ESIS extension / Lithuania / Alternative Networks / Update Memo 6

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

The new mobile communications GSM 900 operator is arriving to the country. Lietuvos Telekomas (Lithuania Telecom) announced about the setting of passive filters on analogous (copper) lines. In September, the Lithuanian Government announced about Lietuvos Energija (Lithuania’s Energy company) reorganisation plans. On-going developments in utilities with potential for use in IS applications.

The Communication Department under the Ministry of Transport and Communication announced in September about the third GSM 900 operator coming soon. The tender for the third licence started in Q1 2000. The Ministry of Transport and Communications did not allow Omnitel and Bite GSM (already having licences) to participate in this competition. The companies protested against the tender. Therefore investigations and discussions continued for more 8 months. Currently five proposals, received during first quarter, are valid and the winner of GSM 900 licence can be announced in the ending 2000. The candidates are:

All mobile communication companies, currently serving more than 350 000 users, are developing new services and are widely penetrating Internet market, including mobile Internet.

The largest mobile communications company Omnitel (Lietuvos Telekomas – 60% of shares, Motorola – 35%, private – 5%) signed an Agreement with Motorola for the installation of GPRS (General Packet Radio Service) technology. Motorola and CISCO Systems Inc developed the GPRS system. The GPRS system with 115 Kbps data communication possibilities is available for mobile Internet services including e-commerce and e-business. The new service will be available for Motorola Timeporto 260 phone users.

The second company, Bite GSM (TeleDenmark – 100% shares) started mobile Internet service too. Bite GSM invested more than 0,6 MEUR (2 MLt) in the development of Internet business. The Managing Director Mr Alex Wurz informed about the implementation of 28,8 Kbps of data communication, based on HSCSD (High-Speed Circuit Switched Data) technology. In the near future, with the new software, the data capacity can be increased up to 43,2 Kbps. Bite GSM is developing a new portal Banga with WAP possibility, oriented for mobile Internet.

The third mobile communications operator, Tele-2 (owner NetCom, from Sweden, started in December 1999) with DCS 1800, developed their network two times more than was foreseen in licences during the first half of the year. Tele-2 is accessible in the largest Lithuanian cities – Vilnius, Kaunas and Klaipeda. At the end of 2000, Tele-2 will be accessible for 40% of the Lithuanian citizens. Tele-2 announced about the plan to establish a Lithuanian version of the powerful Internet gateway "Everyday.com".

Lietuvos Telekomas (Lithuanian Telecom), monopolist for fixed line communications until the end of 2002, announced in the middle of 2000 about the setting up of passive filters for copper lines. Firstly, the filters will be used for the new installations. A great part of Internet providers are leasing from Telekomas copper wires to connect the users to their Internet backbones. DSL or ADSL technologies allow up to 2 Mbps connections and only 32 Kbps (or less capacity) is possible on lines with filters. This action is limiting business opportunities for small Internet providers. This way, Lithuania Telekomas is forcing the use of data communications, which are only a bit more expensive than Telekomas digital lines.

In September 2000, Lithuania Telekomas presented the Government a project for an Agreement to establish a telecommunications network for governmental institutions, including Seimas, the President Office, and all Ministries and state organisations. Other market actors and IT experts considered this proposal as an attempt to monopolise communications for state and local administrations, prolonging monopoly in this sector for a long time. The Lithuanian Government is considering this proposal.

Lithuania Government announced plans for restructuring and privatisation of Lietuvos Energija (Lithuania’s Energy company) in November 2000. Lietuvos Energija has installed fibber optic lines between the main cities Vilnius and Kaunas, the line Kaunas – Klaipeda is being installed. Lietuvos Energija has ambitious plans to create a fibber optic network covering all territory and connecting all major energy facilities – power stations, management and switching centres. Some data publication operators are negotiating with Lietuvos Energija agreements to set up collaborations in order to use fibber optic infrastructure in near future.

In September Lithuania’s Prime Minister Mr A.Kubilius and the Prime Minister of Poland Mr J.Buzek signed an Agreement for the implementation of a Power Bridge to the West. The respective Prime Ministers signed a joint letter to the European Commission asking for financial support to realise this project.

The state enterprise Lietuvos Gelezinkelis (Lithuanian Railways) has plans to develop fibber optics communications infrastructure along the main railways transport corridors. One is from the seaport Klaipeda to Byelorussia border and the second from the Polish border to Latvia’s border. Currently, the company has about 100km optics communications infrastructure and uses for management purpose its own copper lines or leased lines from Telekomas.

The State enterprise Lithuanian Radio and TV Centre - LRTC (www.lrtc.lt) has its own radio relay infrastructure (28 radio relay stations) between the main cities, which are also available for IS applications. In 1999, LRTC announced a tender (4,5 MEUR or 15 MLt) for the implementation of SDH data communication technology. LRTC received 5 proposals; therefore the competition process was protested twice by Norway’s Company "Nera AS" (winner of the third place) during one year. The final decision for this tender is expected for October 2000.

Wireless and Cable TV networks are growing, too. More than 350 radio modems (2,4 GHz) with 2-11 Mbps data communications potential are already installed in Lithuania. The radio communications are widely used as an alternative to Telekomas’ lines.

Most of the Cable TV companies are installing fibber optics connections and have plans to participate in the voice telephony business after the end of Telekomas’ monopoly in the end of 2002.

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.