July 1999

Albania Master Report

I- General Background

1. General Telecom Policy

The regulatory framework for telecommunications in Albania was established under the Law for Telecommunications No.8038, dated 23 November 1995 (modified by Law No.8287 dated 18 February 1998). In February 1998 an Act was approved for establishing the Telecommunication Regulatory Entity (TRE) as an independent regulatory body. Telecommunications policy, approved by the Council of Ministers, is oriented towards European Union policies, procedures, and standards, in expectation of entering the EU in 2000. The Government structures telecommunications policy through the Ministry of Public Economy and Privatization. The Ministry regulates/adjusts the telecommunications sector through both the TRE and the General Department of Post and Telecommunications.

Telecommunications policy aims at the harmonized development and extension of the telecommunications infrastructure within Albania, in order to provide:

• Access to basic telephony services with reasonable prices;
• A widely differentiated set of modern services (such as Internet and other advanced telecommunication services), which should be accessible by the Albanian population;
• Competition and selection for users;
• Improved protection for consumers.

Amendments to the existing "Law for Telecommunications" are needed, esp. in the two areas: first, the government should allow for the privatization of ALBTELECOM and AMC; second, the regulatory framework for telecommunications has to improved in order to implement a contemporary telecommunications policy. The policy goals will be achieved if the rate of investment in telecommunications infrastructure accelerates and suppliers’ services are targeted to meet users' requirements.

2. Institutional structures in charge of the regulatory issues

The following organisations are in charge of telecommunications affairs:

• Ministry of Public Economy and Privatisation
• The General Directorate of Posts and Telecommunications (part of the Ministry of Public Economy and Privatisation)
• The Telecommunication Regulatory Entity (TRE).

2.1 Ministries in charge of telecommunication issues

The Ministry of Public Economy and Privatization with telecommunication issues. Its tasks are:

• submission of policy proposals to the Council of Ministers about development and legislation of the posts and telecommunications sector and services; and
• representation of the Albanian Government in international agreements, conventions and bilateral or multilateral protocols in the postal and telecommunication sectors.

The General Directorate of Posts and Telecommunications is a Directorate within the Ministry of Public Economy and Privatization. Its tasks are:

• promotion and development of the national telecommunication industry;
• co-ordination of development plans of telecommunications networks related to the needs of public institutions;
• co-ordination and processing of statistical data concerning public operators of posts and telecommunications;
• co-ordination of national maritime services; and
• ensuring statutory obligations are fulfilled in the post and telecommunications sector.

2.2 National regulatory authorities

The Telecommunication Regulatory Entity (TRE) was created by the Law no. 8288A of 18 February 1998. Being a legal public and self-financed entity, its tasks include:

• granting of licenses;
• management of the radio frequency spectrum;
• type approval and standardization of communications equipment and materials;
• protection of consumers;
• settlement of disputes arising with regard to interconnection;
• numbering; and
• control of quality.

The TRE is managed by a Board of Directors composed of five members who are in charge of different sectors of the TRE. They are nominated for a five-year term and cannot be re-elected for more than two terms.

2.3 Authorities of frequency delivering

Frequency delivering is a component of the Telecommunication Regulatory Entity. The Plan of Frequencies is expected in 1999. This plan will address distribution of frequencies to users, in accordance with international recommended standards and procedures. The distribution will be decided by ITU, CEPT and EU. The TRE will also provide technical assistance on radio-TV frequencies that are managed by respective radio-TV authorities.

2.4 Office for the protection of economic competition

Law No. 8044 for Competition, dated 7 December 1995 contains procedures and measures to enhance competition, as well as protection from unfair competition. The law is administered by the Telecommunications Regulatory Entity.

2.5 Consultative councils

There is no consultative council at present. Plans for its future establishment are currently at the preliminary stage.

2.6 Public Telecommunication operators

There are currently two public telecommunication operators in Albania: Alb-Telecom and Albanian Mobile Communication (The status of both them is "Anonymous Company"). Both of these companies are fully state owned.

3. International relationships and agreements

The Minister of Public Economy and Privatization represents the Albanian government in international agreements and bilateral/multilateral protocols in the telecommunications sector.

Albania is represented by ALBTELECOM in EUTELSAT. Albania is also a member of the International Telecommunication Unit (ITU), CEPT, ETSI, and ETNO.

ALBTELECOM and New World Telecom have a protocol-agreement to establish a joint-venture telecom service in rural areas. It is being set up to address the enormous deficiencies in telecommunication provision and the low level of telecommunications development in rural areas.

4. Regulatory framework

4.1 Historical overview

Following the break-up of the Former Republic of Yugoslavia, Albania inherited an infrastructure that did not have national coverage. Some progress has been made during the period of transition. In 1998 there were over 3.5 subscribers per 100 inhabitants and 4,474 mobile phone numbers. It was only possible during the last three or four years to extend the telephone lines (for direct call services not through the operator) to the most developed cities, but this is an ongoing process that will take a few years to complete. Comparisons with neighbouring countries such as Italy and Greece, as well as other countries of former socialist regimes, show that Albania is ranked among the most undeveloped countries in this sector of telecommunications.

4.2 Present general legislation

Currently there are two laws, the Law for Telecommunication No. 8038 dated 23 November 1995 and the Law for the Telecommunication Regulatory Entity, No.8288 dated 18 February 1998, that manage the telecommunications service. However, it appears that as a result of imminent approval of telecommunication policy on June 1999, the content of these laws will be changed and/or adjusted by new acts and regulations in this field during the forthcoming months. At the end of each year the Telecommunication Regulatory Entity is required to present a report to the government on action taken on the regulatory framework during the year, as well as the performance of other duties as mandated by law.

4.3 Key legislative measures

The Council of Ministries is currently discussing its approval for the existing legal framework, as well as the adjustments in terms of telecom policy. No concrete measures have been taken in this area.

Key legislative and regulatory measures

4.4 Issues

4.4.1 Liberalisation

4.4.2 Licensing

The Board of the Telecommunications Regulatory Entity (TRE) has the right to issue licenses.

4.4.2.1 Licenses in telecommunications sector are classified as follows:

1. Licenses for services for which there is limited competition
2. Licenses for services for which there is free competition.

4.4.2.2 Licensing conditions

The Board of the TRE will issue different types of licenses if the applicant complies with the following conditions:

• is professionally capable;
• has sufficient financial means necessary to comply with the functions and conditions pertaining to the type of license applied for;
• has sufficient experience in the telecommunications sector to fulfil the obligations set forth by the license;
• has personal merits, such as integrity and seriousness; and
• is based in the Republic of Albania and has a representative responsible for communicating with the Commission and other state bodies on licensing activities.

Separate licenses for limited competition services are granted for each service to any local or foreign legal persons, winners of the international open bid, who comply with the conditions set forth and who are considered of interest to the country.

Licenses for free competition services are granted to each legal or real person, local or foreign, who meets the conditions set forth by license.

4.4.3 Universal Services

According to the law for Telecommunication Regulatory Entity, it is foreseen that telephony will be a universal service. However the licensing conditions for telephony services do not reflect the changes that are required to satisfy telecommunications policy.

4.4.4 Tariff policies

The Council of Ministers set tariffs for telecommunication services where there is limited competition, following proposals by the General Department of Post-Telecommunication. The level of these tariffs reflects the operator's competence and their compliance with basic principles.

The Telecommunication Regulatory Entity (TRE) designs the procedures for setting the tariff level for liberalised services. The TRE sets the tariff level based on the competence of the operators that offer such services. The tariff level is intended to:

• protect users from monopoly prices;
• promote the efficiency of economic sectors by the provision of exact information about prices as a function of the demand and supply for several operators;
• reflect the changes in cost, different consumer categories and types of services.

4.4.5 Quality of services

Operators set quality standards for their own services. There is no national quality standard for telecommunications.

4.4.6 Interconnection

The Albanian Mobile Communication company and some private associations/companies provide Internet access. Some companies are restricted to providing Internet access only to their operators and NGOs and not to private services to individuals/companies for commercial use.

Interconnection procedures and management guidelines for operators, as well as agreements for network interconnection that provides basic telecommunication services, will be published in all mass-media channels. The price of interconnection will deal only with the cost of provided services, taking into consideration the cost of any added network equipment.

5. Freedom and Protection

5.1 Copyright and intellectual property rights

Copyright and intellectual property rights are protected by law no. 7564, dated 19 May 1992 on "Copyright".

5.2 Privacy, data protection, consumer protection

The law governing the Telecommunication Regulatory Entity contains some articles on consumer protection. It is managed by TRE.

5.3 Electronic protection, legal protection and security (encryption, electronic commerce)

As yet there is no policy or regulations on electronic protection etc.

5.4 Freedom of expression and information

There is complete freedom of expression and information in Albania. This situation has followed the introduction of democracy in Albania.

6. Policies of the Information Society

The Information Society has only recently become established in Albania and is therefore new and not yet sophisticated. The Internet was legalised in Albania on 20 October 1998. E-mail services have existed in Albania since 1996.

6.1 Fields of Information Society implementation

The Information Society is restricted by undeveloped infrastructure. This reduces opportunities for the provision of an e-mail/Internet service.

Government and the Ministry of Information are using the Information Society to make government activities in different fields more transparent to the public, as well as to provide a service containing both national and international news.

II - On-going Developments

1. On-going changes in institutional structures

Discussions are taking place in the Ministry of Public Economy and Privatization and Telecommunication Regulatory Entity about establishing the following:

• National Council of Frequencies and Numeration, which will design the plans that should be implemented by TRE.
• Telecommunication Consultative Council with the participation of consumers, operators and suppliers. This Council will have the right to discuss several aspects dealing with public telecommunications, as well as enabling the council to issue a license or to amend an existing one.

2. Ongoing changes in regulatory framework

There will be several changes in regulatory developments in terms of adjustments in legal framework and implementation, according to the telecommunication policy, which has been approved by Council of Ministers on 18 June 1999.

Legislation will provide a clear division of regulatory functions and property ones, as well to implement them in the most transparent way. The Telecommunication Regulatory Entity will be the authorized entity to promote users interests as well as to regulate the telecommunications sector.

2.1 Telecommunication liberalisation and new fields of developments (wireless local loop, internet)

Currently telecommunications in general is not liberalised. TRE are in the process of designing and implementing procedures for the privatization of ALBTELECOM and AMC. The plans include a frequency plan permitting mobile operators to compete with fixed telephony services on the same terms.

The Internet, which is currently liberalised, will be regulated in future. This will present a clearer picture for investors.

2.2 New laws/measures under preparation

There are procedures under preparation for the privatization of Albanian Mobile Communication - Anonymous Company and ALBTELECOM - Anonymous Company. (See the Attachment #1)

2.3 Allocation of resources (frequencies, numbering, access rights, licensing etc.)

The TRE has responsibility for the allocation of resources. The TRE is developing a frequency plan permitting mobile operators to compete with fixed telephony services on equal terms.

3. Media and telecommunication markets: privatization, foreign investments, mergers and acquisitions, etc.

There has not been any change in the media and telecommunication markets. Privatisation of the Albanian Mobile Communication is expected to be the first (and was foreseen to be fulfilled on first half of 1999) followed by ALBTELECOM (at the end of 1999).