1 p ict market development in lithuania: current status and future prospects diana korsakaitė...

1 p

ICT market development in Lithuania: ICT market development in Lithuania: current status and future prospectscurrent status and future prospects

Diana KorsakaitėDirector of Strategy Department

Communications Regulatory Authority

16 May, 2006, Vilnius

2 p

… 1995 1996 1997 1998 1999 2000 2001 2002 2003

New regulatory framework in EU

Law on Radio Communications (no longer in force)

Law on Provision of Information to the Public

Law on the National Radio and Television

European Convention on Transfrontier Television

Conceptual Framework of the National Information Society Development of Lithuania (Government Resolution)

Strategy for the Assignment of Radio Frequencies to Broadcasting and Transmission of Radio and Television Broadcasts (Government Resolution)

Law on Legal Protection of Personal data

Law on Telecommunications (no longer in force)

Law on Electronic Signature

Control of the off-the-record information in computer networks of public usage and rules of distribution of limited public information (Government Resolution)

Order of Minister of Economy regarding the regulation of provision of some services of information society, especially of electronic commerce, in internal market

IICTCT Market Development: Market Development: Legal Aspects

Order of Director of the RRT Concerning the Approval of the Rules for Allocating and Using of Radio Frequencies / Channels

Law (revised) on Telecommunications (no longer in force)

Strategic Plan of the Development of Information Society in Lithuania (Government Resolution)

Directive 1999/93/EC on Electronic Signature

Law on Communications (no longer in force)

“Television without Frontiers” Directive 89/552/EC (amended by Directive 97/36/EC on 30 June 1997)

Directive 2000/31/EC on Electronic Commerce

3 p

IICTCT Market Development: Market Development: Legal AspectsLegal Aspects

Model of Implementation of Digital Television in Lithuania (Government Resolution)

2003 2004 2005

Law on Electronic Communications

Law concerning the ratification of the Convention on Electronic Crimes Order of Director of

RRT on Digital Terrestrial Television Development Plan

Strategy of the Development of Informational Society of Lithuania (Government Resolution)

National Radio Frequency Allocation Table (Government Resolution)

In the nearest future

Strategic Plan for the Assignment of Radio Frequencies to Broadcasting and Transmission of Radio and Television Broadcasts

Law on Services of Information Society

Order of Director of the RRT on Allocation of UMTS Frequencies / Channels

Law on Amendment of Republic of Lithuania Law on Provision of Information to the Public

Order of Director of the RRT Concerning the Approval of the Plan of Development of Radio Communications in 3,410 – 3,800 MHz Frequencies (Channels) Bandwith

4 p

Lithuanian context:

• ICT represents 8,72 % of Lithuanian GDP and approximates or even exceeds other traditionally important sectors

European context:

• ICT represents 6-8% of GDP in EU, but it determines

• EU productivity’s growth by 40% and

• EU GDP’s growth by 25 %.

0.10% 0.50%

4.40%

8.72%

0.70%0.10%

7.70%

3.80%

8.06%

5.80%

0.0%

2.5%

5.0%

7.5%

10.0%

Agriculture, forestry, hunting Fishery Mining and quarrying Electricity, gas and w atersupply

ICT

2000 2004

Trends are the same as in other EU Member States

IICTCT Market Development: Market Development: General OutlookGeneral Outlook

5 p


1 Jan 2003 - electronic market liberalization de jure

Leading operators’ market shares continue to decline and a steady growth of new market players’ market shares indicates decreased market power of the incumbent operators

Lithuania was one of the first EU countries to refuse the licensing system and to move to the general authorization system in the telecommunication sector

Fully implemented fixed and mobile number portability and carrier selection and pre-selection stimulates competition as well

Radio spectrum policy and effective management boosts successful development of wireless technologies

Low administrative charges have created preconditions for the lowest service prices on the retail market as ITU indicates

6 p

Electronic communication market is a fast developing sector, whose main driving forces are competition, general authorization regime and technological changes


Growth of Lithuania’s GDP and electronic communications sector (comparing with the corresponding time period of the previous year)

Source: Statistics Lithuania, RRT

Even though the prices of communication services have been falling down the growth of the sector is substantial

Electronic communications market’s share within Lithuania’s GDP structure in average amounted to 3,5 %.

Lithuania’s electronic communications market grew by 11.9 % in 2005 (comparing with 2004) and amounted 2.391 billion LTL in 2004*

* Revenues from data transmission, cable TV, MMDS, radio and TV transmission and cable radio are not included

8,09

11,6512,75

14,53

5,16 5,08

10,91

13,62

1

5

9

13

17

Ist half2004

II half 2004 I half 2005 II half 2005

GDP grow th, % Sector's grow th, %

7 p


Source: RRT

20292137

2516737

671

387

310273 277

0

100

200

300

400

500

600

700

800

Y 2

000

Y 2

001

Y 2

002

Y 2

003

Y 2

004

Y 2

005

0

500

1000

1500

2000

2500

3000

Total revenues from electronic communicationsmarketInvestment into the electronic communicationsinfrastructure

Electronic communications sector value and infrastructure investment dynamics in 2000-2005, LTL million

Investments Market StructureDistribution of 2003–2005 revenues according to the separate electronic communications sector markets, %

26,66

24,21

21,91

20,74

17,87

16,77

48,23

50,50

51,67

50,80

46,29

46,83

6,19

6,9

8,08

7,83

9,25

18,03

17,92

18,3

19,17

21,88

21,37

5,71

0% 20% 40% 60% 80% 100%

1st half of 2003

2nd half of 2003

1st half of 2004

2nd half of 2004

1st half of 2005

2nd half of 2005

Fixed telephone communication Mobile telephone communicationLeased lines Internet accessAudiovisual services Netw orks interconnectionData transmission

Source: RRT

8 p

Mobile Communications Segment: Mobile Communications Segment: a Success Storya Success Story

Source: RRT

"The direct economic contribution of industries using the radio spectrum is already considerable, between 1 and 2% of national GDP in the EU,…" said Viviane Reding, DG InfSo.

In 2004-2005 growth of mobile communications penetration of in Lithuania was the fastest among all the EU Member States

Penetration of mobile communication was the highest in the world in December 2005

54,1 75

,0

61,0 89

,2

103,

1

127,

7

28,5

47,656,0

63,0

79,9

99,9

119,2

153,4

0

25

50

75

100

125

150

175

2001,2 H

2002,2 H

2003,1 H

2003,2 H

2004,1 H

2004,2 H

2005,1 H

2005,2 H

Penetration against the active subscribersPenetration against all the subscribers

Mobile communication penetration growth in Lithuania in 2002-2005, %

112.26%

116.39%

116.49%

117.16%

125.12%

127.80%

128.04%

131.10%

131.95%

138.53%

100% 110% 120% 130% 140%

Hong Kong

Macau

Bahrein

Italy

Cyprus

Israel

Netherlands

Barbados

Luxembourg

Lithuania

Countries with highest penetration rates in the world as of December of 2005

Source: Informa Telecoms & Media.

Mobile communication revenues in 2002-2005, mln.LT

610566559528527

475

0

100

200

300

400

500

600

700

2003,

1 H

2003,

2 H

2004,

1 H

2004,

2 H

2005,

1 H

2005,

2 H

Source: RRT

9 p

1994-10

GSM 900

Omnitel

Commercial GSM services

Omnitel

1995-03

1995-05

GSM 900

Bite GSM


Bite GSM

1995-101998-09

DCS 1800

Bite GSM

DCS 1800

Omnitel

DCS 1800

Tele2

GSM 900

Tele2

2001-01


Tele2

2000-05

GPRS services

2001-02

GPRS flat rate

2002-07

2005-09

Live TV broadca

sting

EDGE services

2003-12

Live TV broadca

sting

2005-09

EGDE services

2003-12

GPRS services

2001-10

Mobile internet

2005-03

GPRS flat rate

2002-10

MMS services

MMS services

2002-09

Mobile internet

2005-02

GPRS services

2004-07

TV via mobile

2005-04

3G trial

2004-10

3G

3G

3G

2006

NMT

MMDSFWA

MMDS

HDTV trial


… and all that is just 10 years’ story …

10 p0

200

400

600

800

1000

1200

2003 I-II Q 2003 III-IVQ

2004 I Q 2004 II Q 2004 III Q 2004 IV Q 2005 I Q 2005 II Q

Fixed Mobile


0

20

40

60

80

100

120

140

2000 0101

2001 0101

2002 0101

2003 0101

2004 0101

2005 0101

2005 0701

Mobile telephony penetration Fixed telephony penetration

2. Voice is going mobile

1. Users are going mobile

0%

20%

40%

60%

80%

100%

2003 07 01 2004 07 01 2005 01 01 2005 07 01

Other

LL

Fiber optic

WLA

LAN

CaTV

xDSL

Dial - up

Mobile

3. Data is going mobile… having a clear tendency of going mobile …

0

25000

50000

75000

100000

125000

150000

175000

200000

2003 07-01

2004 01-01

2004 04-01

2004 07-01

2004 10-01

2005 01-01

2005 04-01

2005 07-01

Other

LL

Fiber optic

WLA

LAN

CaTV

xDSL

11 p


4. Media is going mobile

12 p


Let’s sum up

2,6

times

32%

# of mobile operators

and services providers

(from 3 to 8)

Mobile business revenues,

LTL

# of mobile subscribers

Initiated traffic, min.

SMS, units

MMS, units

ARPU

Mobile market indicators 2004 in comparison to 2003

# of GPRS subscribers

8,52

%

57,68

%

18,4

times

6,8

times

31,99

%

54,68

%

13 p

Mobile Communications Segment: Mobile Communications Segment: a Success Story to be Continueda Success Story to be Continued

UMTS development:In beginning of 2006, UAB „Omnitel”, UAB „Bitė Lietuva” ir UAB „Tele2” were provided with a right to use radio frequencies in the UMTS bandwidth to build UMTS networks3G services are provided in the market since I quarter of 2006.

By now, 3G communication is provided in 8 cities and cover ~25 % of Lithuanian population;In 2007, 3G will be available to more than 50 % of Lithuanian population, and in 2008 – 75 %.

The new services being offered by 3G operators include high speed internet access, information services, news, video messaging or conversations, games and music downloads

Cheaper and smaller handsets for 3G available on the market are expected to be significant drivers of 3G take-up

Wireless broadband services in 3,5 GHz, 10 GHz, 26 GHZ, 28 GHz :Plan for development of 3,5 GHz was publicly consulted, and soon a relevant order will be issued;

In 2005, 2 operators had permissions to make activities in 3,5 GHz and 2 operators - in 10,5 GHz;4 operators had permissions to make activities in 26 GHz.

14 p

Fixed Communication Segment: Fixed Communication Segment: In Search for New OpportunitiesIn Search for New Opportunities

Source: RRT

• The number of fixed telephone subscribers is reducing

• The subscribers’ structure remains sufficiently stable – residential users form more than 90 %

Fixed telephone communication market revenue dynamics, 1998-2005, LTL thousand

443,

65

462,

60

809,

40

648,

00

619,

00 804,

70

658,

20

515,

30

0

200

400

600

800

1998* 1999* 2000* 2001* 2002* 2003 2004 2005

56,9% 57,3% 56,0% 54,7% 53,9% 54,0%

45,0%46,5%47,3%48,6%52,5%51,6%

32,0%35,4%

36,2%38,2%38,9%39,4%

23,5%23,9%23,9%27,0%

33,1%34,0%

10%

30%

50%

70%

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Oct-05

The EU-25 The EU-15

The EU-10 Lithuania

Sources: ANACOM, ITU, Regulatel, RRT.

Fixed telephone communication penetration dynamics in 2001–2005, %

Market share of new entrants, 2004-2005, %

3,84

%

4,63

%

5,02

%

5,65

%

5,50

%

6,25

%

6,31

%

6,45

%

0%

2%

4%

6%

2004, 1Q

2004, 2Q

2004, 3Q

2004, 4Q

2005, 1Q

2005, 2Q

2005, 3Q

2005, 4Q

Source: RRT

15 p

2003 2005

Live reality broadcasting over IP – dedicated to

special projects

ATM

1998

Privatization

199919981996

Frame Relay Internet dial-up

“Takas”

ISDN

Centrex

1999

xDSL

2001

MPLS VPN over IP

2002 2003

WLAN

2005

DVBT broadcasting:

license

2000

PSTN network

Since 1896

Fixed Communication Segment: Fixed Communication Segment: In Search for New OpportunitiesIn Search for New Opportunities

16 p

Internet Access Segment Internet Access Segment as a Step Into Broadbandas a Step Into Broadband

Source: RRT

Internet access market is one of the fastest growing sectors and is attractive for business in a long term perspective

31,7

2,7 4,77,9

14,9

18,6

0

10

20

30

40

1st halfof 2003

2nd halfof 2003

1st halfof 2004

2nd halfof 2004

1st halfof 2005

2nd halfof 2005

Penetration per 100 inhabitants

Internet penetration dynamics in 2003-2005, %

0%

20%

40%

60%

80%

100%

1st halfof

2003

2ndhalf of2003

1st halfof

2004

2ndhalf of2004

1st halfof

2005

2ndhalf of2005

Omnitel Bitė Lietuva

Lietuvos Telekomas Others

Internet access service providers market shares according to the revenue in 2003-2005, per cent

Source: RRT

Active market entities, 2005

Source: RRT

188

24

10 15

98

40

10 15

115

60

11

0

20

40

60

80

100

120

140

Fiksuotas ryšys Judrusis ryšys Skirtosios linijos Interneto prieiga

2003 2004 2005

17 p

A significant part of Lithuanian territory is covered by EDGE networks

UAB „Omnitel“ EDGE network, 2005 Source: www.omnitel.lt

UAB „Bitė Lietuva“ EDGE network, 2005 Source: www.bite.lt

Internet Access Segment Internet Access Segment as a Step Into Broadbandas a Step Into Broadband

18 p

Broadband Communications Segment: Broadband Communications Segment: a New Stara New Star

Source: World Broadband Statistics Q1 2005 // Point Topic Ltd., 2005.

Each year the broadband communication penetration in Lithuania nearly doubles (during 2005 the number of broadband Internet access subscribers grew by 81.4 %)

Broadband communication penetration dynamics in 2003-2005, %

Source: RRT

6.90%

1.11%1.94%

2.56%

3.75%

5.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

1st halfof 2003

2nd halfof 2003

1st halfof 2004

2nd halfof 2004

1st halfof 2005

2nd halfof 2005

0 10 20 30 40 50

Turkey

Thailand

Poland

Czech Republic

Lithuania

Slovenia

Australia

Venezuela

New Zealand

Mexico

The ten world’s countries with fastest growing broadband penetration, as of 1st Q, 2005

19 p


Source: RRT

2004 2005

Broadband penetration, 144 kbps and more

At the end of 2005 the broadband communication, according to its provision feasibilities was available to the absolute majority of Lithuania’s residents and organizations.

20 p


Source: European Electronic Communications Regulation and Markets 2005 (11th Report), European Commission, Brussels, 2006.

Competition between technologies in Lithuania in the broadband communications market is the most intense in the whole EU

5756

5244434342

40383737

3535

3128

2423

1821

11

66

432

0 25 50 75 100

Lithuania

Czech Republic

Estonia

Austria

Portugal

Latvia

Malta

Netherlands

Belgium

Denmark

Slovenia

Sweden

Hungary

Poland

The UK

Ireland

Spain

Finland

Slovakia

Luxembourg

France

Italy

Cyprus

Germany

Greece

Other technologies xDSL

xDSL44,76%

LAN20,21% Cable TV

netw orks21,19%

Wireless communica

tion netw orks

7,66%Leased lines

0,61%

Other0,04%

Optical f ibre

cables5,53%

Distribution of subscribers against the broadband technologies in Lithuania 2005, %

Source: RRT

21 p

2004

Fixed IP-telephony

2004

Digital broadcasting

1989

First Cable TV network

2002

Internet via cable modem

2001

Internet via broadcasting

network

2003

Fixed telephony

Terrestrial broadcasting

networkSince 1945

Audiovisual Communications Segment: Audiovisual Communications Segment: Major Changes AheadMajor Changes Ahead

22 p


In 2003 first transmissions in DVB-T format started by LRTC;

In 2005, digital TV station broadcasted 5 TV programs in Vilnius;

In 2005, DVBT transmission licenses were distributed and two operators have commenced to develop digital TV infrastructure:

Before 2006 June 30, digital TV transmitters will be installed in Vilnius,

Before 2007 December 31, digital TV transmitters will be installed in five largest cities;

Before start-2009, at least one digital TV network will cover not less than 95% of the territory of Lithuania.

Starting from 2012 – a gradual switch-off of the analogue TV shall be commenced in Lithuania

23 p

Envisaged coverage by digital TV (DVB-T) networks

LRTC networks

Lietuvos telekomas’ networks


24 p

Instead of ConclusionsInstead of Conclusions

ICT sector in Lithuania if fully open;

ICT market trends:

Going to data

Going to wireless and mobile

Going to converged networks and services

Going to accessibility and affordability to everyone

ICT market prospects:

New technologies already on their way will make tremendous shifts in the established market structure

Liberal view with regard to experimental use of certain bands for demanding entities allow to check possibilities to use implement new technologies

Regulatory issues:

Alteration of the whole regulatory system to the changes in the sector

Apropos pro-/re- action to new threats in the electronic medium

Gradual introduction of spectrum trading

Wise management of radio resources: relevant spectrum ranges for new – more efficient – technologies to be ready timely without delay

25 p

Thank you

[email protected]+370 5 210 5688

26 p

NELICENCIJUOJAMI DAŽNIAI LICENCIJUOJAMI DAŽNIAI

GHz

17

.1

17

.3

43

.5

47

.2

24

.5

48

.2

26

.52

7.5

29

.52.4

2.4

84

3.4

1

HAPS

3.8

5.1

5

5.7

25

10

.15

10

.66

40

.5

2,4-2,4835 RLAN plačiai panaudojami

3,41-3,6 aktyviai naudojami

3,6-3,8 rezervuota, 2006 bus parengta BFWA

5,15-5,725 RLAN pilnai neišnaudojamas

10,15-10,66 panaudojama 75 %

17,1-17,3 RLAN praktiškai nenaudojama

24,5-26,5 panaudojama 78 %

27,5-29,5 panaudojama 43 %

40,5-43,5 nenaudojama

Vis dar galimas efektyvesnis radijo spektro panaudojimas.

Dažnių valdymas

27 p

Konkursai 2006 m.

Papildomi dažniai plėtrai

Rezervuota UMTS TDD

Reservuota palydovinio ryšio reikmėms

19

00

19

20

19

80

22

00

25

00

21

10

21

70

26

90

20

10

20

25

Nuo 2012 m. bus skirtas IMT-2000 ir

techniškai suderinamoms judriojo ryšio

technologijoms

Žemesnių dažnių spektro dalis vis dar išlieka užimta senesnių ir mažiau efektyvių technologijų. Tuo tarpu naujoms technologijoms prieinama tik aukštesnių dažnių sritis, kurios įsisavinimui reikalingi didesni ištekliai.

Į žymią radijo spektro dalį, įskaitant maždaug trečdalį žemiau 3 GHz esančio spektro, kuris geriausiai tinka antžeminėms ryšių sistemoms, teisės potencialiai gali tapti perleidžiamomis iki 2010 metų.

Dažnių valdymas

1 p ict market development in lithuania: current status and future prospects diana korsakaitė...

Documents

plan of development

radio communications

provision of information

transmission of radio

radio frequencies channelslaw

offtherecord information

decreased market power

lithuania law