Esis Extension / Lithuania / Alternative Networks / Master Report

According this Law, alternative networks in Lithuania until 31^st December 2002 can provide only public services based on radio or satellite technologies. However, the Law permits the development of cable infrastructure for other telecommunication operators. In the event of a telecommunication operator can not lay new additional lines or it costs disproportional high, the Regulatory Agency may request near any other operator to allow a jointly use on a non-discriminatory basis the existing conduits, cable ducts, collectors, towers and other facilities.

Four companies - Omnitel (http://www.omnitel.lt), Comliet (http://www.comliet.lt), Bite GSM (http://www.bite.lt) and Levi&Kuto with Tele-2 Network operate in the Lithuania mobile communications sector which leader is the Omnitel Company that belongs to the Consortium Amber Teleholding (Sweden and Finland), Motorola and others from USA.

Omnitel started business as alternative network provider at a time when Lithuania and other Baltic States had no independent communications, all telecommunications went through Moscow. In 1992 Omnitel installed a satellite earth station that released Lithuania from dependency of the Russian telecommunication networks.

Omnitel covers more than 90% of Lithuania territory. At the end of 1998 Omnitel had over 180000 GSM, 12000 Internet and 3500 Paging subscribers. Omnitel is providing Internet connectivity based on the AT&T Wave LAN equipment, leased lines, dial-up lines and satellite direct PC too.

At the end of 1999 Omnitel had over 214000 users (GSM, Internet and paging). Omnitel, which detains 64% of the Lithuania mobile GSM market, has begun offering Internet services via mobile telephones. Omnitel foresees to attract more than 2000 users to this new service.

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 has established banking operations services via GSM. Omnitel started in December 1999 e-commerce and has plans to develop mobile Internet and mobile commerce in 2000.

Omnitel competitor, Bite GSM, (which owner is Teledenmark) has around 120000 users. Bite GSM plans to launch Internet services in April 2000 and to introduce WAP (Wireless Application Protocol).

During last four years Bite GSM invested in the development of infrastructures and services around 500 MLt. (50 MEURO). 45 MEURO investments (a loan from the Investment European Bank) for further development of Bite GSM network are planned for next years.

The great competition and struggle for users took place between the two main operators, Omnitel and Bite GSM. Both operators cover all country and are developing new infrastructures and new services. Both operators are using flexible pricing policy. The subscriber fee and prices for calls fall dawn in a half during 1999, in contrast to wire telephony provided by monopolist Lithuania Telekomas, where prices for services arose about 16% in 1999.

Bite GSM offered two new services named Namu zona (Home area) and GSM-Pro. Namu zona service allows cheapest calls for users in registered small area (home) and few square km areas. GSM-Pro is a new service realised in few countries only (e.g. Westel Hungary and South Africa Republic) that opens the possibility to create private mobile networks. During November and December 1999, Bite GSM established 8 basic stations in all country to improve the related connectivity.

The third operator is Comliet Company (NMT 900) which owner is Lithuania Telekomas. This operator is currently oriented for providing phone services in country regions. The prices for services are similar to fixed lines prices. Lithuania Telekomas plans to have about 20000 wireless users at the end of 2000.

A new fourth mobile communications operator, Levi & Kuto Company with Tele 2 network started on the 14 December 1999 in Vilnius. Currently Tele 2 covers central part of Vilnius only. Tele 2 will cover all Vilnius and will operate in other main cities in 2000. About 200 MLt (50 MEURO) investment for network development is planed for next year. Levi & Kuto have license for DSC 1800 MHz communications and have plans to win competition for GSM 900 next year. Mr. Arunas VAGLYS, director of Levi & Kuto, announced that Tele 2 users would not pay subscriber fee. The prices for calls are similar to prices of other operators.

The Taide company (http://www.taide.net) which Lithuanian part of Taide Network (the new owner is Microlink from Estonia) is one of the pioneers of Internet in Lithuania. Microlink plans to become one of largest Internet providers in Lithuania. Taide Network Installation and Design businesses were sold to Cygate (Sweden), the Cable TV Company and to a supplier of network equipment.

The main activity of Taide is to provide Internet services in Lithuania, building a strong and reliable infrastructure of data communications through wireless radio and whirling technologies.

Taide Network uses optical fibre and VSAT technology (from Telecom Satellite Services, Norway) for connection to Internet. Taide is licensed to install and maintain satellite earth stations and satellite data communication systems in Lithuania. Taide connects 6 Internet providers in Lithuania.

Lema is a Lithuanian private company (http://www.lema.lt) that during 1996-1998 installed more than 100 wireless connections, based on AT&T Wave LAN equipment in all Lithuania regions. Lema realised the following wireless connections: Vilnius-Kaunas-Alytus, more than 140 km and Vilnius-Moletai with more than 80-km installation.

The new project Baltnet (under support of Nordic countries) to connect wireless more than 20 schools to Lithuanian Academic and Research Computer Network LITNET, is under realisation by Lema.

Baltneta (http://www.balt.net), a private Lithuania Company, provides wireless connections to Internet. Main connections are made in the largest Lithuania cities, Vilnius and Kaunas. Baltneta installed a 100 km connection between Vilnius and Kaunas.

51 Cable TV companies (http://www.radio.lt/ctv.htm) operate in all cities of Lithuania. In largest Lithuania cities, the MDM radio technologies and fibre optics for cable TV networks infrastructures are used. Lithuania legal framework permits to the Cable TV companies to produce their own programs and to provide other related services.

The number of users is 270000. The average installation fee is 160 Lt (40 EURO) and the monthly fee is 20 Lt (5 EURO). Few Cable TV operators are providing or planning access to Internet in the near future. No licenses are required to provide Internet services. At least two operators (one in Vilnius and the second in a regional city) announced about Internet service possibility. There is no information about the number of Internet users via cable TV. The price for Internet service is about 130 Lt/month (32 EURO/month).

The Cable TV Association reported on the great number (20%) of illegal users. Lithuanian Cable TV operators did not use coding-decoding systems.

Internet and data communications market is fully liberalised, no licences are required for providing this kind of services as well as for the establishment of international Internet gateway. More than 50 Internet services providers (only 5 are primary providers) and more than 10 data communications operators are operating in Lithuania. Lithuania Telekomas is the main primary Internet connectivity and service provider and seller of Internet connectivity for other sub-providers (see http://www.telecom.lt and http://www.takas.lt).

Other mobile communications operators, Bite GSM and Tele-2 have plans to start providing Internet in near future. The main Internet providers are capable to provide IP-telephony service, but the Law on Telecommunications does not allow this kind of service provision until 1 January 2003.

For the user loop, most of providers use Lithuania Telekomas infrastructure. Other alternatives are Internet via GSM, wireless connection, and cable TV infrastructure.

In early 2000, Microlink, an Estonian company, (http://www.microlink.ee), bought two local Internet providers companies, Taide and Skaitmenines Komunikacijos. Microlink has ambitious plans to invest some million Lt. for a powerful Internet gateway establishment, the Lithuanian version of Estonian Delfi (http://www.delfi.lt). This will enhance the competition among the existing Internet service providers in Lithuania.

The state enterprise Lietuvos Gelezinkelis (Lithuania Railways - http://www.transp.lt), which handles traffic control and management, uses their own communication network. Main communication infrastructure is old and is based on cooper wire. The communications lines modernisation has already took place. 129 km of optical fibre line were installed between two cross points, Kaisiadorys-Radviliskis lay out, with international support. In other regions, the railways communications lines are not in conditions to support IT applications.

Lietuvos Energija (Lithuanian Power – http://www.lpc.lt), is the state owner largest enterprise of electric power and heating supplier in Lithuania. The company has own well-developed (partially on optical fibre connections) communications networks for voice, data, remote control and remote-measurement. This enterprise has a good capability to compete in a near future with existing suppliers of basic telecommunication services.

In November 1999, The Lithuania Government announced the Program for 1999-2000. Restructuring and partial privatisation of State Railway system, Lietuvos Energija (Lithuania Power) and the Lietuvos Dujos (Lithuania gas) are planed for 2000. The Lithuania Government created the Privatisation Commissions for every sector. The main tasks of these commissions are to prepare the documents and plans for restructuring and the selection of main consultants. Newspapers noticed on the great interests of foreign companies on Lietuvos Energija. The Sweden company Vattenfall AB detains 10% of Lietuvos Energija’s shares and has planned to participate in the tender for power transmission network. The Vattenfall AB company informed on the possible 1,1 BLt (227 MEURO) investment in this sector.

Lithuania and Poland Governments agreed to develop the Power Bridge Project, in order to establish a power supply line to West.

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.