January 2000

Slovenia Update Memo

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

During the last three months, there have not been many changes on the Slovene alternative networks scene. Neither the legislation nor the regulations have been changed. This means that the alternative infrastructure continues to be only partially liberalised.

As exclusive rights for the construction and management of the public telecommunications network intended for the provision of public telecommunications services (voice telephony and telex), data and global wideband and multimedia telecommunications (including Internet) has been granted to Telekom Slovenije until 31 December 2000, the alternative infrastructure may only be used for a limited set of commercial services (a licence is also required). Owing to the fact that the restrictions were imposed by legislation, the present situation is rather absurd. For example, although alternative networks are liberalised for the provision of leased lines, their provision is prohibited if intended for Internet access or services and data communication services. In fact, alternative networks are liberalised for the provision of leased lines if they are intended e.g. for private networks, transmission of alarm signals or cable TV.

By 31 December 1999, 53 licences had been issued by the Telecommunications Administration of the Republic of Slovenia for the provision of commercial telecommunications services. Apart from the incumbent operator Telekom Slovenije, other licence holders include: internet service providers, operators of cable communication and/or cable distribution systems, a public utility for the transmission of electric power (ELES), Slovene Railways and RTV Slovenija (Transmitter and Communications Department). Another potential alternative network provider, the Motorway Company of the Republic of Slovenia, has not yet applied for a licence. According to reliable sources, Telekom Slovenije appealed to the Ministry of Transport and Communications against the decisions of the Telecommunications Administration concerning licences issued for the provision of leased lines and data communications services.

At the end of August, rumours emerged in political and business lobbies that a consortium would be established for providing telecommunications services after the market was fully opened. During the last three months, the situation has been clarified. There are now two consortia with ambitions to become telecommunications operators after 31 December 2000, when the market is to be fully opened:

• The first consortium consists of BTC d.d., Slovene Railways, Masterline d.o.o. and the Municipality of Ljubljana. It acquired a majority share of Meglic Telecom d.o.o., one of the largest Slovene cable TV operators. The Municipality of Ljubljana acquired 1% while three other partners acquired almost 20% each. Following the acquisition, Meglic Telekom d.o.o. was transformed into a joint-stock company and its name was changed to Telemach d.d. The President of the Board is Mr. Marjan Meglic, founder of Meglic Telecom.
  
• The second consortium is formed by Simnet d.o.o., Autocommerce d.d. (which recently acquired the internet service provider Perftech d.o.o.), University of Maribor, Slovene Railways and Lucent Technologies, while AT&T is indirectly involved.