Market Trends of poland data center Industry
Increasing smartphone apps across end users and subsequent adoption of 5G smartphone devices leads to demand for data center
- Smartphone usage in Poland has increased over the years, as evident from the rising smartphone penetration rate in the country. The smartphone penetration rate rose from around 60% in 2016 to about 86% in 2021, accounting for a significant increase in the country's overall smartphone usage and the evolution of its network portfolio. The smartphone penetration rate is further expected to grow to about 88% by 2025.
- The network evolution has played a vital role in enhancing the user experience offered by different smartphone apps across end users and purposes. With the introduction of 5G in 2020 by prominent service providers, the improved data transmission rates and processing power in smartphones contributed to the increase in smartphone adoption, in turn driving the growth for tier 3 and tier 4 data center facilities for uninterrupted computational and storage service. In 2020, the Office of Electronic Communications reported an increase of 21.06 Mbps in the average download speed of a mobile application across internet providers in Poland, which rose to 34.82 Mbps in 2021 and 41.7 Mbps in 2022. The significant increase in 2021 can be attributed to the introduction of 5G and the subsequent adoption of 5G smartphone devices to leverage the new technology, which resulted in higher transmission rates.
- Active mobile phone ownership rates also shape smartphone penetration and sales in the country. About 51.6 million SIM cards were active in Poland in 2018, compared to about 56.6. million active SIM card owners in 2021. This signifies the active participation of users in shaping the user base for data centers during the COVID-19 pandemic, which saw an increase in smartphone usage in Poland. End-user segments like e-commerce, which can be easily reached through smartphones, influenced the normalizing of smartphone use with an increment in the number of registered e-commerce stores in Poland, rising from about 36,600 stores in 2019 to nearly 55,000 in 2022. The increment reflects the growing preference of users to avail of these e-commerce services through convenient access points like smartphones, making their growth interdependent with data centers. Thus, as smartphone usage increases in the country, the demand for data centers to handle the generated data will also increase, contributing to the market's growth over the forecast period.
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Increasing FTTP users and investment such as Recovery and Resilience Facility (RRF) and the European Regional Development Fund (ERDF) towards broadband inclusion leads to the market growth
- The increasing data consumption and demand for higher data transmission rates are driving the evolution of fixed internet usage in Poland. The fixed broadband penetration in the country increased from about 62% in 2019 to about 69% in 2021, getting closer and in line with the EU average of 78%. About 28% of Polish households in 2019 featured at least 100 Mbps fixed broadband take-up, compared to about 43% in 2021, which was in line with the EU average of 43%.
- This growth in the average household broadband take-up is attributed to the country's higher preference for services like FTTP. Poland witnessed an increase in FTTP coverage from 44.6% in 2020 to about 51.9% in 2021. The urban take-up of the service was higher than the rural adoption, generating significant demand, as the rural coverage of the services remained at around 32.6% in 2021, with a moderate increase from the 24.1% registered in 2020. This signifies the deeper penetration of FTTP technology in the country, which is expected to generate more data-generating nodes and contribute to extensively generating data sets through the forecast period.
- Despite the preference of the majority of the Polish population to find faster yet normal speeds for data consumption, the deeper penetration and infrastructural development of broadband services are already attracting investments from the Polish government through funds like the Recovery and Resilience Facility (RRF) and the European Regional Development Fund (ERDF) contributing about EUR 2 billion to add to the broadband inclusion of more than 1.5 million households. Such factors are expected to facilitate faster data transmission and lay the foundation for a highly potent fiber network in Poland, connecting data centers with edge computing stations such as internet exchanges and telecommunication service providers.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Increase in hybrid work models and switch to faster smartphones due to increase in mission critical and real time applications leading to market demand
- Development in fiber connectivity infrastructure by companies such as FiberForce, DE-CIX and Corning leads to the major market demand
- Infrastructural developments and increase in 5G stations is leading to demand for data center with increase in data traffic
