Identifier
Created
Classification
Origin
05WARSAW3178
2005-08-23 11:47:00
UNCLASSIFIED
Embassy Warsaw
Cable title:  

POLAND: U.S. PROVIDER SEEKS TO OFFER VOICE

Tags:  ETRD PL ECCP 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 WARSAW 003178 

SIPDIS

DEPT PASS TO USTR J. HALE

E.O. 12958: N/A
TAGS: ETRD PL ECCP
SUBJECT: POLAND: U.S. PROVIDER SEEKS TO OFFER VOICE
- SERVICES


SENSITIVE BUT UNCLASSIFIED: THIS CABLE CONTAINS BUSINESS
PROPRIETARY INFORMATION. NOT FOR INTERNET DISTRIBUTION

-------
SUMMARY
-------

UNCLAS SECTION 01 OF 02 WARSAW 003178

SIPDIS

DEPT PASS TO USTR J. HALE

E.O. 12958: N/A
TAGS: ETRD PL ECCP
SUBJECT: POLAND: U.S. PROVIDER SEEKS TO OFFER VOICE
- SERVICES


SENSITIVE BUT UNCLASSIFIED: THIS CABLE CONTAINS BUSINESS
PROPRIETARY INFORMATION. NOT FOR INTERNET DISTRIBUTION

--------------
SUMMARY
--------------


1. (SBU) California TOK, a Delaware-registered firm, is
making ambitious plans to enter the Polish telecoms market
with inexpensive international voice services. Although the
service will rely on an individual customer's existing
broadband connection, the company eschews labeling its
service voice over internet protocol (VOIP). A major appeal
of the service in addition to the low price, believes the
firm's representative here in Poland, is the ease of use and
setup, factors that have been missing from some VOIP
services. End Summary.

--------------
DON'T SAY VOIP, SAY "TOK"
--------------


2. (SBU) Econoff met with Stanislaw Lewak (protect),
general manager of California Tok to discuss the company's
plans to introduce its calling service for the Polish
market. Lewak began his presentation by emphasizing that,
as far as marketing his service goes, he never, ever says
"VOIP." "People hear that word, and their eyes glaze over,"
Lewak said. "I want our customers to have an absolutely
trouble-free experience with our service, right from the
moment they set up." California TOK uses a Cisco VOIP
router that connects directly to a standard telephone RJ-11
jack and to the Ethernet port on a broadband modem.

--------------
SMALL INVESTMENT, (POTENTIALLY) BIG REWARDS
--------------


3. (SBU) Lewak said that TOK's current investment in
Poland is about $500,000, although he expects to see that
amount double when service is officially launched. He
emphasized that TOK saved tremendous amounts of time and
money by establishing a branch office, rather than a legal
subsidiary, in Poland. The paperwork for a branch office is
much less than that required for a subsidiary, and for TOK's
purposes, at least, gets the company all the legal presence
it needs. Lewak said that his firm got approval from the
Polish telecoms regulator (URTIP) as both a voice service
and a "telecommunications (read data) provider," and was
surprised (as was Econoff) at URTIP's openness to TOK's
application. The firm plans to offer 100 minutes of talk
time anywhere in Europe and North America for 49 Zloty
(about 15 dollars) per month, with per minute charges after
that of less than 10 cents per minute. This is far and away
cheaper than rates charged by Telekomunikacja Polska (TPSA),
which still dominates the telecommunications market in
Poland, and offers the most popular DSL-based broadband
access in Poland. And that presents a major challenge for
TOK.

-------------- --
TPSA MODEMS AND TOK SERVICE: GEEKS NOT INCLUDED
-------------- --


4. (SBU) TPSA's DSL service is primarily delivered through
universal serial bus (USB) DSL modems. These modems have no
Ethernet ports; rather, they plug right into the computer
and, utilizing the "plug-n-play" abilities of Microsoft
Windows, set up a direct connection to the internet. In
order to use TOK's VOIP box (or any other router-based
application, such as a wireless network access point),the
customer must use an Ethernet modem. Currently, TPSA
charges twice the amount for an Ethernet modem as it does
for its cheapest USB option. In addition, TPSA has also
rigged its Ethernet modems to block VOIP traffic.

--------------
KICKOFF WITH A LAWSUIT?
--------------


5. (SBU) California TOK plans on launching its service
officially in Poland in September. In addition, it is
looking seriously at suing TPSA for violating EU antitrust
regulations because of the Ethernet modem issue. Lewak
confided that, in reality, it has no effect on his business.
Subscribers to TOK are hooked up by a visiting technician
well-equipped to bypass the TPSA access limitation. In
fact, Lewak said, he hopes that the publicity of a lawsuit
may actually help TOK in its ad campaign, set to begin soon
in cooperation with a Warsaw radio station (and investor) in
the service.

--------------
TOK IS CHEAP . . .
--------------


6. (SBU) Time will tell if TOK really becomes a viable
voice services provider in Poland. But if it does, it will
be a prime example of how for very little money, innovative
U.S. firms can exploit technological advantages in
restrictive telecoms markets to challenge stultified
incumbents and make a profit as well.

HILLAS