Markets and analysts go insane...

For three consecutive days the indices of stock exchanges were taking on red colour. Analysts finally started arguing whether what we saw was the beginning of the correction and tried to foresee the scale of it. Today the markets around the world turned green and as it’s said in the stockbrokers’ slang, are heading north.

This has something to do with the psychology, to be precise with the phenomenon of self-delusion. Just look at what the investors have just believed in (probably for a short time and to take profits quickly). The US Trade Department trumpeted today the end of the recession in the United States. The growth domestic product of the country rose by 3,5 per cent year-on-year. Taking into account the doom and gloom we had been looking forward to experiencing over a year ago the figure is excellent, no wonder that markets shot up. But wait… Why has the US economy grown by 3,5 per cent? The plan I dubbed a few months ago “resuscitating the corpse” must have worked out. Patient was brought back to life, but at the expense of zillions of dollars and running up huge debts. The subsidies granted under the “Cash for clunkers” scheme and depreciation of dollar also contributed to it. They even seemed to worked a miracle – the inflation rate hasn’t gone up… Yet…!

Dear politicians. If you want to stimulate the economy of your country, print money, blow up the budget deficit, keep the interest rates down. Keynes said: In the long run we are all dead, but why should we die on our knees?

A day earlier the season of announcing the quarterly results began in Poland. The first big company to report its key figures was the TP Group. In general they were worse than expected, to boot some figures topped out for the first time since many quarters. The price of TP shares reacted quickly and plummeted by over five per cent during Wednesday trading session. In an evening commentary analysts put the poor results down to the crisis. How come? The telecommunication industry is not prone to fluctuate during downturns – firstly cause people still need to communicate, secondly many clients are under contracts so they can’t just give up on their phones whenever they wish to. It’s the business model they had adapted and consistently implemented. Lots of trade unions standing up to their privileges, splendid salons, and deplorable infrastructure combined with unreasonable prices (fifty zlotys for the cheapest monthly plan with 60 minutes to landlines included in the charge) only bring people of getting read of the fixed line – the thing of the past in the era of prevalent mobility. Its branch accountable for mobile services – Orange also needs to change its strategy – the rates in post-paid plan are, to put it mildly, unattractive, pre-paid offer doesn’t stand out, but TP managers are presumptively plotting to hammer another nail to its coffin. Prices and transfer limits of mobile internet connections can’t stack up against the ones offered by competitors. Not only by Play, Era and Plus are also much forward. Under such circumstances the outflow of clients is only a matter of time, just like the death of the ailing cash cow. And for this fundamental reason I would never, ever buy the shares of TP…

Goodbye Tepsa... :)

What Bartek and his family have been waiting for almost four years will come to a pass tomorrow. We’ll finally part company with the biggest national provider of internet access and landline phone services. Like many Poles we’ll confine to using mobile phones only. Our new internet provider will be… I’ve endorsed that company too many times so the careful readers will surely guess what the choice was. The new connection will be a bit faster, wireless, partly mobile (the coverage is not nationwide, but limited to 500 cities as the operator declares) and much cheaper. The drawback will be transfer limit imposed by the provider – although five gigabytes allows one to surf the web conveniently, downloading more than one or two films a months is up in the air.

A decade ago having a mobile phone in Poland was an extravagance. Since then the call charges have fallen by 85 per cent, handsets have become much more affordable so the penetration (number of mobile phones per citizen) of the market exceeded 100 per cent – everyone has a mobile these days, including pensioners, children from nursery school, drunkards, even the homeless. Meanwhile the landline, still regarded as a basic form of providing telecommunication services tends to be luxurious and maintenance costs are unreasonable. Currently the cheapest monthly plan of Telekompromitacja Polska S.A. costs 50 zł (unless you can submit the slip from local social welfare centre (Ośrodek pomocy społecznej) – then you’ll get the cheaper one, for 18,30 zł) and includes 60 minutes to national landlines. Ludicrous – for sixty minutes of calls to the landlines from my mobile phone I’d pay 3 zł. TP S.A. will charge you round seventeen times more for such doubtful pleasure. Doubtful for sake of the quality of calls, cracking, humming and other noises are what you should expect to hear in your receiver.

Below: the “infrastructure” of TP along my street…


Infrastructure is the official term for those strings tied up together and hanging on the concrete posts. To the left – white box attached to the post – a makeshift device used in 2005 to connect my house to the line, the wires run downwards to the white pipe, also fixed to the post. In the middle, just in front of the lamppost one can notice a beautiful hook-shaped object and one of the wires hanging down – this is the trace of the breakdown caused by Kiryll hurricane in January 2007. To the right – the rusty pipe through which the wire to my neighbours’ house runs. Makeshift all the way, don’t pay too much attention to the stonemason’s plant at the opposite side of the street. They’ll never tidy up there, it’s a matter of mentality, they don’t mind the squalor ('dziadostwo' in the “rightest” context)…

When inquired about the lack of investments in infrastructure in our locality, TP representatives replied according to their calculations it wouldn’t be cost-effective to put the wires underground, so it will stay like this until it falls apart. Such stance means that locals will be deprived of the access to the fast Internet for years – the capacity of such infrastructure is 700 – 800 kbps, what in two or three years will not be classified as broadband connection. In the West 10 to 20 Mbps becomes a standard, in Poland UPC is the provider which develops its infrastructure to provide its clients with such speed of connection, TP does nothing to improve its services. Moreover – its representatives claim their activity is barely profitable, only the price for the end-user is exorbitant. It’s the main reason why so many people turn them away. Assuming that customers’ decisions are based on cool calculation and common sense, the number of TP individual clients should drop drastically within the next five or ten years. French owners milk their cash cow to the limits, but one day the cow will die…