July 2000

FYR Macedonia Update Memo

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

1. Introduction and Summary

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

The report resumes the procedure for the privatisation of "Makedonski Telekomunikacii AD" (Macedonian Telecom), and the potential impacts of that change in the regulation of close-related subjects - broadcasting and equal access rights policies.

2. Information Society Policy

2.1 Umbrella Policies and national IS strategy

After prolonged preparations for the establishment of the highest national IS authority - National Information Society Council, the issue seems to have received the highest political attention. The Macedonian president, Mr. Boris Trajkovski, on the opening of the Second CEENet/NATO Workshop on Network Management, has expressed his own commitments to assist in that matter, emphasising the importance of completing the work on the National IS strategy. For more details refer to the corresponding entry in ESIS II database, Promotional Activities, "Macedonian president, Mr. Boris Trajkovski on the importance of National IS Strategy"

2.2 Telecommunications and Internet

UNET, one of the leading Macedonian ISPs, has announced an offering of a hybrid - Terrestrial/Satellite Internet Dial-in Access service. The company which is using traditional terrestrial trunks of the national Telecom for international links, is now capable to loop back the incoming traffic through satellite links, thus offering a competitive speed for asymmetric traffic demands, typical for the public Internet access from the small-office and home-office users. Together with the subscription to the service, the company offers a "boxed solution", consisting of necessary hardware and installation support for PC users ( please see http://www.unet.com.mk)

2.3 Access for all

After the Government had resumed the activities for the privatisation of Macedonian Telecom, (refer to paragraph 4. Privatisation, foreign investment, mergers, acquisitions, call for tenders), the president of the Macedonian Broadcasting Council (http://www.srd.org.mk/), Mr.Lj.Jakimovski, warned that the Government should carefully reconsider what is going to fall into the privatisation packet. Of particular importance, according to him, are the new Terrestrial Satellite Centre and the Antenna Subsystems, which is now a property of the Macedonian Telecom. These facilities have been built completely from the internal budget of this public enterprise, but aside from being used for trunking telephone traffic to the rest of the world, they are of critical importance for the national radio and television broadcasting. Mr. Jakimovski said that there are no guarantees about how the future strategic investor in Macedonian Telecom will be interested in broadcasting business, which may have major impact on many aspects of the developing national broadcasting and the electronic media on the whole.

His final remarks were that prior to the formulation of the final offer for the public property of Macedonian Telecom, the Government and the other actors in media business should precisely formulate the regulation on equal-access rights to the media that heavily rely on national resources. Along that line, the Broadcasting Council is ready to suggest to the Government to take the broadcasting system out of the present structure of the "Makedonski Telekomunikacii AD", and to leave it to be managed by a newly established public enterprise "Makedonska radiodifuzija AD" ("Macedonian Radio-broadcasting"). Although this unofficial proposal became public, the Government has not yet responded officially.

3. Institutions and organisations in charge of IS regulation

3.1 Ministries

After the Prime Minister disclosed the plans for a major reconstruction of the Government, this issue is attracting a notable public interest. This is a case because there won't be only changes in the assignments, but the structure of the Government will change also. Particularly, there will be a reduction in the number of ministries due to some of the budgetary constraints posed by the arrangements with the foreign financial institutions.

It’s unofficially known that the Ministry of Science, Ministry of Education and Ministry of Culture will be merged in a single institution. Since the Ministry of Science is presently the national co-ordination point of IS issues within the public administration, it is to be expected that some reassignment and/or changes in the mission of the offices programme could happen.

4. Market: Privatisation, foreign investment, mergers, acquisitions, call for tenders,…

Along with the privatisation strategy in the telecom sector, the Macedonian Government and the Macedonian Ministry of Transport and Communications in conjunction with the Makedonski Telekomuniakcii AD (Macedonian Telecom), have prepared and issued a public international pre-qualification tender for the selling of 51% of the shares of this public enterprise.

In the preparations, the privatisation team has sent an information notice to 14 ministries of transport and communications and 22 foreign telecom operators. The bidding process is presently in the phase of the evaluation of the bids. Due to the business-sensitive character of the procedure, no official detailed information has been given.

After the session of the opening of the bids, only a short information became public: that, from the procedural point of view, it was a successful tender.

By the end of July, 2000 it is expected that the privatisation team - joint committee of experts from the Government and the operator, starts the negotiations with the short-listed bidders. The whole procedure is expected to end by the end of the Q1, 2001.

Presently, the public is waiting to see which model the Government (principal owner) will propose for the remaining 49% of the shares. According to the initial privatisation plan, the presently valid legislation and the inherited property structure of the Telecom, aside from the strategic investor, and the Government, the remaining property package should be offered to the Telecom employees and a minor part to the users of their services. The uncertainty, regarding how the final breakdown will look like, is due to the fact that the Government has increased the offered package of shares to the strategic investor from 33% , initially, to the 51% that was announced.