ESIS extension / Lithuania / Alternative Networks / Update Memo 3

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

New mobile communications operator Levi & Kuto started in December. New services and great competition in mobile communications sector.

The fourth mobile communications operator, Levi & Kuto with Tele 2 network started December 14^th in Vilnius. Currently Tele 2 covers central part of Vilnius only. In 2000, Tele 2 will cover all Vilnius territory and will operate in other main cities. About 200 MLt (50 MEURO) investments for network development are planed for 2000. Levi & Kuto have a license for DSC 1800 MHz communications and had plans to win competition for GSM 900 next year. Mr. Arunas VAGLYS, director of Levi & Kuto, announced that Tele 2 users would not pay subscription fees. The price of calls with Levi & Kuto are similar to the prices of other operators.

The great competition and struggle for users took place between two main operators, Omnitel and Bite GSM. Both operators cover all the country and are developing infrastructure, new services and are using a flexible pricing policy. The subscriber fee and prices for calls were reduced 50% during 1999. In contrast to wired telephony provided by Lithuania Telekomas where prices for services increased about 16% in 1999.

Omnitel company offered integrated mobile, Internet and computer services, named Mozaika. More information can be found at http://www.omnitel.lt . Together with bank Snoras, Omnitel established banking operations service via GSM. Omnitel in last December started e-commerce at site http://www.muge.lt and has plans to develop mobile Internet and mobile commerce in 2000 year.

Bite GSM offered two new services named Namu zona (Home area) and GSM-Pro. The Namu zona service allows cheap calls for users in a registered small area (home) few square kms square area. GSM-Pro is a new service realised in few countries only (e.g. Westel Hungary and South Africa Republic) with possibility to create private companies mobile networks. During last November/December, Bite GSM established 8 basic stations in all country to improve connectivity.

In November Lithuania Government announced a Program for 1999 - 2000. The restructuring and partial privatisation of the State Railway system, Lietuvos Energija (Lithuania Power) and Lietuvos Dujos (Lithuania gas) are planed in 2000 year. Lithuania Government created Privatisation Commissions for every sector. The main tasks of Commissions are to prepare documents and plans for restructuring and select the main consultants. Newspapers are informing about great interests of foreign companies in Lietuvos Energija. The Sweden Company Vattenfall AB owns 10% of the capital of Lietuvos Energija and has plans to win a competition for the power transmission network. The Vattenfall AB company informed about possible 1,1 BLt (227 MEURO) investment in this sector.

The Lithuanian and Polish Governments agreed to develop the Power Bridge project, to establish a power supply line to West.

There are more than 50 cable TV operators in Lithuania. The number of users is 270 000. The average installation fee is 160 Lt (40 EURO) with monthly fees of around 20 Lt (5 EURO). At least two operators (one in Vilnius, second in a regional city) announced the possibility of an Internet service. There is no information about number of Internet users via cable TV. The price for the Internet service is about 130 Lt/month (32 EURO/month).

The Cable TV Association reports a great number (20%) of illegal users. Lithuanian cable TV operators did not use coding-decoding systems.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.