February 2001

Lithuania Master Report

1.1 Regulation of telecommunications and alternative networks

1.1.1 The regulatory background

The Law on Telecommunications (entered in force on the 1^st August 1998) regulates telecommunications and activities of the alternative networks. The Law is harmonised with EU requirements.

The Law on Telecommunications regulates relations between the telecommunications operators and the users of their services, the management, use and control of radio communication. The Law regulates import, manufacturing, use and maintenance of equipment radiating electromagnetic waves, ensures an effective use of radio frequencies, and sets forth conditions for promoting competition in the telecommunications sector.

According with the statements of the Law, the telecommunications should be regulated, on behalf of the State and in manner prescribed by this Law, by:

• the Government or authority assigned by it;
• the Communications Regulatory Authority.

The Department of Communications under the Ministry of Transport (http://www.transp.lt) was temporarily authorised by Government Decree to provide NRA functions prescribed in the Law until the NRA will be established. Now the National Regulatory Agency (NRA), on the base of State Radio Frequency service (SRFS), is under establishment (Government Decree in May 2000). The Article 1 declared:

The Communications Regulatory Authority shall be an independent institution of the Government regulating communications activities and implementing provisions of this Law, acting in accordance with this Law, and other laws of the Republic of Lithuania, and its own regulations. The Agency shall be financed from the State budget.

The Government shall approve regulations of the Communications Regulatory Authority.

Presently, the Lithuanian Communication Regulatory Authority (CRA) is established but really is not operating in manner prescribed by the Law on Telecommunications. The Lithuanian President hasn’t appointed the Head of CRA and Members of the Board yet and there aren’t any regulations approved by the Government. The CRA does not perform the functions prescribed in Article 6.1 as follows:

• to ensure that there is no discrimination against telecommunications operators and that they enjoy equal opportunities to enter into agreements on the interconnection of telecommunications networks;
• to ensure that equipment and devices used in the Republic of Lithuania are in conformity with the technical standards valid in the Republic of Lithuania;
• to ensure that there is no discrimination against the consumers, that they enjoy of equal opportunities in the access to public telecommunications networks and telecommunications services;

The status of competition and regulations in telecommunications, according to Article 8, is that:

• The Lithuanian market of operation of public telephone networks and provision of telecommunications services via fixed public telephone networks must be free as of December 31, 2002. Until this date, the main fixed public telephone operator has the right to remain the sole operator of fixed public telephone and sole provider of fixed public telephone services;
• Until the date specified in paragraph 1 of this Article, no addition licenses or authorisations may be granted that might alter the conditions for the activities of the main operator of fixed public telephone operator.

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

1.1.2 Mobile communications operators

Four companies - Omnitel (http://www.omnitel.lt), Comliet (http://www.comliet.lt), Bite GSM (http://www.bite.lt) and Tele-2 (http://www.tele2.lt) operate in the Lithuania’s mobile communications sector. Experts are estimating that the number of mobile communications users will represent about 13% of the Lithuanian citizens or about 450 000 at the end of 2000. At the end of 2001, experts foresee 700 000 mobile communications users or about 20% of citizens, and the prices will be similar to the Lithuanian Telekomas tariffs.

Omnitel

The Lithuanian leader in mobile communications is the Omnitel Company whose owners are the Consortium Amber Teleholding (Sweden and Finland) - 55% shares, Motorola - 35% and private persons - 10%.

Omnitel started business as an 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 the dependency of the Russian telecommunication networks.

Omnitel covers all of Lithuania territory. At the end of 1998 Omnitel had over 180000 GSM, 12000 Internet and 3500 Paging subscribers. At the end of 1999 Omnitel had over 214000 users (GSM, Internet and paging). In 2000, Omnitel, which has 60% of the Lithuania mobile GSM market or about 300 000 users, has begun offering Internet services via mobile telephones. Omnitel foresees to attract more 2000 users to this new service in 2000. Omnitel is providing Internet connectivity based on radio equipment, leased lines, and dial-up lines too. The company has 165 Internet connection nodes in 49 Lithuania cities and occupies about 50% commercial Internet market. About 500 000 users per month access Omnitel Internet gateway www.omnitel.net. New product is WAP gateway mmm.wap.lt, for GSM Internet with WAP.

Omnitel 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 in the e-commerce area and continued the development of mobile Internet and mobile commerce in 2000. In October 2000, Omnitel announced a joint product GSM based modem-counter together with water and heating supply companies, which allows to collect wireless or via Internet data to a work station. The cost of such equipment could be about 500 EUR and the cost of the monthly service is about 15-40 EUR (depending on the type of service). Other possible Omnitel service for the next year could be the determination of the location of Omnitel users. In 2000, Omnitel signed an Agreement with Motorola for installation of GPRS (General Packet Radio Service) technology. The GPRS system was developed by Motorola and CISCO Systems Inc. The GPRS system with 115 Kbps data communication possibilities is available for future mobile Internet services including e-commerce and e-business. The new service will be available for Motorola Timeporto 260 phone users.

Bite GSM

The Omnitel competitor, Bite GSM, (TeleDenmark – 100% shares) has around 150000 users. Bite GSM started Internet services and WAP (Wireless Application Protocol) applications in April 2000.

During the last four years, Bite GSM invested in the development of infrastructures and services around 200 M. Lt. (50 M EURO). A 45 M.EURO investment (a loan from the Investment European Bank) for further development of the Bite GSM network are planned for the next years. In 2000, Bite GSM started mobile Internet service too. Bite GSM invested more 0,6 MEUR (2 MLt) in the development of the Internet business. The Managing Director Mr Alex Wurz informed about the implementation of 28,8 Kbps data communication, based on HSCSD (High Speed Circuit Switched Data) technology. In the near future, with new software, the data capacity can be increased up to 43,2 Kbps. Bite GSM is establishing a new portal www.banga.lt with WAP possibility oriented for mobile Internet.

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 the infrastructure and new services. Both operators are using a flexible pricing policy and reducing prices every year. The subscribers fee and prices for calls fell down by half during 1999, in contrast to wire telephony provided by the monopolist Lithuania Telekomas, where prices for services rose 16% in 1999. In December 2000 Lithuania Telekomas announced 30% higher prices for local calls in 2001.

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

For offices Bite offers stationary GSM connection ("Bite O service"). The price of calls made from offices to all networks within Lithuania will be the same. The price is similar to Lietuvos Telekomas tariffs. If the user has a fixed GSM phone, he can connect it to PABX (Local exchange) and save money for calls made from any of the phones in connected office. The price of "Namu zona" (Home area) is included in "Bite O service".

Comliet

The third operator is Comliet Company (NMT 900) whose owner is Lithuania Telekomas. This operator is currently oriented for providing phone services in country regions. The prices for services are similar to the fixed lines Lithuania Telekomas prices. Lithuania Telekomas signed a 7,5 MEURO agreement with Nokia (Finland) for equipment needed to develop wireless infrastructure in rural areas. Comliet has now 9000 users and expects to increase the number of users up to 45000. Lithuania Telekomas expects to minimise waiting queues in areas where there is no fixed lines infrastructure.

Tele2

A new fourth mobile communications operator, Levi & Kuto Company (in 2000 renamed as Tele2), owner of NetCom Sweden with the Tele 2 network started on the 14^th December 1999 in Vilnius. An investment of about 200 MLt (50 MEURO) for network development was planned in 2000.Tele 2, during the first half of 2000, developed their network twice more than it was foreseen in licences for this period. NowTele-2 is accessible in the largest Lithuanian cities – Vilnius, Kaunas and Klaipeda. At the end of 2000, Tele-2 is accessible to 40% of the Lithuanian citizens. Tele-2 announced about the plan to establish a Lithuanian version of the powerful Internet gateway "Everyday.com". Tele2 has a license for DSC 1800 MHz communications and has plans to win competition for the GSM 900 license. The Commission for the open tendering for the third GSM license in November selected Tele2 as the winner of the third GSM 900 licence. The Government should confirm the winner on the 20^th December. At the end of 2000, Tele2 had about 10 000 users. The prices for calls are similar to prices of other operators.

1.2 Regulations and status of public utilities and public organisations regarding a potential entry in the alternative networks industry

1.2.1 Regulatory basis

The Data communications service and Internet market are fully liberalised, there are no licences required for providing this kind of services as well as for establishing an international Internet gateway. The Law on Telecommunications allows the development of alternative communications infrastructures in transport, energy and oil supply sectors and other areas. The Article 3.1 of the Law on telecommunications declares that:

Telecommunications for ensuring national defence, security, protection of state borders, civil aviation, safety of railway traffic and the uninterrupted and sound functioning of the energy sector shall be regulated by the relevant public authorities within the limits of their competence.
The Law on Telecommunications allows licensed development of radio communications. The Article 9 declares the general principles of licensing. The main principles are:

• Only such telecommunications activities for which limited resources - radio frequencies and telephone numbers -are available shall be licensable.
• The list of telecommunications activities subject to licensing and the conditions attached to licensing shall be approved by the Government.
• A licence to engage into the telecommunications activity shall be awarded by tender in a manner prescribed by the Government. In certain cases, the terms of the tender may stipulate that licences may contain a requirement providing that under certain conditions, any other telecommunications operator is allowed to jointly use conduits, cable ducts, collectors, towers, poles and other facilities.
• A licence shall be a public document.
• A licence may be suspended or revoked in the cases stipulated by the licensing regulations of telecommunications activities approved by the Government.

1.2.2 Cable communications

Lietuvos Energija 

Two large public service providers, Lietuvos Energija (Lithuania Power) and Lietuvos Gelezinkeliai (Lithuanian railroads) own and are developing communications infrastructure that can be used for telecommunications service. Until 2000 the companies hadn’t considerable applications and services for other networks operators.

Lietuvos Energija (Lithuanian Power – http://www.lpc.lt) is the state owned largest enterprise of electrical power and heating supplier in Lithuania. The company has own well-developed based on optical fibre connections communications networks for voice data, telecontrol and telemeasure. In the years 1999-2000, the company built fibre optical lines between the main cities, power plants and power distribution facilities. Lietuvos Energija has plans to create a telecommunication network based on power lines covering all Lithuanian territory. This enterprise has good capability to compete in a near future with the existing suppliers of basic telecommunications services. There is information that a few Internet providers are discussing the possibility to use their infrastructure for data communications in the year 2001.

Lietuvos Gelezinkeliai

The state enterprise Lietuvos Gelezinkelis (Lithuanian Railways - http://www.transp.lt), for traffic control and management, uses their own communications network too. In 1999-2000 the modernisation of the communication lines had already taken place, but the main communication infrastructure is still old and is based on cooper wire. More 150 km. of optical fibre line were installed between two cross points Kaisiadorys - Radviliskis lay out with international support and in the Vilnius region. In other regions, the railways communications’ lines are not available for IT applications.

Cable TV

Fifty-one cable TV companies (http://www.radio.lt/ctv.htm) operate in all cities of Lithuania. The Cable TV Association reported on the great number (20%) of illegal users. The Lithuanian Cable TV operators did not use coding-decoding systems. In the largest Lithuania cities, the MDM radio technologies and fibre optics for cable TV networks infrastructures are used. The Lithuanian legal framework allows the Cable TV companies to produce their own programs and to provide other related services.

Presently, the Cable TV companies have about 300.000 users, but they are accessible to more 700.000 users. Most of the Cable TV companies are ready to provide Internet and voice telephony services. The average installation fee is 160 Lt (40 EURO) and the monthly fee 20 Lt (5 EURO). The Lithuanian territories, where private Cable TV companies can provide their services, are already divided. In the Vilnius area, Cable TV is accessible to more than 78% of the citizens, but only 44% are users. At least two operators (one in Vilnius and the second in a regional city) announced about Internet service. No licenses are required to provide Internet services. 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).

Others

The Ministry of Internal Affairs (Police Department and State Border Protection, other structures) and State Security Department owned more close communications infrastructure for internal use, connection of their departments and units. The State Department of Security in Vilnius and some other regions owned good quality (inherited from KGB) cable infrastructure, sometimes not used. Both organisations are developing more advanced infrastructures based on fibre optic, radio links and leased lines. Currently there exists the possibility to use their free capacities for the state supported Lithuanian Academic and Research Computer Network LITNET or the Governmental Institutions Network VIKT.

1.2.3 Wireless communications

Lithuanian Radio and TV Centre

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 that is 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. The LRTC receive 5 proposals, but during one year period twice the Norway Company "Nera AS", winner of third place, protested the competition process. The final decision for this tender is expected in December 2000.

Lema

Lema is a Lithuanian private company (http://www.lema.lt) that during the years 1996 - 2000 installed more than 300 wireless connections, based on AT&T Wave LAN equipment in all Lithuania regions. Lema established the wireless connections: Vilnius - Kaunas – Alytus, more than 140 km and Vilnius - Moletai with more than 80-km installation. The company is providing radio connectivity and maintenance for the Lithuanian Academic and Research Computer Network LITNET and participates in other Lithuanian projects.

In the years 1999-2000 Lema was the main contractor for the project Baltnet (under the support of Nordic countries) to connect wireless schools to the Lithuanian Academic and Research Computer Network LITNET. Currently more 50 Lithuanian schools are connected to LITNET through Lema equipment.

Delfi

The Delfi company (the owner is Microlink, Estonia, http://www.delfi.lt) started in Lithuania in 1999 as part of Taide Network. The main activity of Taide was to provide Internet services in Lithuania through wireless radio and whirling technologies. Delfi continued Taide networking activities and plans to become one of largest Internet providers in Lithuania. The company uses optical fibre and VSAT technology for connection to Internet and connects 6 Internet providers in Lithuania.

Baltneta

Baltneta (http://www.balt.net), a private Lithuanian Company, provides wireless connections to Internet. The main connections are made in the largest Lithuania cities, Vilnius and Kaunas. Baltneta installed a 100-km connection between Vilnius and Kaunas. The company offers Europe on-line DVB Internet installation services and maintenance.

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

2.1. Lietuvos Energija (Lithuania Power)

Lietuvos Energija (Lithuanian Power co.) is the state enterprise owning the largest power plants, power distribution and switching systems. The total installed power is 6127,3 MW. Ignalina Nuclear Plant is the largest power plant in the Baltic region and other 3 largest power plants are connected to one 330 kV distribution system. The total length of 330 kV lines is 1656 km. Seven regional distribution centres are connected through 110 kV lines with a total length of 5013 km. All these lines are available to install fibbers. 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. The company owned more 200 330-110 kV switching and transforming units. In 1998 the company started the renovation of distribution and switching system, modernisation of control, telemeasure and information systems. At the end of 2000, Lietuvos Energija has fibber optic lines between the main cities Vilnius and Kaunas, line Kaunas – Klaipeda. LITNET and a few Internet providers are discussing with Lietuvos Energija agreements for collaborations and use of fibber optic infrastructure for data communications in 2001. Lietuvos Energija has high voltage lines to Latvia and Byelorussia, but had no lines to West.

In 1999 the Lithuanian "Seimas" adopted the National Energetic Strategy with the following goals:

• reliable and secure power supply;
• increase effectiveness of power use;
• Implementation of market economy principles and improvement of management;
• increase nuclear safety and reduce negative influence to nature;
• integration of Lithuanian power system to Europe Unit;
• regional co-operation and collaboration.

In September the Lithuanian Prime Minister Mr A.Kubilius and Prime Minister of Poland Mr J.Buzek signed the Agreement for implementation of the Power Bridge to West. The Prime Ministers signed jointly latter to the European Commission for financial support to implement this Project. The new Lithuanian Prime Minister, during the first meeting with Poland Prime Minister, agreed to establish joint working groups and start the implementation of this project.

The Lithuanian Government announced plans for the restructuring and privatisation of Lietuvos Energija (Lithuania Power) in 2001.

2.2. Lithuania Railways

The Lithuanian railroads system is non-European standard. Only short European standard distance to Poland’s border was built after 1991. The state enterprise Lietuvos Gelezinkeliai (Lithuania Railways) has plans to develop a fibber optics communication infrastructure for traffic control and management along the main railways transport corridors. One is from the seaport Klaipeda to Byelorussia’s border and the second – from Poland’s border to Latvia’s border. In 1999-2000 the modernisation of the communications lines has already taken place, but the main communication infrastructure is still old and is based on cooper wire. More 150 km. of optical fibre line were installed between two cross points Kaisiadorys - Radviliskis lay out with international support and in the Vilnius region. In December 2000 Lietuvos Gelezinkelis and ADtranz (Sweden) signed a 50 MLt (14 MEUR) Agreement for the modernisation of this distance. About 5 MLt (1,4 MEUR) are planned for the modernisation of traffic control infrastructure.

The Lithuanian Government Program for the years 2000-2004 announced the restructuring and partial privatisation of the State Railway system in 2001.

2.3. Lietuvos Dujos

The state enterprise Lietuvos Dujos (Lithuanian Gas) has well developed infrastructures in all cities, main lines between cities and to Russia. According with the Law on Telecommunications, the company has the right to develop their own communications infrastructure, but presently there are no considerable developments and no available information about future plans. The Lithuanian Government plans to prepare the necessary laws and regulations for the restructuring of Lietuvos Dujos (Lithuanian gas co.) in 2001.

2.4. Lithuanian Water and Heating Supply System

The owners of water and heating supply systems in Lithuania are municipalities and local authorities. The process of modernisation and privatisation is going on already and depends on the activities and possibilities of local authorities. The heating supply system in cities usually has underground facilities, available and widely used for installation of fibber cables by Cable TV companies. Currently there is no information about their plans to built communication infrastructure and future participation in the telecommunication business.

2.5. Types of operators using the networks

There are no telecommunications operators using alternative communications networks based on the infrastructure of public services providers. The companies' owners of alternative networks as Lietuvos Energija or the Ministry of Internal Affairs operate their own network. There no separate operators, but sub-units of the same organisations.

2.6. Types of services offered by the operators on the networks.

Currently the alternative networks are providing telecommunication services for internal corporate use.

More 51 cable-TV operators operate in Lithuania. In the largest cities the cable-TV service contains up to 70 TV channels. A few cable-TV companies in the largest cities are providing Internet service, but the number of users is a few hundred only. The largest companies are planning to provide voice telephony services after the end of the Lithuania Telekomas monopoly.

The Lithuanian Academic and Research Computer Network LITNET, participant in the European Networks Infrastructure GEANT project, has a plan to use Lietuvos Energija or Lietuvos Gelezinkelis infrastructure for broadband communications as an alternative to Lithuania Telekomas services in 2001. Currently, alternative networks’ companies haven’t announced their prices, quality and types of services. However, other Internet providers, including the Governmental Institutions Network VIKT, has a plan for collaboration with alternative providers too.

• Lithuanian Prime Minister office, http://www.lrvk.lt;
• Lithuanian "Seimas" (Parliament), http://www.lrs.lt;
• European Committee under the Government, http://www.euro.lt;
• Lietuvos Energija (Lithuania Power), http://www.lpc.lt;
• Ministry of Economy, http://www.ekm.lt;
• Department of Information and Informatics, http://www.iid.lt;
• Delfi, http://www.delfi.lt;
• Tele2, http://www.tele2.lt;
• Omnitel, http://www.omnitel.lt;
• Bite GSM, http://www.bite.lt;
• Newspaper Verslo zinios (Business news), http://www.vz.lt.