July 2000

Albania Update Memo

The following report outlines new developments in the past three months and the state of on-going developments.

1. Overview

The regulatory framework in Albania does not allow any alternative networks to provide telecommunications services. Albtelecom has a state monopoly over public telecommunications. During the end of 1999 and the beginning of 2000, the Telecommunications Regulatory Entity (TRE) has attempted to liberalise rural telephony. This liberalisation effort will provide further opportunities for companies to enter the telecommunications market and compete with Albtelecom.

2. The interaction between business and regulatory constraints

2.1 The regulatory background

The regulatory framework is an enormous barrier for creating alternative networks in Albania. However, the framework is changing. For example, in March 2000, the National Council of Radio-Televisions (NCRT) decided to license private companies to transmit through radio-television frequencies. At present, there are over 30 TV and radio channels (local or national). However, their existence does not mean that they are going to have the chance to provide internet/telephone services via Cable TV, which does not exist in Albania. Conventional telephony, rather than cable-based technology, remains the exclusive means to provide information/telephone and Internet services.

The Telecommunication Regulatory Entity is drafting the frequencies for televisions and plans to issue licenses to private companies after the completion of the draft. The National Council of Radio-Television (NCRT) will grant licenses to local, private and national radio and television stations and will be responsible for frequency delivery to these entities.

2.2 Business constraints and entry barriers

Despite the liberalisation of rural telephony, there is no operator in the field. A lot of discussions have been going on regarding the feasibility of the New World Company as the operator; however, the company has yet to acquire a license to operate in the field.

Meanwhile, Albapost, which operates postal service in Albania, is reselling rural telephony service provided by Albtelecom. In March 1998, Albtelecom entered into a contract with Albapost to grant Albapost exclusive rights to resell its rural telephony service. Both companies are 100% state-owned entities.

2.3 Attitude of the incumbent operator towards alternative network providers

Not applicable under the circumstances in Albania.

2.4 Ongoing regulatory developments concerning alternative networks

At the end of the first quarter of 2000, TRE prepared the procedures and basic regulations regarding rural telephony. In addition, regulatory changes have been made with respect to the electrical network, which is provided by KESH, the Albanian Energetic Company, a 100% state-owned entity.

In the last few months, a National Strategy of Energy was designed to further develop the energy network and generate new sources of energy. Project has been undertaken along with this new strategy.

Nothing especial happened in terms of using cable. ISDN lines are expected to be used by July 2000.

3. Inventory of the major "public" utilities with potential for use in IS applications:

3.1 Types of companies offering networks

Electrical networks are provided under a state monopoly by KESH, a 100 % state-owned entity. KESH plans to extend its network to Kosovo and cooperate with the neighbouring countries through the Stability Pact. Despite its potential capacity to be used in IS applications, KESH is forbidden by law to provide any telecommunications service.

Cable networks do not exist in Albania.

Due to the state monopoly by Albtelecom, SITA, which provides airway networks, does not provide any public network for telecommunications services.

Water and draining networks, waterways, motorways, railways are all under state monopoly and are controlled by the Ministry of Transport and the Ministry of Public Economy and Privatisation. Under the Stability Pact, there are plans to improve and extend these networks and to build new roads to link Albania with other regional countries. However, no progress has been made in building alternative networks.

3.2 Types of operators using the networks

All the potential alternative networks in Albania are internal networks. They are used only by network providers and not by the general public.

3.3 Types of services offered by the operators on the networks

These networks do not provide any telecommunications service to the general public.