January 2000

Central and Eastern European Countries Synthesis of Update Memos

1. Overview

Full liberalisation of telecommunications markets in Central and Eastern European countries will occur between January 2001 and January 2006, that is to say, only just after the European Union (1998). Indeed, alternative infrastructures are now open for the provision of all services, excluding basic voice services, in nearly all the countries.

The diagram below presents the alternative infrastructure liberalisation timetable.

Alternative infrastructures liberalisation timetable

National reports clearly show rapid developments in the markets : applications for telecommunications licences by alternative infrastructure owners (railways, highways), the up-grading of networks, large investments from foreign operators, seen especially in cables and cable television, consortium constitutions framed with future liberalisation in mind, …

The figure below provides an overview of the growth of competition in Central and Eastern European markets .

Central and Eastern countries competitive landscapes

 3. Main events in the last quarter September – December 1999

3.1 Importance of cable networks

It is worth noting that in Bulgaria, at the end of 1999, licences were issued to private television stations : Balkan News Corporation, financed by Rupert Murdoch, and to EBRD, a subsidiary of the Swedish company MTG Broadcasting.

In Hungary, the French Company Vivendi, (which owns the second French telecommunications operator Cegetel), bought 35.5 % of Hungarian Eurotel. Hungarian Eurotel (a 380-km long optical cable) is the main alternative operator in Budapest. It is worth noting the presence of the American Cable Company UPC in the cable sector. UPC has major ambitions in Western and Eastern Europe where it is very active.

In Estonia, licences were issued to 2 cable operators, Tallinn Cable Television ( to cover the area of Tallinn, held by the Scandinavian telecommunications Company Netcom AB), and Rainis Laidma (area of Tartu). A lot of cable companies have started to offer Internet access.

3.2 Numerous issue of radiocommunications licences in broadband frequencies

In the Czech Republic, BroadNet Czech, a subsidiary of the Brussels-based Company BroadNet Europe, entered the Czech telecommunications market and applied for a licence in the 26 GHz band. The new alternative operator wants to start offering Internet high speed access and multimedia services. Callino, a subsidiary of Formus Communications, also entered the market and applied for a licence in the 26 GHz band. The objective of Callino is to offer high speed Internet access and other services.

3.3 Alternative infrastructures owners involvement into the telecommunications market

In Poland, the Ministry of Posts and Telecommunications is to issue 3 licences for the provision of long distance voice services. PKP, the Polish Railways, belongs to a consortium which has answered the call for tenders. This is also the case with Tel-Energo, an energy utility.

In Slovenia, the end of Telekom Slovenije monopoly is forecasted by the end of 2000. Alternative infrastructure owners are positioning themselves in the telecommunications market. Indeed, 2 consortia were constituted which include utilities. The first consortium includes Slovene Railways, and the municipality of Ljubljana. This consortium acquired a majority share in one of the largest Slovene Cable TV operators.