February 2001

Central and Eastern European Countries Synthesis of Master Reports

Synoptic Tables - January 2001

Introduction 1. Definition 2. The regulatory background 2.1 The Acquis communautaire 2.2 Countries regulatory situation 3. Actors and strategies 3.1 Actors 3.2 Strategies 3.2.1 Alliances strategies 3.2.2 Products strategies

The liberalisation process and the emergence of a multitude of new technologies should lead to a major transformation of the Central and Eastern European telecommunications landscape. Alternative infrastructure liberalisation will play a key role in the shaping of the future telecommunications industry. New entrants will be able to compete with incumbent operators

As far as supply is concerned, the ability of alternative infrastructure owners to bring about the rapid modernisation of their networks and to propose a diversified provision of services will be an important condition of the development of the sector.

As far as demand is concerned, new operators (such as mobile operators and ISPs), main potential users of alternative infrastructures, whose needs have not always been met, should see the development of competition in a very positive light. Indeed, the development of competition in the field of alternative infrastructures should result in a number of positive effects : improvement of networks quality, reduction of prices, etc.

The telecommunications liberalisation has begun in most countries, and therefore alternative infrastructures have been authorised to provide those services already liberalised : most of the time data and Internet access services. The process should be completed between 2001 and 2006, timetable of the liberalisation of the telecommunications sector over the region.

A main component of the liberalisation process is the willingness of integration in European Union of Central and Eastern European countries. This involves embodying European legislation, and thus, a lot of transformations of countries national laws

The liberalisation of alternative infrastructures should favour the development of the information society, given the multiple side-effects : the development and diversification of the offer, the quality increase of networks, the prices decrease, etc.

The purpose of this document is to provide a broad perspective of the alternative infrastructures in Central and Eastern European countries, with particular emphasis on the regulatory background and actors strategies.

This document is based on the contributions of the national contractors to the ESIS II project. For more information, please see national reports.

In this report, alternative networks are defined as those infrastructures owned and operated by public players (e.g. utility companies: electricity and gas suppliers, pipelines, highways, railways, …) or private companies (such as banks, …), that have the potential to be used for the construction of telecommunications networks and the provision of services.

Alternative networks were developed by companies for whom telecommunications are essential and whom, in general, public telecommunications networks were not able to provide with all the services they needed (performance, confidentiality, competitive tariffs, customised functionalities, …). They are usually kept for the specific needs of their owners.

Our definition of alternative networks also includes telecommunications infrastructures operated by new entrants in competition with incumbent operators such as cable networks, new wire line and wireless networks.

Today, telecommunications liberalisation in several countries, together with a growing demand for communications capacity emanating from ISPs, mobile operators, etc. could drive infrastructure owners to prepare an entry strategy into the telecom market. Nevertheless, these players are waiting for high quality networks and services. It is clear from reading national reports that the real development of an alternative infrastructures supply will necessitate considerable preliminary investment in order networks to be upgraded. This, in addition to the need for a regulatory opening and public enterprises statutory changes.

2.1 The Acquis communautaire

The introduction of competition into a market previously dominated by one operator usually requires the implementation of a set of rules or regulations to promote newcomers and to prevent abuse by the dominant operator. The European Union is playing an important role in the introduction of competition through the set of Directives it has adopted.

The adaptation and implementation of the European directives constitutes a major priority for Central and Eastern European countries.

Key elements in the EU-driven alternative infrastructures process are :

• An end to monopolies by a specific deadline,

• The establishment of a framework for a competitive market. In particular, the establishment of an adapted licensing regime

• The development of open access to networks, the requirement being that every telecommunications operator should be entitled to access infrastructures on a fair and equal basis, at a reasonable price.

2.2 Countries regulatory situation

The alternative infrastructures liberalisation is being implemented at varying speeds in the different countries studied.

Some countries, such as Poland, the Czech Republic, Slovenia, Estonia and Hungary, are experiencing a very advanced stage of effective liberalisation. This is mainly due to the facts that they take part to the first wave of countries to integrate the European Union, to the already / imminent liberalisation of telecommunications (2001 - 2003), to the growing demand for additional capacity from new operators (above all, Internet access providers and mobile operators), are the reasons behind the more active position of alternative infrastructure owners.

Particularly noticeable : the growing presence of foreign operators and the forecasted award of UMTS licenses in Czech Republic, Poland.

However, in other countries such as Albania, Bosnia & Herzegovina, the Republic of Macedonia, the process is developing at a much slower pace.

Countries where the national operator lost it's final monopoly on the 1^st January 2001:

In Czech Republic, the enactment of the new Act on Telecommunications on July 2000 constitutes a fundamental shift as it opens the market to competition : end of monopoly of Czech Telecom on voice services since January 2000 the 1^st . The market yet knows an advanced state of liberalisation :

• 3 mobile operators (GSM 900 / 1800) : Eurotel Praha, Radiomobil and Cesky Mobil

• issue of 3 fixed wireless services licenses on September 2000 to Broadnet Czech, City / Star One and Nextra wireless. These 3 operators will constitute key competitors at the local loop level

• among the future competitors of Czech Republic : Aliatel (Power Distribution), GTS, and the cable operator UPC (Kabel Plus and Kabel Net)

Sign of the dynamism of the market, it is forecasted to award 4 UMTS licenses by mid of 2001.

In Poland, after several months of discussion, the government finally chose the France Telecom / Kulczyk consortium as the strategic investor in the incumbent operator TPSA. The agreement to acquire 35 % of TPSA shares was signed on July 2000. By 2001, the strategic investor will have the possibility to increase its share to over 50%.

The Polish market is widely liberalised and is strong and dynamic :

• TPSA enjoys a monopoly on international voice services until 2003. Excluding this segment, the market is liberalised and several operators are in competition on nearly all the segments (for more details please see the national report) :

  • Over 100 licenses for the provisioning of local voice services have been awarded to operators : among them, Netia, Elektrim, etc

  • Three operators were awarded long distance voice services in May 2000 : Netia, NG Koleje Telekomunikacja and Niezalezny Operator Miedzystrefowy

  • Data and Internet services are fully liberalised

  • There are three mobile operators Centertel (TPSA), Polkomtel and Polska Telefonia Cyfrowa

• On April 2000, the Ministry of Post and Telecommunications announced its main objectives: support the increase of competition and the development of ISPs, and creating regulations to deal with voice-over-IP services.

• In addition, the ministry announced it was going to launch an invitation to tender for UMTS at the beginning of 2001.

In Estonia, AS Eesti Telefon (100% owned by AS Eesti Telekom) lost its monopoly on voice telephony services on January 2001 the 1^st . The Nordic and Baltic operators Sonera and Telia owned 49 % of AS Eesti Telekom. 3 mobile operators are in competition, mainly owned by foreign operators :

• AS Eesti Mobiiltelefon (100% owned by AS Eesti Telekom)

• Ritabell (partly owned by the Swedish company Netcom AB)

• Radiolinja Eesti AS, subsidiary of the Finnish company OY Radiolinja AB.

In Slovenia, as in Czech Republic and Estonia, the monopoly of Telekom Slovenije on voice services ended on January 2001 the 1^st . Alternative infrastructures were yet liberalised for the provision. The market knows the emergence of a lot of new entrants. During the year 2000, several alternative infrastructure providers, cable TV operators and ISPs claimed that the complexity and cost of the current licensing procedures represent genuine business barriers to the development of competition.

Countries where the national operators will loose their final monopolies by the 1st January 2003:

In Hungary, the end of the monopoly of the incumbent operator Matav on public telephony voice services, is forecasted on January 2003 the 1^st .

Currently, the market benefits from a substantial development and several important events have taken during the year 2000 :

• While Matav is due to lose its monopoly on public voice services within 2 years, several potential new entrants, active on the long distance market, GTS, Novacom, Pan Tel, UPC, Vivendi, Antenna Hungary, British Telecom, Pannon GSM and Vodafone have been expounding the need for clarification of regulation of network access conditions and interconnection arrangements with Matav to enable the genuine development of competition

• The year 2000 brought significant changes in the ownership structure of Matav : Deutsche Telekom gained full control of MagyarCom, the holding established with SBC, holding 59.49% of Matav

• Notably, Matav itself has recently signed two contracts, one with Ericsson and the other with Nortel Networks, for the provision of private network data communications solutions

• Matav should launch ADSL services in the near future

The Hungarian market also count 3 mobile operators :

• Primatel (Vodafone/AirTouch, RWE Alliance, Hungarian Post, Antenna Hungaria)

• Pannon

• Westel (Matav, US West)

In Latvia, the historic operator, Lattelekom, the Latvian Telecommunications Operator has a monopoly on voice services until January 2003 the 1^st . There are two mobile operators. A third license is to be awarded in 2001.

In Lithuania The Law on Telecommunications of August 1998 the 1^st , harmonised with Eu requirements, regulates the Telecommunications sector. Lithuania Telekomas enjoys a monopoly on voice services until January 2003 the 1^st . There are four mobile operators

• Bite GSM (TeleDenmark)

• Tele 2 (Netcom – Sweden)

• Omnitel (USA owner)

• Comliet – NMT (Lithuania Telekomas)

According to the telecommunications law, until the full liberalisation of the market, the use of alternative networks for the provision of public voice services is not allowed. The provision of data and Internet services via cable TV networks is allowed.

In Romania, Rom Telecom has a monopoly on public voice services and infrastructures until January 2003 the 1^st. 3 mobile operators are in competition : CosmoRom, Mobifon, Mobilrom. Data and Internet services are fully liberalised. Excluding Data and Internet sectors, the role of alternative networks is currently rather limited.

In Slovakia, 4 major events have occurred in 2000

• the enactment of a new law on Telecommunications, entered into force on July 2000. The new law is supported by requirements of EU legislation. According to the law, Slovak Telecom will loose its monopoly on public voice services on January 2003 the 1^st

• The acquisition by Deutsche Telekom of 51% of Slovak Telecom, the other 49% shares being owned by the State,

• The possibility to provide voice services over IP networks

• Potential issue of wireless local loop licenses in the future

• In November 2000, the government announced it has planed to award 3 UMTS licenses by the end of 2001.

The Slovak market is quiet a mature market :

• 2 mobile operators (GSM 900 / 1800) : Globtel GSM and Eurotel

• strong competition on the Internet market, with more than 80 ISPs. Since 1998, special wholesale tariffs are proposed by Slokak Telecom to ISPs for dial up services. Nevertheless, it is clear that the telephone tariff represent an important barrier.

In other countries, such as Albania, Bosnia & Herzegovina, and the Republic of Macedonia, the process is developing at a much slower pace.

In Albania, the market is very closed, nevertheless important developments have taken place in 2000 oriented toward openness :

• New law on Telecommunications oriented toward the harmonisation with EU directives

• In July 2000, the privatisation of the mobile operator AMC, a Greek – Norvegian consortium Cosmote – Telenor having acquired 85% of shares

• A second mobile license should be awarded in February 2001.

The national operator, AlbTelecom, has a monopoly on public services.

Currently, there does not exist any alternative network support of telecommunications services.

In Bosnia & Herzegovina, all efforts are oriented towards the reconstruction of infrastructures, destroyed by the war. The country has been involved in modernisation programmes with the support of the EBRD and ITU for 3 years.

One must outline that competition is becoming intense on the Internet market.

There are three telecommunications operators, all State-owned and acting on monopoly on their reserved area :

• Telekom Srpska in Republic of Srpska

• PTT Bosnia and Herzegovina covers the Bosniak dominated area of Federation of Bosnia and Herzegovina

• HPT Mostar covers the Croat dominated area of Federation of Bosnia and Herzegovina

There are also three mobile GSM operators, each of them being present on the areas quoted before.

Currently, there is no "public" alternative infrastructure offer. But, companies can built proper networks to meet their own telecommunications needs.

The liberalisation of the market in Republic of Macedonia is forecasted for January 2005 the 1^st. Macedonian Telecommunications is on monopoly on a set of services and infrastructures: public voice services, telegraphy, telex, public pay phones, leased lines and public networks. Alternative networks for the provisioning of services to the public are not allowed. Nevertheless, they can be used by companies or governmental bodies for their own needs.

It is interesting to note that the provision of rural telephony has been liberalised in several countries where the lack of infrastructures is very important, in Albania for example, but also for a few years in Poland. The objective is to enable a quicker development of telecommunications in the most isolated and the less profitable areas.

3.1 Actors

Owners of alternative infrastructures may be distributed in 3 categories present on the following geographical segments :

• local,

• regional,

• national.

The table below presents main types of alternative network providers present in Central and Central Eastern countries and the geographical levels at which they are active:

Alternative actors matrix

Actors	Local	Regional	National
Railways	-	x	x
Highways	-	x	x
Power and Gas Companies (ex. Aliatel in Czech Republic, Tel-Energo in Poland, Conel in Romania)	-	x	x
Municipalities (ex. municipality of Ljubljana in Slovenia)	x	-	-
Local transportation (ex. Pragonet in Czech Republic)	x	-	-
Cable-operators	x	-	-

Key:
 - = No alternative network
X = Alternative network  

A reading of national reports makes it clear that different markets are developing at different speeds.

Markets that have been "fully" liberalised since January 2001 are experiencing a strong growth of alternative actors.

In other countries, the supply of alternative infrastructures is just emerging. A huge amount of investment is needed to upgrade infrastructures, structural reforms are still awaited (certain public enterprises need statutory changes), all of which means that the development of an alternative supply will take some time.

The following groups of countries may be identified :

Czech Republic, Poland, Estonia, Slovenia, : multiple actors in emergence

On these recently liberalised markets, competition is organising at a very rapid path. It emanates both from local loop operators (cable-operators, municipalities, …) and long distance operators (operators, utilities, etc.). Furthermore, important utilities are involved in strategic plans regarding the positioning on the telecoms sector. Markets are the scene of the set up of consortium including companies having complementary assets and resources (local loop and long distance networks, know how, financial means).

The Czech Republic has seen a very fast development of alternative actors. Indeed, a large number of new entrants have come into the market, so that the Czech Republic is now amongst the most open and dynamic telecommunications markets in Central and Eastern Europe. It is attractive to foreign operators.

The competitors belong to the local loop market as well as to the long distance market. They include operators, cable operators, institutions, …

For instance we can quote :

• Alternative operators owned by foreign capitals :

  • in 2000 the second quarter of 2000 UUNET Czech Republic (a wholly-owned subsidiary of UUNET/ MCI WorldCom) entered the Czech market to offer IP-based services, mainly to companies.

  • And GTS, an alternative telecommunications operator (owned by Global Telesystems Inc.) offering voice, data and Internet services, announced in June 2000 that it intends to invest CZK3 billion (approximately 84 million ECU) over the next three years in its infrastructure and technology in the Czech Republic.

• Municipalities :

  • In May 2000, Deutsche Telekom won a public tender and became the strategic partner of Pragonet, acquiring 51% of its shares for $25 million. Pragonet is a metropolitan network founded by the City of Prague in 1996, which runs optical cables in the tunnels of Prague's subway and on surface in adjacent premises.

• Cable operators :

  • Several cable operators, UPC subsidiaries, etc, are planning the development of a multi-services offer.

• Utilities :

  • CezTel, a subsidiary of the power company CEZ created in 1999 to operate the digital is to position on the telecommunications network and is searching for a strategic partner. CezTel has yet a carrier’s carrier activity : it is providing leased digital lines to operators as Aliatel or GTS

  • Ceske Railways have created a subsidiary dedicated to telecommunications

In Estonia, important developments have been observed since 2000, mainly from the cable operators.

The cable operators Levicom Broadband, Tallinna Kaabeltelevisioon, Starman and STV have plans to enter / have yet entered on the telecoms market starting providing data and Internet services. The alternative operator AS Comtrade has formed a partnership with cable operators Starman and STV to provide high-speed Internet access over cable since July 2000.

More generally, competition is increasing on the data market.

Another important event is the official announcement by the utility Eesti Energia of its intention to enter on the telecoms market.

One can also notice the future privatisation of the Estonian Railways. In reason of their extended network throughout the territory, the Railways could constitute a main carrier’s carrier alternative operator in the future.

In Poland, the market is experiencing a rapid increase in competition. While the market has been liberalised since January 2001 the 1^st, the competition seems yet very structured. Without a doubt, the positioning of competitors has been encouraged by the government willingness : on April 2000, the Ministry of Post and Telecommunications announced its main objectives: support the increase of competition and the development of ISPs, and creating regulations to deal with voice-over-IP services.

Alternative actors are present on the local segment (as Netia Holding) as well as the regional and national segments (three operators – Netia, NG Koleje Telekomunikacja and Niezalezny Operator Miedzystrefowy – were awarded long-distance operator licences in May 2000).

In addition, certain utilities are very active : this is the case of TelEnergo, a power company that operates a long distance network, which is a shareholder of the operator Niezalezny Operator Miedzystrefowy.

About telecommunications over cable : PTK Polska Telewizja Kablowa Sp z o.o ( The Polish Cable Television) has got a license for the deployment and use of telecommunications networks. This license is for broadband data transmission services through nationwide cable TV networks. The service will start in December 2000 in Warsaw and Krakow.

In Slovenia, the alternative networks market has known a significant development in 2000, on the local loop market (20 cable operator received a telecommunications operator license, mainly to provide Internet access in a first step) as well as on the long distance market (10 alternative operators received a license).

Interestingly, consortiums have been set up, they should be major competitors. Amongst them, Telemach (owned by Slovene Railways, and the city authorities in Ljubljana, Materline, Gorenje, Eon and so on) is actively investing on a very large scale, to expand its network.

Hungary and Lithuania : rapid developments of the markets

The liberalisation of the market is scheduled for January 2003. A lot of actors are yet positioning, both national and international.

A number of events have also taken place during the last year in Lithuania. These include the launch of new services by mobile operators, planned privatisation of Lietuvos Energija and developments by players in the Internet industry:

• Bite GSM (which holds 40% of the mobile market) began providing Internet services via its GSM network in June. And Omnitel, another mobile operator, is developing electronic banking services to be delivered via its GSM network. One of Omnitel’s customers is the bank Snoras, for which it is already operating services including iBankas and GSM-Bankas.

• Comliet, a mobile telephony subsidiary of the historic operator Lithuania Telekomas, is implementing microwave infrastructures in rural areas without fixed connections. Comliet has signed a 7.5 million euro contract with Nokia for wireless provisioning.

• Preparations are under way for the future privatisation of Lietuvos Energija: the restructuring and partial privatisation of the company could take place in 2001. Lietuvos Energija has installed fibber optic lines between the main cities Vilnius and Kaunas, the line Kaunas – Klaipeda is being installed. 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. Some data publication operators are negotiating with Lietuvos Energija agreements to set up collaborations in order to use fibber optic infrastructure in near future.

• In September Lithuania’s Prime Minister Mr A.Kubilius and the Prime Minister of Poland Mr J.Buzek signed an Agreement for the implementation of a Power Bridge to the West. The respective Prime Ministers signed a joint letter to the European Commission asking for financial support to realise this project.

• 3 majors cable TV players acquired by UPC are being restructuring with a common management

• Lithuanian Railways : The state enterprise Lietuvos Gelezinkelis (Lithuanian Railways) has plans to develop fibber optics communications infrastructure along the main railways transport corridors. Currently, the company has about 100 km optics communications infrastructure and uses for management purpose its own copper lines or leased lines from Telekomas.

• Radio communications : The State enterprise Lithuanian Radio and TV Centre - LRTC has its own radio relay infrastructure (28 radio relay stations) between the main cities, which are 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. LRTC received 5 proposals; therefore the competition process was protested twice by Norway’s Company "Nera AS" (winner of the third place) during one year.

• It is interesting to note that further developments of cable TV infrastructures have also taken place during 2000. These include extension of cable networks and upgrades to enable Internet provisioning. This means that most of cable companies are now capable of providing Internet access, even if few of them are yet doing it.

Hungary has seen the emergence of a lot of new entrants for the last 2 years, mainly owned by Western European and American capitals. One can notice for example,

• Novacom which could form a partnership with the Budapesti Electricity Company and the Budapest Transport Company to provide telecommunications services

• GTS Hungary, subsidiary of the American company, which provides Internet access and data services from 1999

• The cable operator UPC Hungary which has more than 500 000 cable TV subscribers, noticeable base to provide a variety of telecoms services

• The cable operator Fibernet, owned by the investment fund American Prudential

• Hungarian Eurotel, 380-km long distance fiber network, strong presence in Budapest, 35,5 % owned by the French company Vivendi International

Latvia, Romania and Slovakia : a slower involvement of potential actors

In Latvia, there have been important governmental changes in 2000. In the ‘Declaration on the intended activities of cabinet ministers’, the new cabinet explained its stance regarding telecoms and information technologies. The main points were:

• the end of Lattelekom’s monopoly in 2003 and the willingness to promote effective competition in the telecoms sector

• accelerated liberalisation of the wireless communications market

• promotion of Internet development in Latvia.

National players versus new entrants : Lattelekom only has the right to offer its network for public services. Nevertheless there are several institutions in the country, that potentially can become the public telecommunication network owners and offer their services after cancelling the Lattelekom's monopoly.

Among these companies :

• the utility company Lavtenegro owns a long distance network. The company is modernising its network (more than 6 Euros million) to offer services in the future

• Latvian Railways also indicated a potential activity in the telecoms sector when it is liberalised

The Internet market is seeing increasing competition.

In Romania, utility companies and railroads are involved in significant restructuring and modernisation projects. Most of these projects are supported by loans from international organisations such as the World Bank and EBRD. The upgrading of telecommunications networks and development of ad hoc strategies are part of the global restructuring process. The national electricity company, Conel, has announced a $170 million investment programme to upgrade its network. The company has also announced its intention to establish a joint venture with the national railways, to enter the telecoms market in the medium term.

In Slovakia, alternative actors are slowly emerging. Currently, among potential important future actors one must quote 2 actors positioned on the long distance segment :

• The power consortium Energotel : four companies received a license to provide leased lines services

• Transtel, telecommunications subsidiary of the oil company Transpetrol.

Albania, Bosnia-Herzegovina, Bulgaria and Republic of Macedonia: still no alternative players emerging

In Albania, the regulatory framework remains an enormous barrier to the creation of alternative networks. Indeed, Albtelecom has a state monopoly over public telecommunications networks and services. Alternative networks are not allowed. Only some utilities, state-owned, have a telecommunications network with a potential use for their owned needs. different regulatory developments could facilitate the emergence of additional players in the market:

The economic and regulatory situation explains why no companies are currently preparing a strategy to enter the Albanian market.

Let us outline the fact that the Telecommunications Regulatory Entity (TRE) has partially opened rural telephony to competition in 2000. It has licensed 9 rural operators. Nevertheless, this is a particular development. Indeed, the liberalisation of rural telephony is often used to enable more rapid development of telecommunications infrastructures.

In Bosnia-Herzegovina the market is still very closed and alternative infrastructures are not allowed. Nevertheless, an important privatisation project is planned by the government of the Serbian Republic. This project is intended to play an integral role in economic recovery. Indeed, the privatisation of major companies could be a first step towards the involvement of new players in the telecoms industry. What is more, the adoption of the ‘Law on foreign investment and concessions’, under which foreign companies may invest in Bosnia, could facilitate developments.

In Bulgaria, key players are Internet service providers. Some cable operators provide Internet access, but have not yet announced further plan regarding a telecommunication offer. Most of public utilities are in a restructuring phase and have no plan regarding the telecommunications sector.

In the Republic of Macedonia when it comes to Macedonia’s major public utilities developing infrastructures which might be used by IS applications, so far the Macedonian Railways, the Electric Power Company of Macedonia and Makpetrol-TEAS (established by the country’s leading oil company) have established their own telecommunications networks. It is interesting to note that the Macedonian Railways received a grant from the American Trade and Development Agency (TDA), particularly aimed at helping them upgrade their information and telecommunications infrastructure (see the US TDA Grant entry in the ESIS II database).

3.2 Strategies

Alternative actors strategies depend on a set of factors. Main elements shaping their orientations are the constraints on the current telecommunications business, the regulatory constraints, the main shareholders vision, their core competencies, the maturity of the markets, etc. As liberalisation of market is just beginning, alternative operators are in the first phases of strategy elaboration. Strategies are mainly built around two major elements :

3.2.1 Alliances strategies

The production and sell of telecommunications networks and services imply the possession of specific expertise and resources. Alternative infrastructures owners usually do not have the whole set of necessary competencies. Agreements between actors are truly regarded as vital to develop an activity.

Each category of actors have specific resources :

• A first category of actors have right of ways they can provide other actors with. Municipalities are included in this category. Right of ways are very valuable because they may give access to the local loop

• A second category of actors have networks infrastructures. Infrastructures may include only technical sites and tubes where operators install cables, they may include also fiber optic. Fiber optic may be sold whether "dark", or "activated". Actors are utilities, railways that have long distance infrastructures, and metro owners that have local infrastructures,

• A third category of actors includes cable-operators. Cable–operators have the main advantage to have local loop infrastructures and to be in direct relationship with customers. Cable networks offer important opportunities : up-graded networks enable the provision of high bandwidth Internet access as well as basic voice services. Cable operators are positioned on growing markets, they should be key actors in the future,

• A fourth category of actors includes national and international operators. In a partnership, they bring their technical and marketing know-how. Very large investments that would necessitate the creation of a totally new network explain that new operators associate with infrastructures owners. The opening of alternative infrastructures facilitate the establishment of new operators and stop a potential non profitable duplication of infrastructures. International operators bring in particular their global interconnections facilities,

• A fifth category of actors includes financial such as banks (bringing their funds and financial know-how to the projects), or main commercial partners as main retailers groups, … (bringing their funds, their networks of shops and an important potential of customers). For these actors, participation or diversification in a growing market (e.g. telecommunications) is part of a large strategy.

Partnerships between actors are vital to assembly the whole competencies needed to produce telecommunications services. Many examples can be found in Central and Eastern European countries where several recent partnerships where established between various actors. In Poland, a new long distance operator, the consortium NG Koleje Telekomunikacja, include Polish Railways, and National Grid (British Power Corp.). Netia, another Polish alternative operator includes the BRE bank and the electricity utility, Stoen. In Slovenia, a new consortium includes several different actors , in particular, Slovene Railways, the municipality of Ljubljana and an important cable TV operator. Foreign operators are also strongly present. In Hungary, the French operator Cegetel bought 35.5% of Hungarian Eurotel, the cable-operator UPC is also present in Hungary, Pan Tel is a consortium including in particular the Dutch operator KPN, the Hungarian operators Mav and Mov.

3.2.2 Products strategies

Products strategies highly both depend on alternative infrastructures owners core know-how and demand of end-users.

As far as supply is concerned, the provision of rights of ways (basically offered by municipalities or highways) only is very different from the provision of a customised telecommunications services which include important value added level. Alternative actors have to arbitrate between the costs and opportunities of developing new activities and the potential benefits.

As far as demand is concerned, both residential and companies end-users now want sophisticated services and diversified applications based on always up-dated technologies.

We think that today product positioning can be realised at different levels that include a growing part of value added :

• Right of ways and dark fiber : it is the basic offer that Municipalities and alternative infrastructures owners can consider. It is a basic carriers to carrier offer,

• Leased lines and bandwidth : this can be considered as the first step towards "service providing". This positioning enables operators to target carriers market and big accounts real time applications and dedicated networks between several locations,

• Global communications services and outsourcing : alternative operators aims at becoming full telecommunications operators. Important investments and competencies are needed to develop such an activity, the latter corresponding to an important demand from companies.