November 2000

FYR of Macedonia Update Memo

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

The Electric Power Company project aimed to improve its telecommunications and supported by World Bank is well underway. Macedonian Railway project to improve its information and telecommunications infrastructure is being supported by US Trade and Development Agency (TDA) grant and the World Bank.

1. The interaction between business and regulatory constraints

1.1 The regulatory background

There are no changes in the Macedonian Telecommunications Act according to which:

• The Macedonian Telecommunications (http://www.mt.com.mk/index.html) shall have the exclusive right, until 31^st December 2005, to provide fixed voice telephony services, telegraphy services, telex services, public pay phone services, and leased line services, and to construct own and operate fixed public telecommunication networks;
• The Minister of Transport and Communications shall issue concessions for different types of telecommunications activities.

The faster liberalisation in telecommunications is a key subject in the negotiations with European Union.

1.2 On-going regulatory developments concerning alternative networks

Intention has been announced for partial privatisation of the Electric Power Company in near future.

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

So far, own telecommunication networks have been established by Macedonian Railway, Electric Power Company of Macedonia and Makpetrol - TEAS (established by the Macedonian leading Oil company).

Macedonian Railway has built its own telecommunication infrastructure along the railroads. It is based on wire technology but there is an orientation towards upgrade to optical technology. The investments in the modernisation of the public enterprise "Macedonian Railways" ("Makedonski Zeleznici", MZ), is critically important for the Macedonian part of the Corridor - 8 (East-West Balkan Corridor).

Within the initiative, US Trade and Development Agency (TDA) granted irreversible assistance at amount of $2,187 Millions to the public enterprise Macedonian Railway. The grant is aimed for purchasing a fibre-optic cable to improve the present wire communications.

The World Bank credit of total 9.7 million EURO is directed for the modernisation of the Railway Information and Telecommunication system. So far, a Feasibility Study has been accepted and the tendering documentation is being prepared. The realisation of the credit should happen in 2001.

The Electric Power Company of Macedonia (http://www.esmak.com.mk/) has built its own telecommunication facilities. They are based in VF Power Lines, wire HDSL, Radio Microwave and Optical Fibre Cable. This infrastructure is used for providing fixed voice, mobile and data services for their own needs. On some links they share facilities with Macedonian Telecommunications. Their strategy is to upgrade and extend their network and possibly the services provision.

A World Bank credit has been allocated to the Electric Power Company for procurement of optical grounded wire (OPGW) cable. The company will carry out the installation of the cable itself in the next 6 months. The next phase for purchasing the SDH equipment is planned for the end of 2000. The whole project should be carried out in a two-year period.

Makpetrol (http://www.makpetrol.com.mk/) is the Macedonian leading oil company that detains 51% of the shares of Makpetrol – Teas, their telecommunications company. Its communications facilities are based on radio communications. The company is providing telephony services and data communications on a commercial basis and customer targets are large companies and institutions, small offices, taxi transports, rural communities, Macedonian Telecommunications and others.