April 2000

Slovenia Master report

I. Interaction Between Business and Regulatory Constraints

1.1 Regulatory Background

Slovenia has been opening its telecommunications market relatively slowly. The Law on Telecommunications (Law on Telecommunications, Official Gazette (OG) of the Republic of Slovenia (RS), No. 35/97) grants exclusive rights (a monopoly) to Telekom Slovenije until 31 December 2000 for the provision of public telecommunications services of voice telephony and telex, and for the construction and management of the public telecommunications network intended for the provision of public telecommunications services, data telecommunications and global broadband and multimedia telecommunications (including Internet).

Conditions for the construction and management of the public telecommunications network are further regulated by the Decree on the Mode of Providing Public Telecommunications Services of Voice Telephony and Telex and on Management of the Public Telecommunications Network (O.G. RS, No. 11/98).

The Law on Telecommunications defines three categories of networks: public networks, closed networks and networks of state bodies. A closed telecommunications network is defined as “ a telecommunications infrastructure which as a closed user system is used for provision of telecommunications required to assure the carrying out of its own activities, as a complement or a substitute to the public telecommunications network” . It should be noted that a “ closed network” defined in the Law stands for a so called “ private network” .

There have been almost no restrictions for building private networks. Only the provisions of the Law on Telecommunications concerning electromagnetic compatibility, protection of telecommunications networks and radiocommunications shall be applied to the construction and management of private networks.

According to Articles 24 and 64 of the Law on Telecommunications, the alternative networks are closed until 31 December 2000 for the provision of public telecommunications services of voice telephony and telex as well as data communications and global broadband and multimedia telecommunications (including Internet). The Law in Article 55 sets the penalty clauses for infringements of regulations on constructing or operating a public telecommunications network. After 1 January 2001, the Government may grant more concessions for the provision of public telecommunications services, in accordance with Article 4 of the Law on Telecommunications and in conformity with the Law on Public Trading Services (O.G. RS, No. 32/93) (alternative network operators may also receive concessions). The procedure, however, is rather complicated, as a public tender is required and the number of concessionaires may be limited.

The current Law on Telecommunications has liberalised alternative networks intended for the provision of non-reserved services including leased lines (a licence is required). Although the Law seems to be clear about the status of alternative networks, there are open issues concerning, for example, the provision of leased lines intended for Internet access and services. In accordance with the present legal framework, alternative infrastructure may be used for leasing lines intended for private networks, transmission of alarms, and cable TV.

The Telecommunications Administration of the Republic of Slovenia issues licences for the provision of commercial services (including leased lines) in accordance with the Regulations on the Issuing of Licenses for the Provision of Commercial Telecommunications Services (O.G. RS, No. 75/98).

1.2 Business Constraints and Entry Barriers

The main entry barrier is imposed by the present Law on Telecommunications that grants exclusive rights (a monopoly) to Telekom Slovenije until 31 December 2000 for the provision of public telecommunications services of voice telephony and telex, and for the construction and management of the public telecommunications network intended for the provision of public telecommunications services, data telecommunications and global broadband and multimedia telecommunications (including Internet).

Current regulatory restrictions prevent the use of alternative infrastructure for the provision of certain liberalised services. Potential service providers must still rely mainly on transmission capacity (leased lines) provided by the incumbent telecommunications operator which is (itself or via its subsidiaries) also a competitor in the area of liberalised services.

In addition to the exclusive rights on the public network (see above), the incumbent operator became (according to the Law on telecommunications and secondary legislation) also an owner of an important part of telecommunications infrastructure: i.e. ducts.

Although the telecommunications market is planned to be opened after 1 January 2000, the situation after this date is still not clear as the new law on telecommunications has not yet been adopted.

Due to restrictions set by the Law, telecommunications networks have been solely constructed by utilities, governmental bodies and cable TV operators.

Some utilities have very good networks, however, they cover connections between major towns only and in some cases, neighbouring countries, while lacking local loop access.

On the other hand, cable TV operators enjoy good local coverage (villages and towns). There have been several attempts to connect major national cable TV operators in order to establish a nation wide network and service. According to representatives of leading cable TV operators, some of them might achieve this goal in the year 2000.

One important business constraint is the lack of private capital and a relatively closed market for foreign investment. As the construction of telecommunications infrastructure requires vast investments, this is one of the biggest barriers to the development of new Information Society services and e-commerce.

1.3 Attitude of the Incumbent Operator towards Alternative Network Providers

There have been several cases reported by alternative infrastructure providers of the incumbent operator refusing or unjustifiably delaying interconnection, as well as sharing (leasing), of the ducts and some other parts of infrastructure.

1.4 On-Going Regulatory Developments Concerning Alternative Networks

By 31 December 2000, Telekom Slovenije will have had a monopoly on the construction and management of the public telecommunications network intended for the provision of public telecommunications services, data communications and global broadband and multimedia telecommunications. The Law on Telecommunications is not specific about the liberalisation status after this date.

According to Article 64, the Government of the Republic of Slovenia should adjust the policy of the development of telecommunications to market conditions in accordance with the National Programme for the Development of Telecommunications (O.G. RS, No 23/00, 15 March 2000) before the implementation of the liberalisation of the telecommunications market. The National Programme was adopted by the National Assembly at its regular session on 29 February 2000.

The legal framework for liberalisation of alternative networks after 1 January 2001 will be defined by the new law on telecommunications. It is being prepared by the Ministry of Transport and Communications and has not yet been approved by the Government. Meanwhile, on 10 February 2000, a group of members of the National Assembly submitted a Law on Telecommunications (similar to the governmental one) to the National Assembly (Porocevalec DZ, No. 10/00, 18 February 2000) for the quick proceedings. It was withheld as there was another law covering the same area in the proceedings, i.e. a Law on Changes and amendments of the Law on Telecommunications

II. Inventory of the Major "Public" Utilities with a Potential for Use in IS Applications

2.1 Types of Companies Offering Networks

By 21 March 2000, the Telecommunications Administration had issued 11 licenses altogether for the provision of leased lines, and 39 licences for cable communications and/or cable distribution systems.

Operators / Service Providers With Licences for Leasing of Telecommunications Lines

Operators / Service Providers With Licences for Cable Communications and Cable Distribution Systems

Operators / Service Providers With Licences for Cable Distribution Systems

Utility companies and cable TV operators are current providers of alternative infrastructure.

There are several private networks of utilities with the potential of providing telecommunications infrastructure and/or services. For the provision of leased lines, the following utilities were issued licences:

• ELES – Elektro Slovenija d.o.o. (a public utility for the HV electric power transmission),
• Slovene Railways d.d.,
• RTV Slovenija (Transmitter and Communications Department).

There are also other utilities with alternative infrastructure, e.g. Motorway Company in the Republic of Slovenia, that have not decided to enter the telecommunications market.

There are more than 80 cable TV operators with no single dominant operator. By 21 March 2000, 39 cable TV operators were granted licences in accordance with the Regulations on the Issuing of Licenses for the Provision of Commercial Telecommunications Services (O.G. RS, No. 75/98). The largest amongst them are:

• Telemach d.o.o. (former Meglic–Telecom d.o.o.),
• KRS Tabor d.d.,
• Astra Telekom d.o.o. (Gorenjski kabel),
• KRS Rotovz d.d.,
• KRS d.d. (Velenje),
• Ljubljanski kabel z.b.o.