ESIS extension / Lithuania / Regulatory Developments / Update Memo 5

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

This document updates the updated master report of April, by outlining the new developments in the area of IS regulation in the last three months.

The report refers to the new programme for the IS development strategy in the next three years.

In addition, it describes the main changes in the area of Telecommunications and Internet, namely the introduction of new services.

Finally, it accounts for the establishment of a new National Regulatory Agency (NRA) until October 1st 2000.

In May 2000, the Department of Information and Informatics (Ministry of Public Administration Reforms and Local Authorities) prepared the "Lithuanian Information Society Development Strategy". The IS strategy was approved by the high level State Information Policy Advisory Commission. This Programme announced the strategic directions of the IS development in the next three years. In order to prepare plans for the realisation, and for the co-ordination of finances, the working group under Sunrise Committee was established. It is expected that the working group will present proposals to the Lithuanian Government in September 2000. One of the strategic directions of IS development is the computerisation of Lithuanian schools and the connection of schools to a single Educational Network until 2003.

Telecommunications is the fastest growing sector in Lithuania. The telecommunications market in 1999 represented about 550 MEURO. Between July 1998 – July 1999 direct foreign investments went up by 634%. The total investments at the end of 1999 increased 630 MEURO. Four mobile communications operators with more 330000 users are operating in Lithuania. About 80% of the companies and organisations are users of mobile communications.

The main direction of developments was the introduction of new services. In June, the mobile communication company Bite GSM (represents about 40% of the Lithuanian mobile communication market) started providing Internet services. The company plans to sell Internet services through companies - distributors.

The largest mobile communications company Omnitel (represents about 60% of the market) continues the activity of developing electronic banking services. Bank Snoras has signed an agreement with Omnitel for the offering of the new banking services iBankas, GSM-Bankas, Elkas, BIS. More information at http://www.snoras.com.

Both companies are developing WAP technology. 700 WAT telephone sets have already been sold in Lithuania this year. This technology allows the search of 5 of the Lithuanian WWW sites. Experts foresee that this year sales will exceed 10.000 WAP telephone sets.

The mobile Communications Company NetCom with the network Tele-2 (started in Vilnius area at the end of 1999), is trying to attract users with a simple price structure and free additional services such as charge free short messages, possibility to choose number and others. In 2000, Tele-2 plans to invest 30 MEURO in the establishment of infrastructures in other Lithuanian cities.

In June 2000, the Lithuanian Government sold 25% of the Lithuania Telekomas shares and presently owns only 10% of the Telekomas shares. There is no available information about the new shareholders of Lithuanian Telekomas. Lithuania Telekomas, owner of Comliet together with NMT - 450, has signed a 7,5 MEURO agreement with Nokia for providing the equipment needed to develop wireless infrastructure in rural areas. Comliet has now 9000 users and expects to increase the number of users up to 45000. Lithuania Telekomas expects to minimise waiting queues in areas where there are no fixed line infrastructure.

Internet has the second highest rate of growth in the sector. About 1,6% citizens have Internet access possibility at home. About 5,4% of citizens are accessing Internet from working places in companies. Five big Internet providers (20 more secondary) with separate links to Internet operate in Lithuania. Experts foresee 2-2,5 times growth of users in 2000.

The electronic commerce in Lithuania is in its initial phase. The background for E-commerce – Electronic Signature Law was approved by Lithuanian Government in May and was passed to Seimas. According to the estimation of the Department of Information and Informatics, the infrastructure for certification, amendments to existing laws and regulations will be ready in the middle of 2001. Lithuanian banks and mobile communication companies with GSM authorisation possibilities are starting e-business. A few companies with e-shopping sites are ready to enter this market in the near future.

The basic law governing the telecommunications in Lithuania is the Law on Telecommunications (http://www.lrs.lt) that came into force on August 1st 1998. The Department of Communications under the Ministry of Transport (http://www.transp.lt) was temporarily authorised by Government Decree to perform NRA functions prescribed in the Law until the NRA is established. Now, the National Regulatory Agency (NRA), on the base of the State Radio Frequency service (SRFS), is under establishment (Government Decree in May 2000). The head of State, the Lithuanian President, appoints the Director/Members of NRA for a 5-year period. NRA, an organisation independent from operators and Ministries, must be established until October 1st2000.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.