October 1999

Lithuania Update Memo

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

1. Changes in Institutional structures in charges of the regulatory issues

The Lithuanian high level (inter-ministerial) State Information Policy Development Advisory Commission (formed by Government decree in March 1999) started activities. The head of the Commission is Vice-minister R.Gudauskas. Mr. R.Gudauskas is head of Department of Information and Informatics at Ministry of Public Administration Reforms and Local Authorities.

The Commission was formed at level of vice-ministers and main goals are:

• to prepare plans for development of IS, state modernisation by means using new information technologies and tools in all state activities areas;
• to co-ordinate inter-institutional projects;
• to co-ordinate and control and the adoption by Government the development of IS, and state modernisation;
• To inform the Government on realisation of state-important projects.

Other state institutions related to development of Information Society and Information Technologies are Data Protection Inspector, Register State Service, and Computer Certification Service.

Institute of Mathematics and Informatics, Association of Information Technology, Telecommunication and Office Equipment companies (INFOBALT), Open Society Fund, Lithuanian Computer Union are involved in activities of IS development too.

National Telecommunications Regulatory Agency is not established yet. All documents needed for establishment and operation are under consideration at Government level. Real activities of Agency are planed in 2000 only.

2. Changes in Public telecommunications operators

Lithuania Telekomas, according requirements of State Competition and Consumer Protection Office, sell 28,4% of Bite GSM Company. Bite GSM is one of three mobile communications operators. TeleDenmark (head Mr. Ole Jacob Thorsen) paid to Lithuania Telekomas 200 M Lt (~50 MEURO) and now possess 100% of Bite GSM shares. On the other hand, TeleDenmark sell 49% shares of Comliet (third mobile communications operator) for 13,4 M Lt (~3,3 M EURO) to Lithuania Telekomas. State Competition and Consumer Protection Office must confirm the last agreement. Now Lithuanian Telekomas possess 90% of Comliet and has plans to transform Comliet in a fixed communications network for rural area where now there is low penetration of phone lines.

3. Regulatory Framework

• The Law of Electronic Signature is prepared for presentation to approve in Lithuania Seimas (Parliament).
• New wording of Personal Data Protection Law in compliance with EU Directives is prepared for presentation too.
• The discussions in Seimas on Electronic Document Law are cancelled. The main problem is storage of Electronic Documents in State archives.

4. Changes in information technologies market

In September Hewlett Packard, one of world leaders, established HP legal entity in Lithuania, UAB Hewlett Packard. This establishment is evidence of HP strong commitment to Lithuania and other Baltic countries market.

Lithuania economy now is in stagnation, as result of continuing crisis in Russia. Lithuania Seimas (Parliament) and Government are considering to reduce 1999 state budget in 450 M Lt (~110 M EURO). According publications and expert’s opinion Telecommunications and Information Technologies market go down in 30%. Other tendency is the fast growing of services, consulting and projects works. Department of Statistics informed about 8 times increased project, consult and other services in IT market.

5. Information Society policy

Management and regulation functions of IS development today are delegated mostly to the Department of Information and Informatics of the Ministry of Public Administration Reforms and Local Authorities, and partially to the Department of Communications of Ministry of Transport and to the Ministry of Education and Science.

The draft of IS Development Program, prepared in 1998, according to the Government's decision now is under refinement. The new reading of the Program shall be prepared soon for presentation to Lithuania Seimas.

6. Ongoing developments

6.1. Institutional structures

Establishment of National Telecommunications Regulatory Agency is planed at the end of 1999. All documents related to Agency activities are under discussions at Government level.

6.2. New Laws

Law on Electronic Signature and new wording of Law on Personal Data Protection, harmonised with EU requirements are prepared for presentation to Lithuania Seimas.

New IS Development Program should be ready for approval in 1999 too.

6.3. Information Technology market

The Lithuania economy is now in a stagnation phase. The growth of GNP in 1999 is expected on 0,5/1% level, as reported by Ministry of Economy. Reducing of state 1999 budget near 10% had influenced on financing of all state supported Information Society and Information Technologies projects. The realisation of a lot of projects is doubtful The IT market go down on 30% (experts opinion).