July 2000

Albania Update memo

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

1. Introduction

During the second quarter of 2000, there have been changes in terms of legislation and privatisation procedures. Albanian Mobile Communication Company changed its owner. AMC will no longer be a state monopoly, but a private company, which will be followed by other operators very soon.

The new law for telecommunications has been approved. It reflects the telecommunications policy approved last year. An essential aspect of developing the telecommunications policy is to orient it towards European Union policies, procedures, and standards, as preparation for the entry into the EU.

The long-term goals of Albanian government regarding the telecommunications sector deal with a harmonised development of telecommunications infrastructure within the Republic of Albania, as well as its gradual extension throughout the country, in order to provide:

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

In order to achieve these goals, it is necessary to accelerate the rate of investment in telecommunications infrastructure; to focus suppliers’ services more on user’s required services, etc. The government should also consider global trends in the telecommunications sector, such as new technical and trade developments that are reducing telecommunications costs, satellite services that allow for the provision of services to the general public without the participation of national operators, and expanded internet access.

2. Telecommunications and Internet

The privatisation of AMC was finalised by open tender on May 15, 2000, which was won by Cosmote - Telenor (a Greek -Norwegian consortium). The Cosmote - Telenor had 85% of shares of AMC company, with a value of USD 85 million. The privatisation efforts will create possibilities for increasing the number of mobile subscribers and opportunities for licensing the next private operator.

Currently under preparation are the necessary procedures for contract assignment between the consortium and the Ministry of Public Economy and Privatisation. The procedures are expected to be completed by the next few weeks. According to the regulation, the contract assignment should be made no later than July 30, 2000. Until that time, AMC is continuing to operate as a public, anonymous company.

Parliament approved on June 16, 2000 the new law on telecommunications, which is going to become in effect 15 days after publication on the Government Newspaper. The new law will provide more space for the telecommunications development.

On June 2000 TRE licensed the national ISP—Cybernet. Cybernet will increase the number of people having access to information via e-mail and internet.

3. International relationships and agreements

On June 8, 2000, Albtelecom signed a cooperation agreement with Siemens Company to implement investments in telecommunications infrastructure in Albania.