April 2000

Estonia Master Report

Alternative infrastructure in the meaning of this document is the infrastructure of telecommunications owned by companies for whom provision of communication services is not the main activity, but rather only contributes to the main activity. Such companies can be companies of power engineering, railroads, road maintenance, etc. Alternative communication networks are also deemed to mean communication networks owned by organisations that do not use public communication networks for some reasons (security, price, etc).

The role of alternative networks in Estonia has been low. It follows from the facts that during 1940 – 1991 Estonia was a part of the Soviet Union and the national communications networks were part of the Soviet networks. Also, the prices for telecommunication services were fixed by the State. There was no possibility to build and operate alternative networks. After regaining independence on August 20, 1991 the Estonian telecommunication market started to develop rapidly and by year 2001 (with the ending of the exclusive rights granted to AS Eesti Telefon) the market should be completely liberalised. Consequently, operating in the telecommunication market (incl. operating alternative networks) is at the moment discouraged both by the existing legislation and by rapid technological advancements causing enterprises to be on awaiting position as the positive and negative aspects of the technology of telecommunication services they are operating and development trends are not clear.

This report covers the following companies offering public services and/or owning public infrastructure that are or could be active in the telecommunication market:

• power engineering company Eesti Energia AS;
• water supply company AS Eesti Veevärk;
• railway company AS Eesti Raudtee;
• gas company AS Eesti Gaas;
• cable distribution companies

Developments of 1999 can be briefly summarised as follows:

• concerning the companies providing public services there have been no considerable developments from the aspects of their activities in the telecommunication sector;
• the cable distribution market is becoming organised after the coming into effect of the Cable Distribution Act;
• cable distribution operators are making preparations for the ending from 2001 of the exclusive rights granted to AS Eesti Telefon;
• competition is becoming more intense in the Internet services market.

1. Constraints to co-operation between businesses and regulatory constraints

1.1 The regulatory background

The area of telecommunications is regulated with:

• The Concession Agreement signed between the Government of Estonia and the Estonian Telephone Company in 1992.
• The Cable Distribution Act (Kaabelleviseadus, State Gazette [Riigi Teataja], RT, 1999 [year], 25 [number], 362 [article]) entered into force in June 1999.
• Telecommunications Act (Telekommunikatsiooniseadus) adopted in 2000 and partially in force (RT I 2000, 18, 116).

1.1.1. Concession Agreement

The main factor influencing the Estonian telecommunications market has been the Concession Agreement signed in 1992 which granted exclusive rights to ETC for eight years (till 01.01.2001) to provide basic services (national and international switched fixed voice telephony services, telex and telegraphic services, their installation and interconnection to them).

1.1.2. Communications Act

The Communications Act was the main law regulating the Estonian telecommunication market from 1991 till the entry into force of the Telecommunications Act in March 2000, recently adopted by Riigikogu (Parliament). The Communications Act (Sideseadus, RT 1991, 3, 49) established the rights and obligations of legal entities and individuals in the possession, use and disposal of means of communication and communication networks and organisation of communication networks in the Republic of Estonia, also the general principles of liability for the violation of communication law. With the adoption of the Telecommunications Act all sections regulating the telecommunication market were deleted in the Communications Act. At the same time all provisions concerning the postal services network remained in effect. The Government of the Republic regulations and the regulations of the Minister of Transport and Communications that had been regulating this area till the entry into force of the Telecommunications Act lost their effect as well.

1.1.3. Telecommunications Act

Consequently, currently the main law regulating the area is the Telecommunications Act with which the state intends to create favourable conditions for the development of telecommunications and to promote free competition.

The term alternative networks is not explicitly used, although the Act regulates the area.

§ 2. Telecommunication service

(1) Telecommunication service is the transmission or routing of signals on telecommunications network or networks and the establishment of connections between termination points of a telecommunications network or networks. Telecommunication service does not include broadcasting.

(2) For the purposes of this Act, a telecommunication service is public if it is accessible to all users on equal basis.

1.1.4. Cable Distribution Act

Another important law is the Cable Distribution Act that regulates the terms of deployment and conditions of operation of cable networks, and the provision of cable television services and telecommunications services by cable operators. The Cable Distribution Act came into effect on June 1, 1999.

The following definitions are used in the Act:

Section 2. Cable Distribution and Cable Distribution Network.

(1) Cable distribution in terms of the present act is the transmission of television and radio programs to subscribers via cable distribution networks.

(2) Cable distribution network in terms of the present act is a system of technical means to transmit programs to subscribers.

The Act also regulates the provision of telecommunication services via cable networks. Telecommunication service has been defined as follows (§ 11):

(1) Telecommunication service is a service the content of which is entirely or mostly the transmission of signals via telecommunication network and establishment of connections between the end-points of the network.

(2) Telephone service is a telecommunication service, which enables the user an access to telephone network and the real-time voice transmission between the destinations of the network.

1.2 Commercial restrictions and entry barriers

A public telecommunication network can be operated and a public telecommunication service can be provided by an entrepreneur that has the respective authorisation from the state (Detailed explanation in 1.2.3). In case an owner of alternative communication networks wants to provide a telecommunication service to another enterprise, the operating permit is not required, unless there is a connection with a public communication network. At the same time provision of a large part of telecommunication services has been currently established as an exclusive right of Eesti Telefon and the markets will open on 1 January 2001.

1.2.1. Concession Agreement

One of the main entry barriers that discourages operating in telecommunications market (including provision of telecom services through alternative networks) is the Concession Agreement that granted exclusive rights in the provision of basic services (national and international switched fixed voice telephony services, telex and telegraphic services, their installation and interconnection to them) to the Estonian Telephone Company.

Nevertheless the Concession Agreement provides:

The concession holder shall, on terms and conditions to be agreed between the concession holder and the party interested in interconnection, allow, facilitate and effect the interconnection to its network of the Basic Services and systems of other telecommunications operators, according to the Communication Act of the Republic of Estonia, and established international standards. (§ 4.12 Concession Agreement)

For the building and management of a public local network a respective application has to be submitted to the concession holder that can make a subcontract on the management of the local network. (§ 5.3).

Non-basic telecommunication services (e.g. mobile and data communication, paging services, satellite communication or value-added services) can be offered freely although a licence is needed for building and operating networks and/or if there is interconnection to the PSTN. There is competition in all of these liberalised markets.

1.2.2. Cable Distribution Act

The Cable Distribution Act (§ 12) has stipulated a conditional local monopoly established through a public tender arranged by the National Communications Board:

(1) The areas of cable distribution networks to be built in the territory of municipalities shall be established by the local council, specifying the entire territory of a municipality as the area of one cable television network or dividing it into several areas of cable television networks, proceeding from the number of potential subscribers and from the aim that cable distribution should be secured in the entire territory of the municipality.

(2) The National Communications Board shall issue one or several cable television network licenses in each cable television network area by way of public tendering procedures.

(3) The National Communications Board shall issue one cable television network license in each cable television network area by way of public tendering procedure, if the applicant of the license commits to secure in addition to the retransmission of programs also the provision of telephone services to the extent of the entire cable television network in the course of eight months from the reception of the license.

The Cable Distribution Act excludes the operation of dominant telephone network operators in the cable distribution market and there are also several other restrictions:

Section 8. Owner of a Cable Television Network

(1) An undertaking entered in the commercial register in Estonia which has been issued a cable television network licence pursuant to this Act may be the owner of a cable television network.

(2) The owner of a cable television network shall not be a company which accounts for more than 40 per cent of the turnover in the market of telephone services provided for in § 11 of this Act which are rendered in Estonia; the owner of a cable television network shall have no economic interest in such company.

(3) For the purposes of this Act, "economic interest" provided for in subsection (2) of this section means:

1) belonging to the same group; or

2) if all or some shareholders or owners are the same directly or through third persons; or

3) holding in another undertaking directly or through partners, shareholders or third persons, which exceeds 2 per cent.

(4) The group of persons with holdings in an undertaking which is the owner of a cable television network, and their holdings in third undertakings shall be transparent.

The non-transferable activity licences for the duration of ten years, stipulated in the law, for the construction and operating of the cable television network are issued by the National Communications Board:

(1) "Cable television network licence" means an activity licence issued by the Communications Board which entitles the person indicated therein to construct, own and use a cable television network under the conditions specified in the licence.

1.2.3. Telecommunications Act

The adoption of the new Telecommunications Act has changed the earlier system for the issuing of activity licenses. The entrepreneurs that were operating in the telecommunications market before the entry of this law into force have to submit a notice and application for activity license to the National Communications Board by 1 September 2000. After that they will have the right to continue their earlier activities till the decision of the National Communications Board. To new companies entering the market the new act shall be applied from 1 August 2000.

To operate a public telecommunications network or a telecommunications network connected with it or with a telecommunications network located in a foreign country or to provide a telecommunications service, a person has to notify the Communications Board in writing. The information needed in the notices is stipulated in § 9 and the persons may commence after the notice has been registered in the Communications Board (§ 10).

Besides notification the person has to obtain in certain cases the license that is not transferable and issued for a term of ten years unless the applicant for license requests a shorter term (§ 12):

(2) A license is required for the operation of a public telecommunications network if the operation is based on:

1) use of allocations of radio frequency channels from the national radio frequency allocation plan, or

2) use of allocations of number series from the national numbering plan.

(3) A license is also required if a telecommunications network is interconnected with a public telecommunications network or a telecommunications network located in the territory of a foreign country.

The license shall be issued not later than within six weeks after the receipt of an application according to the requirements at the Communications Board.

Besides the licence there is also the non-transferable technical authorisation licence that is granted for a specified time for the use of the limited resource of telecommunications (§ 18).

2) The types of technical authorisation include:

1) permit for the installation of radio transmission equipment together with the reservation of the corresponding radio frequency channels;

2) permit for the use of radio transmission equipment;

3) permit for the use of number series, identification codes or short codes together with the reservation of the corresponding number series, identification codes or short codes.

(3) The conditions to be established by a technical authorisation:

1) efficient use of radio frequencies and ensuring control thereof;.

2) use of number series, identification codes or short codes;

3) compliance with the environment, health protection and planning requirements;

4) ensuring of the quality, availability and reliability of a telecommunications network.

The Communication Board decides the issuing of the licence or refusal within six weeks.

The Act regulates the organisations with significant market power with special provisions. These enterprises are determined by the Communication Board, taking into account the concrete market of telecommunication services and the area. These are enterprises enjoying the exclusive right granted by the state or local government to operate in the (local) communications market and/or whose market share together with the parent undertaking or subsidiary is at least 25 per cent of the turnover of the concrete public telecommunication service market or at least 25 per cent of the traffic in the case of the interconnection service market and who do not prove that the holding of such market share does not endanger free competition. (§ 8).

As an exception, the National Communications Board can deem also an entrepreneur whose market share accounts for less than 25 % of the turnover of the particular market to be an entrepreneur with a significant market power (§ 8). The decision on entrepreneurs with a significant market power is adopted for each year by 1 December of the previous year. In case the market share of an entrepreneur accounts for at least 40% of the turnover of the market, the activities of such a company as an entrepreneur with a significant market power are regulated in addition to this act also by the Competition Act (RT I 1998, 30, 410; 1999, 89, 813).

Entrepreneurs with a significant market power are obliged among other things:

• to provide a dedicated line service through its telecommunication network (§ 33);
• to make a connection contract and connect its telecommunication network with another telecommunication network in a connection point applied for, within two months from the reception of the respective application. In case no agreement is reached concerning the connection conditions, the National Communications Board shall settle the dispute (§ 41);
• to enable an operator to use the disengaged volume of the line structure (§ 91).

1.3 Attitude of the incumbent operator towards alternative network providers

According to the opinion of the Estonian Telephone Company the role of alternative networks in the voice telephony market is low. Monopoly status in the provision of international phone calls is protected by the Concession Agreement. In the data communication market the situation is different – ETC has been operating in competitive environment from the very beginning.

Eesti Energia AS, AS Eesti Gaas, AS Eesti Raudtee and others use mainly corporate networks for internal communication. ETC has not given any official information at the moment considering their plans to extend their respective services after the end of Concession Agreement. We can, however, assume that foreign investors/operators could be interested in the Estonian market after the expiry of the exclusive rights granted with the Concession Agreement.

Main competition is believed by ETC to take place in the international long-distance calls area. There could be also increasing competition in the data communication market.

1.4 Legislative developments concerning alternative communication networks

The overall developments of the Estonian telecommunications policy are oriented towards liberalisation. This means the end (1 January 2001) of the exclusive rights granted to ETC with the Concession Agreement. With this the provision of basic as well as non-basic services will become free and the Estonian telecommunication market will be liberalised in line with the demands of the European Union.

Considering the turnovers in the telecommunication market and the development potential of this area there will be court actions, applications for the review of laws, etc. The following processes are currently going on:

• As the main owner (60%) of the cable distribution company Starman Kaabeltelevisiooni AS that has 26% of the subscribers of the Estonian cable distribution market is the big Swedish concern Telia that is also one of the owners of AS Eesti Telekom (24.5%), the further operation of AS Starman in the cable distribution market should be excluded. Therefore AS Starman filed an application to the Legal Chancellor in the middle of March this year, asking him to review the sections of the Cable Distribution Act that regulate ownership relations and are allegedly at variance with the Constitution and with the Association Agreement made with the European Union. At the same time the Swedish telecommunication concern Telia has already declared its decision to sell its 60 % participation in AS Starman.

• The Tallinn Administrative Court will continue on 3 May the proceedings concerning the complaint filed by Supertel Eesti OY against the Ministry of Roads and Communications. In 1999, Supertel Eesti OY started to provide long-distance calls through the Internet, but according to the precept of the National Communications Board, AS Eesti Telefon deprived the company of the possibility to use connection lines and number series.

• Starman Kaabeltelevisiooni AS has disputed the issue of a cable distribution activity license to Tallinna Kaabeltelevisioon that is using the trade mark Tele2. The license is in effect for ten years and allows to create a cable television network that is covering entire Tallinn.

• Tallinna Kaabeltelevisioon operating under the trade mark TELE2 has started to take over subscribers from other cable distribution companies. At the same time other companies (STV, Starman, Telset) are not interested in selling their networks. Takeover of subscribers by TELE2 has proceeded more slowly than the Cable Distribution Act requires.

2. Inventory of the major "public" utilities with a potential for use in IS applications

2.1 Types of companies owning networks

2.1.1 Public utilities and their networks

AS Eesti Energia is 100% state-owned energy company. It produces 97 % of Estonia’s electrical energy and with about 7500 employees is a major employer in the country. The length of airlines is 117,221 kilometres and cable lines 6,000 kilometres.

The special department, established already in 1949, is dealing with communication networks. The corporate network covers the whole Estonian territory connecting all major energy facilities – power stations, management centres, etc. There following technologies are used:

• analogue channels (n x 64 kbit, n x 2Mbit),
• radio links (2, 15, 18 GHz),
• operative AM radio communication networks
• optical cable systems.

The networks of the company are mainly used for corporate purposes. The usage area covers the telephony inside the company with connection to the public network of Estonian Telephone Company (29 digital stations) and data communication. The latter is used for operative data communication and to transmit the commercial data of the electricity system as well as to connect the computers of the company.

In the short-run, there are plans to develop image transfer services for operative management, security control and videoconferencing. Long-run plans are not clear at the moment but large-volume co-operation with major telecommunication operators could be considered.

AS Eesti Gaas is a joint stock company in private law, based on private capital and owned by three of the large gas companies in Europe (Russian OAO Gazprom (31%), German Ruhrgas AG (32%), Neste OY (10%)) and smaller shareholders, among whom there are individuals and legal persons. The activities of AS Eesti Gaas focus on the purchase, sale and pipeline transportation of natural gas. In addition, the company is engaged with gas system construction, gas meter verification and the training of gas-related specialists for the company.

The customers of Eesti Gaas and its subsidiaries include 141,948 residential clients, 615 commercial and public institutions, 173 industrial consumers, 60 district heat generators and 4 heat and power co-generators. The company and its subsidiaries manage 848 km of transmission pipes, 27 gas distribution plants, 2 gas measuring stations and 1243 km of gas distribution pipelines. There are currently 515 employees in Eesti Gaas.

The corporate communication network was established during the Soviet period, when installing a communication cable along with a gas pipe was very common. Today the network is used for internal telephony and data communication with gas distribution centres.

No strategic decision has been adopted about the future of the communication lines. In the sections where the company does not use the full capabilities of the network, they are willing to rent it out. On the other hand, they rent some channels themselves from the Estonian Telephone Company, because for instance in Tallinn and also elsewhere their own network only reaches the borders of the town.

AS Eesti Raudtee is the biggest public 100% state-owned transport company. It has 5700 employees and operates 62 stations.

The field of information and communication technology is especially important for operative communications, but also for connecting to the inter-company data communications network extending to several directions all over the country. For corporate communications, both analogue and digital transmission is used. Backbones (copper and optics) and radio transmissions are used as channels. There is also connection to the public network of the Estonian Telephone Company.

The main thing that is considered in developing the communication system is its stability. It is guaranteed by the inclusion of free resources and creating a possibility for parallel usage of different communication types. Free resources are created by doubling equipment (double processors in the telephone stations) or communication channels (rerouting). Both processes have already been started and are being actively developed.

There are also plans to start the digitisation of existing channels going through communication backbones (copper), in order to create a backup solution for established radio linkages and optic cables.

In the field of telecommunications co-operation with other enterprises takes place in renting out free channel volume (radio links to mobile phone operators) and providing telephone services (to companies closely related to Estonian Railways).

No strategic decision on what to do with the communication networks after liberalisation in co-operation with other service providers has not been made yet.

AS Eesti Veevärk is a private enterprise that has 33 shareholders, 29 of whom are local governments (most of them have a participation of ca 0.1 - 4.6 % each). Other shareholders are NEFCO (11.2%), AS Tartu Veevärk (13.2%), AS Narva Vesi (13.8%) and AS Võru Vesi. The company employs 40 people.

The company has no internal communications networks. However, the need for internal communication networks is felt since it would enable to communicate with lower costs and more operatively. There are no more concrete plans yet.

2.1.2. Cable distribution

The most widespread provision of telecommunication services is foreseen to be by cable distributors. Wide-scale cable distribution started in Estonia in 1987 when Levi Kaabel (belonging to Levicom Group) established the first cable TV network in Kuressaare town. There was overall rapid development in Europe in this area as it was possible with simple equipment to receive and transmit dozens of programs. This development was followed in Estonia. The development of cable TV took place mainly in the Western, Central and Southern parts of Estonia where only a few TV programs transmitted by local transmitters were available in contrast to Northern Estonia.

The second leap in the Estonian cable TV market took place in 1992 when local transmitters stopped the transmission of Russian television programs. The rapid development of cable-TV networks started in Tallinn and other places in Northern Estonia where most of the Russian-speaking people live. This was also a period of cable television piracy, as most of the established networks of Northern Estonia (including those built in Tallinn) were not technically nor legally correctly built.

The third milestone is the adoption of the Cable Distribution Act in spring 1999 by Riigikogu (Parliament), in force since June 1, 1999. This law started to organise the market to an important extent and establish conditions for the development.

By now there is intense competition in the market. There are 135 private entities and according to unofficial data cable TV is available to ca 30% of the population and ca 50% of the homes that are in the districts covered by cable TV have connected to it.

The cable TV operators in Estonia could be divided into three groups:

• The first group consists of the leading Scandinavian telecommunication corporation Netcom AB (trademark Tele 2) in Estonia. Its subsidiary Levicom Broadband operates fixed telecommunication networks including cable TV networks in Estonia and Lithuania. Levicom Broadband is a holding company that owns two cable TV operators in Estonia - Tallinna Kaabeltelevisioon and Levi Kaabel. 
  
  Tallinna Kaabeltelevisiooni AS was established in 1994. It is operating in Tallinn and has a permanent cable TV license for the term of ten years (the license has been disputed by Starman Kaabeltelevisiooni AS) that has given them the exclusive right for the creation of the cable TV network that covers entire Tallinn.
  
  At the same time the Swedish telecommunication concern Telia has declared its decision to sell its 60 % participation in AS Starman. This follows from the Cabel Distribution Act: the owner of a cable television network shall not be a company which accounts for more than 40 per cent of the turnover in the market of telephone services provided for in § 11 of this Act which are rendered in Estonia; the owner of a cable television network shall have no economic interest in such company.
  
• The second interest group in the Estonian cable -TV market is Swedish national telecommunications concern Telia AB (through its subsidiary Telia InfoMedia AB), which owns 80% of the cable TV operator Starman Kaabeltelevisiooni AS. Starman is currently the biggest cable TV operator in Estonia, accounting for 27% of the market. 
  
  At the same time the Swedish telecommunications concern Telia has announced its decision to sell its 60% participation in AS Starman due to the Cable Distribution Act that came into force in June 1999 and according to which an owner of a cable TV network cannot be a company that accounts for more than 40% of telephone services provided in Estonia or is related with such a company through economic interests.
  
• The third group of cable-TV operators consists of operators based on local capital. The biggest of them are STV Kaabeltelevisioon and Telset in Tallinn and RHR Grupp in Pärnu. 
  
  AS STV Kaabeltelevisioon (STV) was established in 1991 and by now the company has become a significant actor in the market. Through cable modems, both data communication services (with connection to the Internet) and telephony services are provided.

The trend described in the earlier reports – purchase of smaller networks by larger cable distribution operators – has been confirmed again. In summer 1999 Starman acquired Antenna3, an operator that had been operating at Sillamäe.

In several small Estonian towns the cable TV operators use conventional coax networks working in 47-230 MHz frequency bands (ca 16-18 TV channels). To develop these networks into telecommunication networks with bi-directional communications, huge investments are needed and it is still technically problematic. To some extent, the existing networks could be developed to offer Internet services via cable modems.

Most cable-TV subscribers are, however, located in Tallinn, where almost all operators are using higher frequencies (up to 860 MHz) that enable to broadcast up to 50 TV channels. The topology of the network and the technology remain the same (coax cable network) but it is technically easier and less expensive to develop these networks into two-way telecommunication networks.

STV Kaabeltelevisioon, Telset and Starman Kaabeltelevisioon are using HFC-technology (Hybrid Fibre Coax) where local coax networks are connected to main stations via fibre-optic network. The technology and topology of local networks is similar to those mentioned above except in in-house networks that are developed based on star topology that enables more easily to provide to customers different packages of TV programs.

Levicom Broadband (Tallinna Kaabeltelevisioon in Tallinn and Levi Kaabel in Tartu) uses modern FTTB (Fibre-To-The-Building) network structure where every house is connected with a circle topology fibre network. In-house network is star topology network, where coaxial cable with two pairs of copper lines is used to reach the clients. This enables to provide all telecommunication services. This network is ready for offering telecommunication services and its bandwidth is much wider compared to conventional telephone network.

The Distribution of the Estonian Cable Television Market between Different Operators, November, 1999*

Source of Information: Estonian Association of Cable Networks
* According to some data the total number of customers reaches almost 200 000, 110 000 of which are customers from Tallinn.
** Operators operating on local capital.

2.1.3. State Networks

2.1.3.1. Network of Governmental Institutions "EEBONE"

One of the initiatives aimed at extending the computer networks of Estonian governmental organisations, is a national program EEBone ("PeaTee"). The program was initiated by The Department of State Information Systems of the State Chancellery.

The purpose of the project is to make the introduction of data communication networks within state agencies or their sub-units located in rural areas quicker and more simple and to cut down total expenditures of the state on data communication.

As of 1 February 2000, 462 sub-units of state agencies with 363 connection points have been connected to EEBone.

EEBone is based on using Internet TCP/IP technologies. It is based on routing technology and is capable of making use of different technologies (TDM, Frame Relay, ATM) and speeds (64 kbit/s to 155 Mbit/s) for network facilities. The communication speed for final consumers may be up to 8Mbit/s, in certain cases even up to 155 Mbit/s.

EEBone itself (network, Internet communication, and administration) is financed on a central basis – the final consumer does not have to pay for using the network. The connection to the EEBone and communication maintenance parameters must be determined and paid for by the participating institution.

Source: ASO

2.1.3.2. County Level Communication Network Program "Village Road"

County level communication network program "Village Road" ("KülaTee") is an information technology co-operation program of county governments, Department of State Information Systems and Estonian Informatics Centre and is one of the priorities of the Government in 2000 and 2001.

The purpose of the Village Road is to develop data communication facilities in rural areas. Within the framework of the program special attention is paid to local authorities.

Working groups set up within the framework of the "Village Road" will develop an organisational scheme aimed at solving data communication problems – co-operation of different interested parties will be enhanced, the opportunities and means will be utilised more efficiently. Establishment of communication infrastructures will be organised via specially ordered services, while the final consumer is expected to pay for the service.

2.2 Types of operators using the alternative networks

There are currently no telecommunication operators who would use alternative communication networks to a considerable extent. Even when telecommunication services are provided through alternative communication networks, separate telecommunication operators have not been created or involved for that purpose and the companies that own alternative networks operate their own network. Consequently there are no separate operators, these are sub-units of the same organisation.

In the future, involvement of telecommunication companies can be expected, as several companies surveyed stressed their willingness to involve telecommunication companies.

2.3 Services provided by the operators of alternative communication networks

In the Estonian telecommunication market data communication services by cable distribution operators can only be mentioned. Although several companies that provide public services have their internal corporate networks that could be used, in principle, for the provision of telecommunication services, the services provided by them are small in scale.

Most cable-TV operators in Estonia are providing the service that contains up to 20 TV programmes. The cable TV operators in Tallinn and a few small towns that use higher frequencies (up to 860 MHz) provide the service that contains up to 50 TV channels and up to 20 FM radio programmes. A more important telecommunication service is the Internet connection provided through cable distribution. Such services are provided both by TELE2 and STV in Tallinn. Starman Kaabeltelevisiooni AS also plans to start the provision of data communication services in the near future.

After the expiry of the rights stipulated in the Concession Agreement the fast extension of the range of services is expected, incl. to the provision of telephone services.