BUSINESS / TELEVISION / SATELLITE TELEVISION / PROGRAMMING OFFER
Programming Offer
Our digital satellite pay television services are sold to customers
in the domestic market only. Our platform provides access to
more than 90 Polish-language channels, including sports, music,
We are the only operator of digital satellite pay TV that offers all
of Poland’s main terrestrial channels: Polsat, TVP 1, TVP 2, TVN, TV4, as
well as two most popular sports channels: Polsat Sport and Eurosport.
Our broadcasting offer includes 12 sports channels, including 3 in HD
movie and serial channels (such as HBO, Cinemax, AXN, and FilmBox),
7 channels for children (including Polsat Jim Jam, Disney Channel,
Nickelodeon, and Cartoon Network), 4 news/information channels
(including Polsat News, TVN 24 and TVP Info), 5 general channels
(including Polsat, TVP1, TVP2, and TVN), 12 educational channels,
Nat Geo Wild HD, Animal Planet HD, and National Geographic Channel
HD), 3 music channels (including MTV Poland),
and 8 entertainment channels (such as Polsat Cafe, Polsat Play,
and TVN Style).
Discovery World.
© Discovery World.
Furthermore, we provide our clients with access to nearly
500 free-to-air television and radio channels available on the Polish
territory via satellite, including CNBC, Bloomberg, Super RTL, ZDF,
Rai News 24, Rai Due, Fashion TV, and France 24, just to mention a few.
Our offer also features nine leading Polish radio channels, including
RMF FM, Radio Zet, and 3 programs broadcast by Polskie Radio.
In October 2010, we injected some innovation to our portfolio –
promotional channel packages to be sold under new schemes. Currently
each promotional package contains HD channels, and subscribers are
Our clients are offered two starter packages – Family Package HD
and Mini Package HD.
Starter packages
Family HD Package
Family HD Package lets you watch 44 encrypted Polish-language
Polish and foreign free-to-air television stations.
TV channels available in Family HD Package
Mini HD Package
Mini HD Package has been created by extending the existing Mini Max
Package with Polsat HD. As a result, this option allows access
TV channels available in Mini HD Package
Big Time Rush 2, Nickelodeon Polska.
© Nickelodeon Polska.
Thematic packages
TV channels available in Extra HD Package
Subscribers to Family Package HD can select from among 8 extra
options to be purchased according to their personal programming
preferences. Among them we offer 3 additional packages (Extra
Package HD, Sports Package HD, VoD Home Video Rental) as well as
5 supplementary services (HBO Package HD, Cinemax Package HD,
HBO Cinemax Package HD, Entertainment Package, selected adult
channel).
VoD Home Video Rental
Additional packages
VoD Home Video Rental is available to all subscribers, regardless
of the type of decoder used to receive our program offer. VoD
operates based on 15 satellite channels, which during one month
Monthly VOD Film Catalog. The Catalog is available on 7 positions
VOD59-VOD65 and is updated weekly with new titles.
Extra HD:
The Simpsons, TM &
© 1999 FOX and its related entities.
TV channels available in Sport HD Package
Supplementary services
TV channels available in HBO HD Package
TV channels available in Cinemax HBO HD Package
TV channels available in Entertainment Package
Premium Package
TV channels available in Cinemax HD Package
The real TV fans can now select the Premium offer prepared for the
customers to receive all channels, including the Monthly VOD Film
Catalog.
Free-to-air channels
In addition to our paid programming packages, our customers have
access to all free-to-air television and radio channels available via
satellite in Poland, including CNBC, Bloomberg, Super RTL, ZDF,
Rai News 24, Rai Due, Fashion TV, France 24, and most popular Polish
radio channels, such as RMF FM, Radio Zet, and 3 programs broadcast
by Polskie Radio.
2010 new channels
2011 new channels
In the past year we enriched our programming offer with the following
channels:
In 2011 our programming offer has been additionally extended with:
February:
January:
March:
February:
April:
March:
June:
April:
July:
November:
Nat Geo Wild.
40 / BUSINESS / TELEVISION / SATELLITE TELEVISION / BROADCASTING CENTER
Broadcasting Center
Cyfrowy Polsat has one of the largest and most modern broadcasting
centers in Poland and Europe alike. It was built in 2006 and began
broadcasting in early 2007. The center consists of many mutually integrated
video, audio and IT systems, all featuring state-of-the-art technology
ensures the transmission of digital streams to the satellite, it also controls
the signal parameters and the antenna guidance system. The broadcasting
process is fully controlled by a specialized signal monitoring system, while
Centrum Nadawcze Cyfrowego Polsatu
Satellite signals must travel over 100 thousand kilometres to reach
the audience, yet the process is not that complicated.
All the customer needs is a digital set-top box and a satellite dish
directed at our satellite. Delivery of satellite programs may be
performed in two different ways – we send the programs ourselves
from our broadcasting center to our rented transponders (separate
parts of a satellite that enable reception of terrestrial signals and
their retransmission back to the Earth), or we hire contractors to do
it for us (they transmit their signal and we only add our encryption).
time-consuming way, but at the same time allows the greatest
containing the broadcast materials and scheduling (i.e. the play list)
transmission servers. Whereas, in the retransmission scheme
we receive the program via satellite and, having added our
method is used to obtain the ready-made programs in digital but
uncompressed format (this is a kind of physical connection with
41 / BUSINESS / TELEVISION / TELEWIZJA POLSAT
broadcasters market and, from now on, will derive revenues also from the
advertising market.
TV advertising generates over 50% of total advertising market revenues in
Poland and this trend is expected to continue in the years to come. The
advertising market revenues are highly correlated to general trends in
the nation’s economy and GDP level. The economic downturn observed
in 2009 had a substantial impact on advertising revenues, which declined
by 11% during the year. According to Eurostat’s data, in 2010 the Polish
GDP improved by 3.5% and the growth forecasts for the coming years
are fairly stable oscillating between 3.5% and 4.4% (as estimated by the
Ministry of Regional Development). Such macroeconomic stability should
support a rebound in advertising spending on the local TV market which,
according to Zenith Optimedia, is set to grow by 5% in 2011 and 8% in 2012.
Advertising expenditures are relatively low in Poland as compared to other
European countries, and therefore it may be reasonably presumed that the
local advertising market will increase over time, potentially approaching
international levels. In 2009, advertising spending in Poland accounted for
0.51% of GDP, as compared to 1.76% in Slovakia, 0.77% in the UK, and 0.72%
in Germany. Cyfrowy Polsat Group, having incorporated Telewizja Polsat,
Group of Cyfrowy Polsat will become an undisputed
leader in the Polish media market. Cyfrowy Polsat
revenues both from subscription fees and television
advertising. The business operations of Cyfrowy
Polsat and Telewizja Polsat complement each other
naturally and thereby give us a lot of competitive
advantage.
market.
Telewizja Polsat is one of the leading TV broadcasters in Poland. According
to Nielsen Audience Measurement, in 2010 the Polsat channels audience
reached approximately 19.2% of viewers aged between 16 and 49. Despite
severe market competition, over the last two years Telewizja Polsat managed
to sustain its over 20% share in the TV advertising market (Starlink).
History and TV Channels Portfolio
Telewizja Polsat started broadcasting in 1992. During 19 years of its
operations, it gained millions of viewers and secured a strong position
in Poland to break up the public television monopoly and set the trail
for other independent television projects.
The station earned its success by providing viewers with the highest
The First Polish Talk Show – Staged by Polsat
Started by Polsat in October of 1993, the program was initially hosted
characteristic scenery of the then non-existing Polsat tower roof, and
blockbuster movies, world-class sports, exciting programs featuring
popular celebrities, as well as musical events and big pop star
concerts.
Penderecka) or music (e.g. Kora) as well as persons representing more
controversial professions or hobbies. Despite being broadcasted in
late hours, the talk show usually attracted around 1.5 million viewers,
giving our station an average 30% share of the market.
The Biggest Promotional Campaign – Polsat Club Passports
Game Show that Outperformed the “News”
In September 1996, we launched the most spectacular promotional
campaign for the audience in the history of Polish television – “Polsat
Club”. At that time “Polsat Club Passports” were awarded to 13 million
households making it possible to win valuable prizes. This way Polsat
created the largest customer loyalty programme and launched a game
that involved the whole of Poland. Shortly afterwards “Polsat Club”
became the most popular television play in Poland and was repeated
two more times.
a month after the debut, the program outpaced the competition in
terms of audience numbers, beating even the TVP1 “News” (on 5
October 1997, the program was watched by nearly 9.3 million viewers
aged 16 to 49, gaining a 65% market share). Another hit game show
Ibisz acting as a host. The program’s steadily growing audience
reached 6.6 million in December 2000.
Polsat Sport and Polsat Sport Extra – The Best Sports Channels
Polsat Leads Investments in HD Technology
In order to meet the viewers’ expectations, Polsat created two sports
channels, namely Polsat Sport and Polsat Sport Extra. Polsat Sport
produces annually more than 500 broadcasts from different stadiums
and sporting competitions. Originally the channel was dominated
by football transmissions. With time, however, the channel started
to present more and more other disciplines, such as basketball,
volleyball, speedway, and tennis.
In 2007 Polsat purchased three HD broadcast vans that were
manufactured to special order by Sony, the world’s largest producer
Other Thematic Channels
and “Nasze Dzieci” (Our Children). Whereas, in 2008 we used HD
technology to transmit the J&S Cup – women’s tennis tournament,
Our TV station is investing heavily in the development of thematic
channels. Nowadays, our portfolio includes the following channels:
Polsat, Polsat HD, Polsat 2, Polsat News, Polsat Sport, Polsat Sport
Extra, Polsat Sport HD, Polsat Futbol, Polsat Film, Polsat Play, Polsat
Cafe, Polsat Jim Jam, and TV Biznes.
library of the most important sporting events, TV series and programs,
broadcasting the Men’s Volleyball World League, Women’s Volleyball
entertainment event – Sopot TOPtrendy Festival.
Market Leader in Television Broadcasting
Telewizja Polsat achieved favourable audience results in 2010 and is
one of the major TV broadcasters in Poland.
Audience measurements for Telewizja Polsat channels in 2010
Our programming offer comprises mainly our own brand
foreign series, amazing world-class entertainment, as
events in Poland and worldwide.
In 2010, Telewizja Polsat expanded its technical coverage.
As of 1 September 2010, our main channel as well as some
of our thematic channels are available from the Cyfra+ platform.
Furthermore, Polsat’s thematic channels may be also watched
at Multimedia Polska from the beginning of 2011, as well as on the “n”
platform as of May.
“Must Be the Music. Tylko muzyka” – Success of the First
Edition of the Musical Talent Show
The First Television to Establish a Charity Foundation
The main cash prize plus a guest performance at this year’s Sopot
TOPtrendy Festival were awarded to ENEJ band of Olsztyn. During the
involved in charitable activities. Established in 1996, the Polsat
Foundation is committed to helping children suffering from various
diseases and today it is one of the largest non-governmental organizations
group aged 16 to 49 years.
Is All You Need). Nowadays, the Polsat Foundation is commonly known for
The show’s 10 episodes enjoyed an average audience share of 27.4% in the
commercial group aged 16 to 49 (source: Nielsen Audience Measurement),
positioning Polsat TV as a leader on Saturday evenings. Individual episodes
were watched by nearly 3.5 million people on average.
Also the program’s fan page on Facebook made a gigantic success as
it attracted over 260,000 enthusiasts. The talent show gained a huge
commitment from users who supported their favourites with an average
of 220 thousand votes a week, making up a total of over 2 million votes.
Ongoing events were commented by more than 100 thousand Facebook
users per day and the program fans left more than 1.6 million entries on
the “Wall”. Numerous discussion groups about the show’s participants
were visited by 25,000+ Internet users, and the fan page has already got
talent show which enabled such a strong interaction between participants
and spectators via Facebook.
© Polsat. Fot.: Studio 69.
44 / BUSINESS / TELEVISION / CYFROWY POLSAT TECHNOLOGY
Producer of Decoders
In November 2007, we started manufacturing our own set-top boxes.
Mini, was launched into the market. It has been entirely designed by
our internal team of engineers, and its production was taken up by our
subsidiary Cyfrowy Polsat Technology. In September 2008, the factory
of all the teams involved in the design and manufacture of decoders.
In April 2010, we began the production of HD set-top boxes, launching
a brand new model called HD5000. In 2011 we plan to expand our
Set-top boxes
In order to be able to watch our channels you need to have installed
a set for reception of satellite television. It consists of a satellite dish
and a decoder, including the subscriber card and a remote control.
We offer both simple SD decoders (providing a standard image
resolution), as well as most technologically advanced HD decoders
disk drive, are capable of TV program recording and playback.
we entered into cooperation with such providers as Echostar and
Sagem. Since 2011, our purchases of decoders from external suppliers
have been limited just to DVR set-top boxes.
Last year our factory produced the following decoders: M100, Mini,
Family Decoder, and HD5000. They accounted for almost 80%
contracts. In addition, we offered the following third-party decoders:
Echostar 717, Echostar 717A, Echostar DSB-7100HD, Echostar DSB7200HD, Echostar HDS-400E, Echostar DVR-7400HD, Samsung DSBS305G, Samsung DSB-H370G, and Sagem ESI 88.
Video recording decoders offered by Cyfrowy Polsat
45 / BUSINESS / TELEVISION / CYFROWY POLSAT TECHNOLOGY
incurring manufacturing costs which are far lower than the price of purchasing
reduce the cost of new set-top boxes and, concurrently, are able to shorten
Furthermore, the functionalities of our set-top boxes are designed in line with
the customers’ expectations as analyzed by surveys, so that we can be sure
set-top boxes is developed by in-house engineers, enabling us to rapidly
respond to emerging customer needs. In this area we are completely
independent and self-reliant, which translates into better service for
46 / BUSINESS / INTERNET
47 / BUSINESS / INTERNET / MARKET ENVIRONMENT
Internet
Market Environment
Analytical data on the market for telecommunication
services, including the Internet, are usually available
in the second half of the next year, thus the latest
available information covers the year 2009.
Poland, in comparison with other countries of Eastern and Central
Europe, has one of the largest populations of Internet users over
the age of 7 years, accounting for 17.9 million users. The country
exhibited a strong growth in Internet connections during 2009,
the number of which surged by 7.3 million or 32% in year-on-year
Communications, the number of households with broadband access
increased by 5.2 million or 13.6% as compared with 2008.
Hence, the broadband Internet penetration rate reached almost 39%.
Whereas, Eurostat estimated that in 2009 approximately 59% of Polish
households with at least one person aged 16-74, held a computer with
an Internet connection. The whole Internet market in Poland was
estimated to be worth PLN 4.1 billion at the end of 2009. We believe
roughly at 44% of households. Internet access via mobile networks is
much less developed, with approximately 3 million mobile Internet
modems the market penetration stands at 8% of the population.
The Polish Internet market is served by several large telecom
operators as well as by plenty of smaller Internet providers.
The most expensive car in the world,
Discovery HD Showcase.
© Discovery HD Showcase. All rights reserved.
Our Competitors
the competing solutions offered by cable and mobile operators.
We provide Internet access speeds up to 28.8 Mbps, which is three
times faster than typical Internet connections available on the Polish
market. High-speed connections enable our customers to make full use
of the Internet’s most advanced and data-hungry multimedia services.
Finally, unlike other mobile operators, Cyfrowy Polsat does not limit
the speed of transmission once the purchased data package has been
used up. Furthermore, the low penetration of Internet access services
by mobile operators and the lack of appropriate infrastructure from
cable operators should all pose an opportunity for the development
of our integrated services. The competition from cable operators and
TPSA is virtually restricted to large and medium-sized cities.
For customers located elsewhere, radio signal is usually the only
Internet access option available. The steadily growing demand for
Internet access services will be certainly followed by considerable
towns and villages, the Internet access provided by Cyfrowy Polsat
may be the only choice available, but we are sure our integrated
services will be an attractive proposition.
Currently we conduct customer testing of our latest product – LTE
Animal Planet
© Animal Planet.
Europe and fourth worldwide, is going to offer its customers
a super-fast Internet connection based on the LTE (Long Term
Evolution) technology. The introduction of such service will place our
Company far ahead of the competition, especially that we will be the
48 / BUSINESS / INTERNET / INTERNET OFFER
Internet Offer
Currently, our Internet services are available for customers living in
around 11,000 towns, and they may be purchased at the Authorized
Points of Sale located within the network coverage area.
Our offering includes several levels of subscription varying by amount
of data transfer to be used in a month. Once the transfer package
access – both during the day and at night – on attractive terms, either
We offer the most technologically advanced modems available on the
market today. Depending on the contract term and additional transfer
package chosen, our subscribers can buy modems starting just from
technical expertise.
Ultimate Survival, Discovery Channel.
© Discovery Channel.
49 / BUSINESS / INTERNET / BRAND NEW SERVICE - LTE
Brand New Service - LTE
In 2011, we plan to provide our clients with a commercial Internet access featuring the Long Term Evolution
technology that is considered to be the future of mobile
broadband Internet and the successor of widely used
UMTS standard. The LTE mobile connection can offer
a maximum speed of up to 150 Mbps.
in Stockholm and Oslo already in September 2009. Until November
2010, there were established 17 commercial networks utilizing this
innovative technology, including the network built jointly by Mobyland
and CenterNet that will be used by customers of Cyfrowy Polsat.
At present, more than 180 operators in 70 countries are getting ready
to introduce LTE-based Internet services, turning this technology into
a global standard. At the end of the last year, LTE networks served
350 thousand customers, yet this number is expected to reach 300
million users by 2015, of which 43% in Asia. Active preparations to
launch the LTE services are taking place, among others, in Romania,
Lithuania, Chile, Croatia, Brazil, Kuwait, Italy, Luxembourg, Jamaica,
Kazakhstan, and Singapore. Other countries that plan to introduce this
technology include Armenia, Canada, Russia, Denmark, India, Ireland,
Jordan, USA, Saudi Arabia, South Korea, China, and Switzerland.
By 2013, LTE-based Internet access will be available also in Australia,
Malaysia, and Taiwan.
MHz LTE network that was set into operation in September 2010 by
Mobyland in cooperation with CenterNet (third in Europe and fourth
worldwide operator of mobile services in this technology). The LTE
Poland – it will enable download speeds of up to 150 Mbps (ultimately
326 Mbps) and upload speeds of up to 50 Mbps (ultimately 86 Mbps).
Compared to HSPA+ or UMTS, this technology is characterized by much
lower latency and may serve a considerably greater number of users.
LTE services are now available in most of the nearly 500 base stations,
will be gradually expanded.
While preparing to the commercial implementation of LTE Internet,
we spend a lot of effort developing our modems. Apart from Speed
1000 modem, we collaborate with HUAWEI to develop a tri-band E398
modem which is meant to operate in a 20 MHz channel and support
2100 MHz for HSPA+ technology. This solution will make it possible
for our customers to access Internet services provided both in HSPA+
and LTE technologies while using just one modem.
I truly believe that mobile Internet technologies
(and in particular LTE, which poses a huge growth
potential due to its outstanding performance and
speed) are going to revolutionize the market, and
for cable Internet, while retaining the advantage
of mobility. It is a big thing for us, being a media
company, especially in times of the evolving media
consumption and developing market for mobile
devices.
50 / BUSINESS / MOBILE TELEPHONY
51 / BUSINESS / MOBILE TELEPHONY / MARKET ENVIRONEMNT
Market Environment
Analytical data on the market for telephone services are usually
available in the second half of the following year, therefore the latest
published information relates to the year 2009.
that the Polish mobile telephony market has grown mature.
At the end of 2009, the penetration level amounted to 117.4% and the
whole market was worth approximately PLN 18.7 billion.
Revenues in the mobile sector comprised 44% of the total telecom
market in Poland. According to the UKE’s report, the number of mobile
telephony users reached 45 million at the end of 2009. Whereas, data
2010, the number of active SIM cards in Poland surpassed 47 million,
implying a penetration rate of 123.42%.
The Polish mobile telephony market is split between 18 operators,
6 of which are Mobile Network Operators (MNO) while the remaining
12 are virtual operators (MVNO). The marketplace is highly polarized
– the big three traditional operators (Polkomtel, Polska Telefonia
Cyfrowa, and PTK Centertel) controlled over 90% of the market
in 2009 (according to UKE). In spite of the dominant position of those
largest market players, a new operator P4 managed to gain
2.1 million subscribers till September 2010 (according to World
Cellular Information Service).
In terms of revenues, as much as 99.83% of turnover in the mobile
telephony market in 2009 were generated by the four major mobile
network operators.
Most of the mobile virtual network operators provide basic telecom
services in the prepaid system, and only a few of them (including
Cyfrowy Polsat) launched a subscription offer. We believe that our key
competitive advantage in the market for both telecommunications and
television is our ability to offer a suite of services, including pay TV,
internet access and a mobile phone.
Enej, Tylko muzyka. Must be the music.
© Polsat. Fot.: Studio 69.
Mobile Offer
We provide mobile telephony services in the subscription (post-paid)
model, treating them as part of our integrated offering.
Our phone service attached to the television package provides
our customers with 30 toll-free minutes for calls to all national mobile
and landline numbers, or 90 toll-free minutes for calls within the network
of Cyfrowy Polsat.
Furthermore, our customers can choose one of the two additional
packages offered: 120 Minutes Package and 240 Minutes Package.
Angry Planet, Travel Channel.
© Travel Channel.
52 / BUSINESS / MULTI-PLAY OPERATOR
Multi-play Operator
In June 2010, Cyfrowy Polsat launched its Multi-play offer allowing
to buy all three of our services – Television, Internet and Mobile
Telephony – under one contract, one subscription fee, and one invoice.
Our integrated services are dedicated to both new and existing
subscribers who, at any time during the contract term, may extend
their currently owned TV package with one or two telecommunication
services. The Multi-play offer is available from our Authorized Points
of Sale as well as in the mPunkt network. The TV-Internet-Mobile
Telephony bundle may be purchased from 514 resellers located within
package may be activated in our entire distribution network, including
1000 points of sale countrywide.
Offering of integrated services is our major competitive advantage
in the pay satellite television market in Poland. We established a
strong position in this segment owing to our widely recognizable
brand, competitive pricing, attractive programming offer, as well as
thanks to all the efforts to inspire loyalty and bring satisfaction to our
clients. The Multi-play offer is our best chance to expand business and
boost revenues. It is also a great marketing tool that helps reinforce
our leadership in the market.
By introducing the Multi-play offer, we have become the only provider of
integrated services to people living in the suburbs, small towns and rural
areas. For many of such households we are also the only or second, in
addition to mobile phone operators, supplier of Internet access. We believe
Internet access offered in less-urbanized areas,
our offering will be an attractive choice for our existing satellite payintegrated services.
We are perfectly aware that the development of telecommunication
services will depend on two factors – multimedia content and network
speeds – and therefore we keep on developing and investing in both the
areas. In the second half of 2010, we worked hard to develop our latest
product – Internet in LTE technology, which enables downloading at speeds
of up to 150 Mbps (target: 326 Mbps) and uploading at speeds of up to 50
Mbps (target: 86 Mbps). Compared to HSPA+ or UMTS, this technology is
characterized by much lower latency and may serve a considerably greater
from ever-growing capabilities of the Web. At the same time, our Internet
service ensures mobility which is more and more appreciated by customers.
Capacity, speed, and low latency – these are all advantages provided by the
latest generation of mobile Internet.
The differences can be seen with the naked eye. For comparison, a fulllength HD movie downloads in about 2 hours from a UMTS network, or in
less than 1 hour in HSPA+ technology, while the LTE download will take just
a few minutes. This will enable our LTE Internet customers to freely use
real-time transmission, such as online games, video communication and
prototype HUAWEI Speed 1000 modem are undergoing customer tests.
Our observations clearly indicate that Internet
technologies gain an increasing share in the distribution
of multimedia content. This tendency is in line with our
mission and development strategy. Therefore, apart
from introducing increasingly more modern and faster
technologies of Internet access, we continue to deliver
more and more television content over the Internet. As
a catch-up TV service offered under our own brand
name “Strefa Wideo” (Video Zone), which is a free
online television providing access to selected broadcasts
from our main television package. The advantages of
a catch-up TV and our web-based Video Zone service
will be above all appreciated by those who count their
spare time in minutes, rather than hours. They are
going to love the ability to choose their favourites from
the programming schedule, and watch them at any
convenient time and place
55 / STAKEHOLDERS AND INVESTORS
Glee, FOX HD.
© 2009 Twentieth Century FOX Television.
All Rights Reserved.
56 / STAKEHOLDERS AND INVESTORS / SHAREHOLDERS AND INVESTORS
Shareholders and Investors
Cyfrowy Polsat shareholders by % of shares
Current shareholders
Shareholder
Number of
shares
Equity interest
Number of
votes
Voting
interest
Cyfrowy Polsat shareholders by % of votes
Polaris Finance
B.V.
175,025,000
50.24%
341,967,501
64.79%
Karswell Limited
53,887,972
15.47%
53,887,972
10.21%
Rest
119,439,864
34.29%
131,914,864
24.99%
Total 348,352,836
100.00% 527,770,337 100.00%
*As at 20.04.2011
Robert Kubica, Formula 1, Polsat Sport
© Polsat Sport.
57 / STAKEHOLDERS AND INVESTORS / SHAREHOLDERS AND INVESTORS
Dividend Policy
On 4 July 2008, our Ordinary General Meeting of Shareholders
adopted a resolution on the dividend policy stating that the Company
in dividends. The amounts of dividend will depend on the actual
restrictions under loan agreements), availability of disposable capital
reserves, the Management and Supervisory Board assessments
for our ultimate goal to ensure continuing growth, in particular
The General Meeting of Shareholders decided on payment
of a dividend for 2009 of PLN 0.57 per share which, in total amount,
in two portions: on 11 August 2010 in the amount of PLN 101,963
thousand, and on 17 November 2010 in the amount of PLN 50,982 thousand.
Travels around the world, Travel Channel.
© Travel Channel.
Effective communication with investors helps to build
the optimal shareholder structure and permanently
increases the company’s value in the eyes of investors
and other market participants. It is all about fostering
good investor relations, knowledgeably and up to the
highest standards, in order to enhance the company’s
chances for success and thereby enable investors to
risk management. At Cyfrowy Polsat, we use our best
endeavours to pursue a transparent and consistent IR
information policy, which is primarily intended
to provide a broad and convenient access to all
information essential for assessing the Company’s
Investor Relations
Investor Relations (IR) are among the key tools for managing a modern
and competitive enterprise whose stock is publicly traded.
Right from its IPO at the Warsaw Stock Exchange in May 2008,
our Company has actively developed its market relations and still
and maintain an appropriate investor relations policy – from those
traditional, through modern technological solutions, to marketing
tools. The most traditional channels of communication include
reports, general meetings of shareholders, investor conferences, road
shows, and face-to-face meetings. As far as technologically advanced
means of communication are concerned, we could mention our
investordedicated website (http://www.cyfrowypolsat.pl/inwestor/),
periodic bulletins, electronic newsletters, and teleconferences with
the Management Board members. Whereas, as part of our marketing
communications we organize press conferences, publish occasional
corporate brochures and other materials.
58 / STAKEHOLDERS AND INVESTORS / CUSTOMERS
Customers
Customer service
Customer Relationship Management
What we deliver to our customers is entertainment which is especially
important for people living in Poland. We watch television more than
any other European nation – nearly four hours a day. Owing to that,
general awareness of our audience and customers has increased
considerably in recent years. They know their rights, they know the
products, and they know what’s out in the market. This means we
We manage customer relationships using a sophisticated CRM system
that was developed by our inhouse IT specialists on the basis
of a multi-functional platform integrating all telephone, facsimile,
email, SMS/TTS in conjunction with IVR (interactive voice response
system able to transmit prepared text information), and CTI (platform
combining phone and CRM functionalities), along with traditional
mail correspondence.
as on providing good customer service.
Our CRM system fully supports all the service and document
We employ the latest technological solutions in order to continually
improve our customer services. Our strengths are the stable and
a rapid decision-making process.
through the NICE platform (call recording system). It has been
upgraded with new functionalities, including the electronic archive
(where paper documents are processed into electronic format, both
to save time and improve data security), and the integrated subscriber
communication system (including our website, Internet Customer
Service Center, text messages sent to the TV screens,
and an interactive voice response system). In addition, we have
implemented a modern customer loyalty system as well as a payment
monitoring system.
Kardiashians, MTV Polska.
© MTV Polska.
Our customers lay the foundation for our market position and that is why
we continue to improve our tools to support them. We put special emphasis
system, which is used by various departments and business sections, but most
of all by our telephone consultants. The system provides easy and intuitive
access to customer information, thereby enabling the consultants to work more
coherently and effectively. The system records every activity (documents,
correspondence, conversations, emails, and SMSes), and additionally it contains
an electronic database of all the related documents. Another important
solution is our Internet Customer Service Center which has been developed for
over a year now. Initially it was a relatively simple tool, but over time it was
upgraded with further modules to support new services, such as VoD Home
Video Rental. Today, our clients can log into their accounts, review and modify
the contents of their packages, check and make payments, and rent the latest
movie in the evening – all without the need to contact a consultant.
Customer Service Call Center
We operate the Customer Service Call Center with more than 500
submissions. In mid-2011 we plan to open another 100 positions.
The Call Center is available 24 hours a day, 7 days a week.
Its departments and sections, dealing with different areas of customer
service, are fully dedicated to our subscribers and responsible for the
provision of comprehensive and professional services, which include
accepting purchase orders, signing contracts, receiving complaints,
explaining payment issues, providing all relevant information and
support throughout the duration of the contract.
Internet Customer Service Center (ICSC)
ICSC is a powerful web-based information technology solution that
and technical support. By connecting online to ICSC, our customers
who have a set-top box or CAM module are able to: check the status
of their payments, print out a banking or postal payment order,
print out the settop box user’s manual, reset the satellite connection,
restore factory default PIN code, change their contact details and
contact form. Here, the customers can also make
and review their purchases at VoD Home Video Rental or order
the VIP package. Furthermore, those using our mobile telephony
and Internet services can, among others: review their telephone
and Internet contract details, keep track of historical invoicing data,
view the invoices issued, and make online payments. In addition, such
customers can also add money to their telephone account
or to another phone number operating in the Cyfrowy Polsat network,
activate or deactivate selected services, check credits available for
use in their active services/packages, view the detailed list
of services, get address information of Authorized Points of Sale
and repair centers supporting our telephones and modems.
We understand the clients’ needs well, yet it would be
portfolio: television, telecommunication services,
and the Internet. That is why our customers are served
is dedicated to our television services, including
satellite TV, Home Video Rental, and multi-service
packages offered. Whereas, the second team deals
with telecommunication services, including both
mobile telephony and the Internet. All these issues are
interrelated, and our consultants are trained to know when
scope of expertise. The main goal is to enable a client to
cope with the issue effectively during one call.
61 / STAKEHOLDERS AND INVESTORS / EMPLOYEES
Employees
Attractive employer
Building our image as a good employer, both among potential
candidates and our employees, is certainly one of our priorities.
Cyfrowy Polsat is a very stable, but still dynamically developing
organization. We create an environment of innovation and encourage
our employees to continue to develop and improve their skills.
Therefore, our employees as well as prospective candidates perceive
Cyfrowy Polsat as a company of huge potential and great opportunities.
In 2010, we made a lot of efforts to raise awareness among students
and graduates that our Company is a reliable employer.
We participated in all major career fairs, during which we organized
interesting presentations for students, prepared and conducted by
our experts. Our purpose is to tell these young people that
cooperation with Cyfrowy Polsat means joining a team of professionals
and thus learning from the best.
We attach great attention to the process of recruiting new
employees. We are trying to attract individuals whose personality
and predispositions would match our corporate culture. Knowledge
Employees are our greatest and most valuable asset.
Cyfrowy Polsat is a place where people show a lot of
commitment, eagerness and creativity at work. We employ
a highly professional team of talented people with diverse
experience, interests and characters. We complement
each other perfectly and therefore, acting together, we
are able to achieve really ambitious goals. Thanks to our
committed staff we can provide excellent services to
millions of our customers.
are committed to recruiting and retaining employees that are highly
motivated, effective and feel good being a part of our team. During
the recruitment process we apply various advanced recruitment
or the assessment center.
Our employees are guaranteed opportunities for development and
promotion. As a matter of fact, many persons who currently perform
key managerial functions in our organization, started their professional
career from the position of a specialist. Apart from vertical
promotions, we may also promote our employees horizontally, giving
them chance to expand their competence in new divisions responsible
for other business areas.
In 2010, our activities within human resources were distinguished
the Management Observatory Foundation. This prize is awarded to
companies and institutions that create friendly and safe workplaces,
and ensure optimum working conditions serving to increase the
Job adaptation
A company’s success does not only depend on implementing an
effective recruitment process, but also on its ability to adapt new
employees. Bearing in mind our objective to attract and retain the
best experts available in the market, we do realize that effective
an adaptation program “Cyfrowy Start” dedicated to all newly
employed persons. This is a workshop intended to introduce our new
employees into the Company’s life. During the workshop, employees
key products and services, responsibilities of individual divisions
and departments, and get to know our internal procedures. A large
part of the workshop is focused on the development opportunities,
In addition, each new employee receives a mini-guide on our
organization, which contains all the information presented
during the workshop.
Internships
for students at least in the third year of study in any major,
during the vacation period. These internships are paid and last 3 months.
Throughout the internship period, the trainees help with
the performance of everyday tasks, but also have the opportunity
to participate in ongoing projects. The best trainees are invited
to start a career with our Company. Several persons have already
commenced such cooperation since October 2010.
Development and training
We invest in people, because their skills determine the direction
of the Company’s development. For this reason, we support
our personnel in taking initiatives to upgrade their knowledge
For some time the attractiveness of an employer is no longer seen
solely through the prism of competitive salary. Starting from 2010,
all of our employees have been covered by free medical care.
our employees are also able to realize their personal aspirations.
recreation program subsidized by the employer (till the end of 2010,
nearly half of our employees took advantage of this opportunity).
Personnel development translates into growth of the Company’s value,
which is viewed positively primarily by investors and customers,
but also by prospective employees. Therefore, in 2010, the Management
Board invited the directors of all our divisions to help formulate
the Company’s strategy, including the strategic and operational objectives
for each business area. Implementation of the strategy will be supported
by the MBO (Management by Objectives) program as well as by the annual
assessment program. These programs will enable aligning our operational
activities with the strategic targets. Successful achievement of such
at the same time, will provide the basis for the preparation of training
and development plans.
Depending on the scope of duties performed, our employees may
participate both in general or specialized business courses suitable
for their actual training needs or the Company’s strategic
and development objectives. Last year, our middle and lower level
managers had the opportunity to attend a number of trainings
to enhance their managerial skills. In addition, both managers
and specialists were trained in the areas of project management
and interpersonal skills. Some of such trainings were provided under
Our employees may take English language courses in order to improve
their communication skills, especially with regard to their everyday
activities and contacts with international partners. The Company also
their professional competence by attending specialized post-graduate
studies, professional courses, expert workshops, as well as industry
conferences and trade fairs.
Women’s volleyball, Polsat Sport.
© Polsat Sport.
Having taken care of good health and physical condition of our staff,
and therefore our employees are offered a TV & Internet package
at a stunning good price.
for a company loan with the interest rate and availability much more
favourable than those offered by banks.
Safe workplace
Internal communication and teamwork
As an employer we have a legal and moral obligation to ensure that all
of our employees perform their work in safe, healthy and comfortable
conditions. Therefore, in line with our work safety policy, we use our
best endeavours to control risks and prevent accidents and diseases from
happening in the company. Our goal and intention is to provide decent
and employee-friendly working conditions. In order to achieve that, we
want to create a work environment based on mutual respect, tolerance,
cooperation and commitment, and implement transparent procedures.
Our primary means of internal communication are newsletters
and Intranet, where we try to address all major issues important
to employees, including information on the current corporate events,
key personnel changes, undertaken initiatives, as well as on any
education and motivation competitions organized. In 2011,
the Company introduced a new form of communication involving
the strategic meetings of the Management Board and managerial staff.
In addition to comprehensive presentation of the Company’s strategy,
current situation, and competitor achievements, the purpose of such
meetings is to get people involved in implementation of the strategy,
by improving communication among departments and building
awareness of its importance in achieving a common goal.
applicants, regardless of their gender, age, political or religious
beliefs, nationality, citizenship, sexual orientation, and physical
Women represent 39% of all employees in Cyfrowy Polsat, and nearly
32% of our managerial positions are held by women. We also have
a woman in our four-person Management Board. Furthermore,
our Company employs disabled persons as well as people of different
skin colours and religions.
Structure of workforce in 2010
Average annual employment in Cyfrowy Polsat Group in 2009
and 2010
Average annual employment in Cyfrowy Polsat Group in 2010 by gender
The Management Board of Cyfrowy
Polsat is highly committed to open and
straightforward communication with
employees. With such a huge dynamics of
company development and pace of change,
our foremost challenge is to consistently
build and implement a personnel policy
that would match our business needs. Any
initiatives taken in this regard are aimed
to support achievement of our corporate
strategy, and simultaneously enhance our
image as a good employer, both inside and
outside our organization.
64 / STAKEHOLDERS AND INVESTORS / BUSINESS PARTNERS
Business Partners
Developing long-term and positive relationships with all business
partners (such as broadcasters, program distributors, managers of the
Authorized Point of Sale network, contractors, or service providers)
plays a key role in the effective implementation of our business
strategy – especially since relationships are one of the six basic
resources taken into account by investors when looking for value
in most thriving companies (apart from material resources, reputation,
attitude, competence and knowledge).
We strive to treat all of our suppliers and contractors fairly. When
starting cooperation with new contractors we invite them to
participate in tendering procedures, and our decisions are always
delivery time, client references, and price. As clearly indicated by our
experience, good relationships between a company and its suppliers
reduce the transaction costs. Long-lasting and loyal suppliers are
really appreciated.
We have many reliable business partners with whom we cultivate longlasting relationships. Having trust in such partners is of paramount
importance, which is why our cooperation is based primarily on an
open dialogue. This creates an opportunity for a responsible exchange
of business information – starting with a review of generally available
valuable comments on our products and services, and ending up with
constructive and inspiring ideas to improve cooperation in a given
area. With many of our business partners, we share a common history
or some positive experience from the implementation of previous
projects. We believe that our relationships based on partnership and
trust are the source of competitive advantage of Cyfrowy Polsat in the
marketplace.
© Polsat Play.
65 / STAKEHOLDERS AND INVESTORS / MEDIA
Media
can not operate effectively without ongoing communication and exchange
of information with relevant groups of recipients. With a huge reach
circles that are directly interested in our business operations and
concurrently act as a source of information on Cyfrowy Polsat to other
recipients. Therefore, regular, open and partner-like collaboration with
relations.
Media relations are among the most widely used activities within
PR (Public Relations). They involve the creation and maintenance of
continuing contacts and open dialogue with journalists, enabling both
Effective external and internal communication lays
the foundations for the creation of positive, long-term
partnership relations which help build the company’s
for their journalistic work from such materials, and thereby information
about the company’s accomplishments and achievements, business
operations and plans, new products and services is disseminated to
a wide audience. In order to maintain regular contacts and provide
and respect from all the interested parties and direct
customers for services and products provided by Cyfrowy
Polsat. This is why we are keen to maintain ongoing
communication and involve media members in the
everyday life of our company. This is achieved by ensuring
both those traditional and new technology driven. Such communications
include press releases, product information, news about changes in
description attachments, press announcements, specialist information,
or expert feature articles. We systematically organize media events
aiming to present certain areas of our business in face-to-face meetings,
our set-top boxes factory or at the broadcasting center, meetings with
market experts, as well as special occasion or thematic events. We
also provide journalists with an opportunity to conduct interviews and
individual meetings with the representatives of our management team.
Furthermore, we accept invitations to participate in radio and television
programs as well as in numerous panel discussions that are held during
the industry conferences and congresses.
Great Scenic Railway Journeys, Travel Channel.
© Taieri George Railway/Travel Channel.
providing them with messages on current corporate
events, arranging conversations and interviews with the
company representatives, inviting them to take part in
events that are important for Cyfrowy Polsat.
66 / STAKEHOLDERS AND INVESTORS / REGULATORS
Regulators
Cyfrowy Polsat takes an active part in shaping its market environment.
We cooperate on a continuing basis with all the major industry
organizations and associations. We are also members of the following
organizations: Polish Confederation of Private Employers Lewiatan,
Polish Chamber of Information Technology and Telecommunications
(PIIiT), National Chamber of Commerce for Electronics
and Telecommunications (KIGEiT), Association of Television Program
Distributors SIGNAL, Polish Chamber of Digital Broadcasting (PIRC),
Polish Chamber of Electronic Communications (PIKE), RIPE Network
Coordination Center (RIPE NCC), Association of Stock Exchange Issuers
(SEG), Information Systems Audit and Control Association (ISACA),
Internal Auditors Association Poland.
The current media laws apply to all analogue and digital, terrestrial
television (transmitted over telecom operator networks or over
the public Internet), as well as to multimedia programs and services.
As a listed company we cooperate on an on-going basis with a
regulatory body and other capital market actors i.e. KNF (Financial
Supervision Authority), GPW (Stock Exchange), KDPW (National
Depository for Securities), SEG (Polish Association of Listed
Companies), SII (Association of Individual Investors), ZMID (Polish
Association of Brokers and Investments Advisers). As part of our
active investor relation policy we are in an on-going contact with our
shareholders (Investment Fund Societies, Open Retirement Funds) and
independent brokerage houses.
Being listed on the Warsaw Stock Exchange and engaged in the
provision of satellite pay television and telecommunication services,
our company is subject to numerous regulations. Hence, our business
operations are controlled by multiple supervisory and regulatory
authorities for compliance with the applicable laws and regulations.
Through our membership in professional organizations, we are able
to actively participate in the industry’s key legislative, advisory and
opinion forming processes, by sharing our insights on the solutions and
practices prevailing in the market. Owing to that, we are in position
to guarantee safe and comfortable conditions of cooperation to all
of our stakeholders – shareholders, investors, customers, business
development of our business.
67 / STAKEHOLDERS AND INVESTORS / NON-GOVERNMENTAL ORGANIZATIONS AND LOCAL COMMUNITIES
Non-governmental Organizations
and Local communities
Polsat Foundation
organizations and all kinds of programs to assist those in need.
Our main activity in terms of corporate responsibility is to help sick
children and their parents, who are wards of the Polsat Foundation.
In September 2010, we launched a special SMS service dedicated to
the Foundation. Thanks to this solution customers of Cyfrowy Polsat
mobile telephony can support the Foundation’s account.
We also decided to prepare a charity Christmas card to help the Child
Health Center (2009) and the Nobody’s Children Foundation (2010).
Since 2009, we have resigned from making any traditional Christmas
presents in favour of supporting the Polsat Foundation.
People working at Cyfrowy Polsat have sensitive hearts.
Despite striving to achieve business targets, our Company voluntarily
undertakes to address social needs in an attempt to help people
We are very pleased that in the last 2 years our budget
originally planned for traditional Christmas gifts,
for business partners of Cyfrowy Polsat, was donated to
children of the Polsat Foundation –perhaps including some
little friends of our employees or customers. In 2010,
the Management Board decided to take care of 5-year-old
Polsat is going to cover the girl’s treatment and rehabilitation
expenses over the next 2 years.
68 / STAKEHOLDERS AND INVESTORS / NON-GOVERNMENTAL ORGANIZATIONS AND LOCAL COMMUNITIES
We are glad that each year more
and more companies are willing to engage
in social initiatives, going beyond the purely
commercial. Owing to that, our “Santa Claus
Qurier” action gains new supporters
and is able to reach an increasing number
of locations across Poland. This project
Charitable activities
want to make the Christmas dreams
of poor-family kids come true. This way they
become real miracle-workers – just like Santa
Claus of Myra. Not only did employees of
Cyfrowy Polsat bring joy to our little friends,
but also helped them believe that there are
people of good will, sensitive to human misery.
“Twisted cap” campaign. Millions of caps – including thousands
collected by our employees and their families – have allowed
Cyfrowy Polsat supports the idea of employees’ voluntary work,
even though the concept was not laid down in formal procedures.
Charitable activities are conducted in many areas.
Since 2009 we have cooperated with Stowarzyszenie DOM RODZINA
Foundation). More than 450 of our employees joined the project in order
Signal Association
We hold charity collections on many occasions. In 2010, our employees
of one of our associates. We shipped two lorry transports with
the most necessary cleaning agents, food and clothing for children.
Our employees take up other charitable initiatives as well,
for instance helping stray animals.
Moreover, we strongly encourage our personnel to make a 1% income
Since 2004, we have worked on a regular basis with Stowarzyszenie
integrity in the satellite television industry. Our objective is to prevent
and marketing of counterfeit smart-cards and set-top boxes.
We hope to change the public perception of TV piracy which should
be seen as a theft and rigorously pursued by law.
Sale Support Department,
Quality Division during the Christmas
campaign “Santa Claus Courier 2010”.
69 / STAKEHOLDERS AND INVESTORS / NATURAL ENVIRONEMNT
Natural Environment
Commitment to the environmental protection is a hallmark
of our corporate social responsibility. In this respect we operate
in accordance with the following laws: Act of 27 April 2001 on
environmental protection, Act of 27 April 2001 on waste management,
Act of 11 May 2001 on packaging and packaging waste, and Act of
24 April 2009 on batteries and accumulators. In addition, we have
ISO 14001:2004 and PN-N-19001:2004 for the design and manufacture
We segregate our waste (like used toners and batteries) and collect waste
paper for recycling purposes. In order to contribute to the reduction
of carbon dioxide emissions, we place large emphasis on optimum loading
of trucks delivering our set-top boxes to the whole distribution network
across Poland. In an effort to inspire ecological awareness among
our employees, our corporate newsletter promotes pro-environmental
behaviour. We also encourage our employees to print only necessary
documents and organize various environmental competitions, for instance
on the Earth Day occasion.
In our daily work we also follow the universal principles of good
manners and good practice.
Given the continued growth and development of our business,
we know we are obliged to take responsibility for our actions directly
affecting the natural environment. That is why we strive to conduct
our operations in compliance with the environmental protection laws
and work safety regulations. All the waste we generate is collected
by specialized recycling companies, which have appropriate licenses,
expertise, and waste utilization facilities.
Sunrise Earth, Discovery HD Showcase.
© Discovery HD Showcase.
/ ADDITIONAL INFORMATION
Access card
A smart card which together with a set-top box enables access to paid
satellite television services.
Analogue transmission/signal
A transmission mode in which the input signal (e.g. voice) is converted
into and transmitted as an electric signal. Such signals are transferred
by continuously varying, for instance, the frequency, amplitude or
phase of the transmission. Analogue signals typically require higher
bandwidth to transfer data and are more susceptible to attenuation
problems than in the case of digital transmissions.
APS (Authorized Point of Sale)
A retail point of sale of Cyfrowy Polsat that distributes the services
of satellite television and mobile telephony provided Cyfrowy Polsat.
At such retail points of sale, our customers can sign an contract to
purchase our services, buy a set-top box, and order a professional
satellite dish installation. In addition, our retail points of sale provide
customers with technical assistance, act as intermediaries in the
maintenance of set-top boxes, and supply replacement units while
the customer’s set-top box is being repaired.
ARPU (Average Revenue Per User)
The average monthly net revenue per subscriber (a person who signed
a contract with Cyfrowy Polsat and pays a subscription fee on a regular
basis), which is calculated by dividing the total monthly revenues
generated from sales of our DTH services by the average number
of subscribers in a given period.
BTS (Base Transceiver Station)
A base transceiver station is a piece of equipment that utilizes an
electromagnetic aerial to enable communication in wireless systems.
Channel license
The right to use (dispose of) a television or radio program in precisely
Churn rate
terminated during a 12-month period to the average number of
contracts during such 12-month period. The number of terminated
contracts is net of churning subscribers entering into a new contract
with us no later than the end of the same 12-month period.
CAM (Conditional Access System)
A conditional access module is a device enabling access to DTH
services. A DVB-CI standard compatible decoder is necessary to use
the module.
CAST (Conditional Access System Technology)
An interface to the Conditional Access System.
CRM (Customer Relationship Management)
CRM is a set of tools and procedures, or a system, applied in managing
contacts and relations with customers. CRM is not merely a tool,
it also represents the whole strategy and philosophy of our business
to build and maintain excellent relations with our customers, using
DTH (Direct-To-Home)
A service of providing satellite television and radio channels directly
to home as part of paid channel packages.
DTTV or DTT (Digital Terrestrial Television)
Digital Terrestrial Television is a digital technology aiming to provide
a greater number of channels and/or to ensure better quality of
picture and sound that makes use of radio wave transmission to
a conventional antenna instead of a satellite dish or cable connection.
DVR (Digital Video Recorder)
DVR decoder or digital video recorder is a device that connects to
a television and a source of signal and is capable of recording and
playing back broadcast transmissions by use of a built-in hard disk drive.
EBITDA
Earnings before interest, taxes, depreciation and amortization.
EPG
The electronic program guide that is transmitted as a text menu of
programs available to recipients of digital television signal.
FTA (Free-To-Air)
A term denoting television and radio channels which are unencrypted
and freely available.
GSM (Global System for Mobile)
Global System for Mobile communications. Owing to its omnipresence,
mobile phone operators are able to offer international roaming services
enabling the subscribers to use their phones in many parts of the world.
GSM is much different from its predecessors as both signal and voice
channels are transmitted in digital quality, and therefore it is considered
a mobile telephony system of the second generation (2G).
HDTV
with a higher than standard resolution.
HSPA+ (High Speed Packet Access Plus)
Technology utilizing radio transmission to transfer data with speeds up
to 21 Mbps.
ICSC
Internet Customer Service Center is a web-based application where our
Integrated service
A service offering more than one product as part of a single offering,
usually at more attractive prices.
LTE (Long Term Evolution)
LTE is a wireless network technology that offers several times higher
data transfer rates, increased network throughput capabilities,
and lower latencies.
MIMO (Multiple Input, Multiple Output)
MIMO is a technological solution making use of multiple antennas at
both the transmitter and receiver in order to increase data throughput.
Modem (Modulator – Demodulator)
A modem is a device that converts digital data into an analogue
electronic signal, and vice versa, that can be received over telephone
and television lines or radio waves.
MPEG-2, MPEG-4
Encryption and compression standards for digital audio and video signals.
Multiplexer
A device for combining multiple digital streams, including video,
audio and data.
MVNO (Mobile Virtual Network Operator)
Mobile Virtual Network Operator is a reseller of mobile phone services.
MVNOs do not own a radio spectrum license, nor do they necessarily have
any own wireless network infrastructure. Just like traditional landline
telephone resellers, they sell services under their own brand names,
making use of the existing carriers’ facilities. Nonetheless, MVNOs that run
their own mobile services centers can add value to their offerings.
Operator
A telecommunication company licensed to provide telecommunication
services.
TTS (Text-To-Speech)
An IVR function that enables automatic voice playback of previously
prepared text messages.
Premium channel
A general designation of a television channel offering especially
attractive, high-quality content. By principle, it is a relatively more
VoD
Video on Demand is a service that enables our customers to watch
a chosen program at the time of their convenience.
Pre-paid
Distribution of services provided by a given operator on a prepayment
basis.
nVOD service
– “near video on demand” service means the possibility for the user
to select a program from the offer at the time programmed by the
Operator. Usually the service of this type is available in the channels
Post-paid
The system to buy services under a subscription contract, with
payment after the purchase.
Router
A router is an electronic device that acts as a communication bridge
linking various computer networks.
Satellite broadcasting center
The satellite transmission and reception center of Cyfrowy Polsat
Set-top box
A device that processes an encrypted digital signal into content which
can be received by a TV set. This device is commonly used for the
reception of digital satellite pay television.
SDTV is the standard resolution television, the digital version
of the analogue PAL and NTSC standards.
SMS (Short Message Service)
SMS is a short text message which may be set to another mobile
network user directly from a mobile phone, or over the Internet
(from a website). SMS messages may contain up to 160 characters.
Subscriber
A person who entered into a contract for provision of DTH digital
satellite pay television and thereby undertakes to make payments
in exchange for the access to a package or packages of television
and radio channels, or a person who uses such packages having paid
a monthly fee without concluding a contract.
Thematic package
An additional channel package comprising TV channels from a given
thematic category available to the Family Package subscribers.
Thematic packages offered by Cyfrowy Polsat include: Film Package,
Sports Package, Cartoon Package, Music Package, HBO and Cinemax
Movie Packages.
Transponder
A separate part of a telecommunications satellite that enables
reception of terrestrial signals and their subsequent retransmission
/ CONTACT
Investor Relations
Director of Corporate Communications and Investor Relations
phone: +48 22 356 60 04; fax: +48 22 356 60 03
bdrywa@cyfrowypolsat.pl
Olga Zomer
Spokeperson
phone: +48 22 356 60 35; fax: +48 22 356 60 03
ozomer@cyfrowypolsat.pl

CYFROWY POLSAT - ANNUAL REPORT 2010

Transcription

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