January 2000

Albania Update memo

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

1. Legislation

During September-December 1999, a new draft law for telecommunications has been designed.

The previous draft law for telecommunications will be presented and discussed in the Council of Ministers as well as in Parliament. This draft has been designed by experts of the Ministry of Public Economy and Privatization, with the technical assistance of AERIS company and TRE, as well as in cooperation with a consultancy company for strategic privatization in Albania IMI. This law will create possibilities for a good legal and regulatory environment for the possible future investors in the telecommunications market.

The new draft law is in continuance and according to the Telecommunications Development Policy, as well as it provides a harmonized and a competitive environment for the free liberalized market.
The new draft law included all the services that can be provided by telecommunications, especially telephony. So, all telephony services are liberalized, including even fixed and mobile ones. However, it will create the necessary legal opportunities to protect the qualified services of the dominant operators in the telephony market, in order to increase the quality, competition and reduce the tariffs.

For the first time in this draft law a special chapter about the radio-communications has been presented. This chapter aims to put under control the use of radio-frequencies' specter, on the basis of which the issues of private radios and televisions will be technically regulated.

The law prevents some disciplinary measures for some operators that apply abusive tariffs, obstruct other operators, and operate without license.

The draft law also determines also some basic principles for association in the European Union, which deal mainly with transparency and equality among users and nondiscrimination.

For the first time, the possibility of private operators to have activity in rural zones has been presented and the legal measures for disciplining the standards and quality of telecommunications services are determined. The law states that the main operators, which posses more than 25% of market are obliged to provide services in the emergency situations, especially for some special targeted groups, such as population in the most far away rural zones, people with limited capacities, free of charge services for emergency needs, etc.

2. Licensing

2.1 AMC

The AMC got the license in August 20, 1999. Such license was necessary in order to proceed with the privatization procedures.

In December 1999 it was announced that 5 possible companies are competing for buying the AMC. They are: "Turcell"; "Mobil Austria" "Telecom Italia"; "Telenor International" and "Panapfon Greece". They are expected to come in Albania and make a "due to intelligence" analysis. During March 2000 the privatization of AMC is expected to be concluded.

2.2 Albtelecom

Albtelecom, an anonymous company, is still working without a license, which is a state owned property. Taking into consideration of the fact that Albtelecom will likely be privatized next year, after the AMC privatization, it is necessary for it to get a license. During November the TRE (Telecommunication Regulatory Entity) and Albtelecom worked together on the procedures for getting license, but it still has not received a license.

In September 1999, AMC and Albtelecom has reached an important interconnection agreement which allows for cooperation and transparency. Under the agreement, TRE will have in its control all the other agreements of Albtelecom with other mobile operators. This arrangement made Albtelecom abided by the rules of market competition. It was on the basis of this agreement that AMC decided the tariffs of its services.

3. Policies of the Information Society

In the last quarter, the Ministry of Education and Science as well as some other institutions have undertaken some IS projects in providing networks, studying the state of IST in Albania, establishment of LAN-s in seven scientific institutions, establishment of an information center near the Academy of Science, etc.