LITHUANIA.
Information and communication
technology
Dr. Ričardas Budavičius
Deputy head of Frequency Management Division
Communications Regulatory Authority
of Republic of Lithuania
2007
Ričardas Budavičius
Korea agency for digital opportunity and promotion
1 psl
Lithuania
Lithuania – a country in northern Europe. Situated along
the south-eastern shore of the Baltic Sea.
Area – 65.200 km². Population - 3,575,439 (2007). Capital – Vilnius. Currency – Litas (LTL).
The Lithuanian landscape has been smoothed by glaciers. The highest areas are the
moraines in the western uplands and eastern highlands, none of which are taller than 300
metres above sea level, with the maximum elevation being at 294 meters. The terrain
features numerous lakes and wetlands; a mixed forest zone covers 30% of the country. The
climate lies between maritime and continental, with wet, moderate winters and summers.
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Economy
In 2003, prior to joining the European Union, Lithuania had the highest economic growth rate
amongst all candidate and member countries, reaching 8.8% in the third quarter. In 2004 —
7.3%; 2005 — 7.6%; 2006 — 7.4% growth in GDP reflected impressive economic
development. Most of the trade Lithuania conducts is within the European Union.
It is a member of the World Trade Organization, and the European Union. By UN
classification, Lithuania is a country with a high average income. The country boasts a well
developed modern infrastructure of railways, airports and four lane highways. It has almost
full employment, with an unemployment rate of only 2.9%. According to officially published
figures, EU membership fuelled a booming economy, increased outsourcing into the country,
and boosted the tourism sector.
Like other countries in the region (Estonia, Latvia) Lithuania also has a flat tax rate rather
than a progressive scheme. In 2006 income tax was reduced to 27% and a further reduction
to 24% is expected in October of 2007.
The minimum wage currently stands at 600 litas (€174). The average wage in 2005 was
1453LTL (€420).
Ričardas Budavičius
Korea agency for digital opportunity and promotion
3 psl
Information communication technology
• In the 2006 report on global development of ICT, each year prepared by
World Economic Forum, Lithuania ranked 39th among 122 countries (in 2005
Lithuania ranked 44th, in 2004 - ranked 43rd).
• The mobile communications segment in Lithuania’s ICT sector still remains
the most innovative. In February 2006, just upon awarding of the licenses,
provision of third generation mobile radio communications (UMTS) services was
commenced.
• June 2006 saw the arrival of high speed rate mobile Internet services by
using HSDPA data communication technology. Lithuania is among the first
countries, which applied the new technology commercially.
• Already for the third year in a row penetration of mobile communications in
Lithuania was the biggest among the European Union (EU) Member States.
Ričardas Budavičius
Korea agency for digital opportunity and promotion
4 psl
ICT: Legal Aspects
Law on Legal
Protection of
Personal data
Law
on
the
National Radio
and Television
Law
on
Provision of
Information to
the Public
Control of the off-the-record
information in computer networks
of public usage and rules of
distribution of limited public
information
(Government
Resolution)
Conceptual Framework of the
National Information Society
Development
of
Lithuania
(Government Resolution)
European
Convention on
Transfrontier
Television
Strategic Plan of
the Development of
Information Society
in Lithuania
(Government
Resolution)
Law on
Electronic
Signature
Law on Radio
Communications
(no longer in
force)
…
Law on
Communications (no
longer in force)
1995
“Television without
Frontiers” Directive
89/552/EC (amended by
Directive 97/36/EC on 30
June 1997)
Ričardas Budavičius
1996
Law on
Telecommunications (no
longer in force)
1997
Directive
1999/93/EC on
Electronic
Signature
1998
1999
Law (revised) on
Telecommunications (no
longer in force)
2000
Directive 2000/31/EC
on Electronic
Commerce
Strategy for the Assignment
of Radio Frequencies to
Broadcasting and
Transmission of Radio and
Television Broadcasts
(Government Resolution)
Order of Director of the RRT
Concerning the Approval of the
Rules for Allocating and Using
of
Radio
Frequencies
/
Channels
2001
2002
2003
Order of Minister of Economy
regarding the regulation of
provision of some services of New regulatory
information society, especially of framework in EU
electronic commerce, in internal
market
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ICT: Legal Aspects
Order of Director of the RRT on
Allocation of UMTS Frequencies /
Channels
Law concerning
the ratification of
the
Convention
Model of
Order of Director of
on
Electronic
Implementation of
RRT
on
Digital
Crimes
Terrestrial
Television
Strategy of the
Digital Television in
Development of Development Plan
Lithuania (Government
Informational
Resolution)
Society of Lithuania
(Government
Law on Electronic
Resolution)
Communications
Strategic Plan for the
Assignment of Radio
Frequencies to Broadcasting
and Transmission of Radio
and Television Broadcasts
2003
Ričardas Budavičius
Law on Services
of Information
Society
National Radio
Frequency Allocation
Table (Government
Resolution)
2004
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
Law on Amendment of
Republic of Lithuania Law
on Provision of
Information to the Public
2005
2006
Korea agency for digital opportunity and promotion
In the nearest
future
6 psl
ICT Market Development
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 %.
Lithuanian context:
• ICT represents 8,72 % of Lithuanian GDP and approximates or even
exceeds other traditionally important sectors
10.0%
8.72%
Trends are the same
as in other EU
Member States
7.70%
7.5%
5.80%
5.0%
8.06%
3.80%
4.40%
2.5%
0.10% 0.10%
0.70% 0.50%
0.0%
forestry, hunting
RičardasAgriculture,
Budavičius
Fishery
Mining and quarrying
Electricity, gas and w ater
Korea agency
for digital opportunity
and promotion
supply
ICT
2000
2004
7 psl
ICT. General outlook
 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
Ričardas Budavičius
Korea agency for digital opportunity and promotion
8 psl
ICT. General outlook
Electronic communication market is a fast developing sector, whose
main driving forces are competition, general authorization regime and
technological changes
17
12,75
11,65
13
9
 Even though the prices of
communication services have been falling
down the growth of the sector is
substantial
14,53
13,62
8,09
10,91
 Electronic communications market’s
share within Lithuania’s GDP structure in
average amounted to 3,5 %.
5
5,16
5,08
Ist half
2004
II half 2004
1
I half 2005 II half 2005
GDP grow th, %
Sector's grow th, %
Growth of Lithuania’s GDP and electronic
communications sector (comparing with the
corresponding time period of the previous
year)
 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
Source: Statistics Lithuania, RRT
Ričardas Budavičius
Korea agency for digital opportunity and promotion
9 psl
ICT. General outlook
Investments
Market Structure
Electronic communications sector value
and infrastructure investment dynamics
in 2000-2005, LTL million
800
3000
737
700
2516
671
600
2029
Distribution of 2003–2005 revenues
according to the separate electronic
communications sector markets, %
2nd half of 2005
16,77
46,83
9,25
21,37
1st half of 2005
17,87
46,29
7,83
21,88
2500
2137
2000
500
400
1500
387
310
300
2771000
273
2nd half of 2004
20,74
1st half of 2004
21,91
50,80
51,67
8,08
19,17
6,9
18,3
6,19
17,92
5,71
18,03
200
500
100
Y 2005
Y 2004
Y 2003
Y 2002
Y 2001
0
Y 2000
0
Total revenues from electronic communications
market
Investment into the electronic communications
infrastructure
Source: RRT
Ričardas Budavičius
24,21
2nd half of 2003
50,50
26,66
1st half of 2003
0%
20%
48,23
40%
Fixed telephone communication
Leased lines
Audiovisual services
Data transmission
60%
80%
100%
Mobile telephone communication
Internet access
Netw orks interconnection
Source: RRT
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Mobile Communications
"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
Countries with highest penetration rates
in the world as of December of 2005
25
Bahrein
116.49%
0
Macau
116.39%
Hong Kong
100%
127.7
103.1
89.2
2001, 2002, 2003, 2003, 2004, 2004, 2005, 2005,
2H
2H
1H
2H
1H
2H
1H
2H
112.26%
110%
75.0
117.16%
28.5
63.0
61.0
Italy
56.0
54.1
50
125.12%
47.6
120%
130%
Source: Informa Telecoms & Media.
Ričardas Budavičius
140%
Penetration against the active subscribers
Penetration against all the subscribers
Source: RRT
527
528
2003,
2H
2004,
1H
559
566
2004,
2H
2005,
1H
610
475
400
79.9
75
127.80%
Israel
700
500
99.9
100
128.04%
Netherlands
Mobile communication revenues in
2002-2005, mln.LT
600
119.2
125
131.10%
Barbados
153.4
150
131.95%
Luxembourg
Cyprus
175
138.53%
Lithuania
Mobile communication penetration
growth in Lithuania in 2002-2005, %
300
200
100
0
2003,
1H
2005,
2H
Source: RRT
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Mobile Communications
… and all that is just 10 years’ story …
2004-10
1995-03
1995-10
2000-05
1998-09
1994-10 1995-05
2001-10
2002-10
2001-02
2002-09
2002-07
2001-01
2003-12
2005-09
2005-02
2005-09
2003-12
2005-03
2004-07
2005-04
2006
DCS 1800
NMT
3G trial
Bite GSM
DCS 1800
GSM 900
GSM 900
Omnitel
Bite GSM
GSM 900
Omnitel
DCS 1800
TV via
mobile
FWA
3G
GPRS
services
Tele2
Commercial
GSM services
Commercial
GSM services
Commercial
GSM services
Omnitel
Bite GSM
Tele2
GPRS
services
GPRS
flat rate
GPRS
services
EDGE
services
GPRS
flat rate
MMS
services
Ričardas Budavičius
3G
MMDS
Tele2
MMDS
3G,
HSPDA
HDTV trial
Mobile
internet
EGDE
services
MMS
services
Korea agency for digital opportunity and promotion
Mobile
internet
Live TV
broadca
sting
Live TV
broadca
sting
12 psl
Mobile Communications
… having a clear tendency of going mobile …
3. Data is going mobile
1. Users are going mobile
140
100%
120
80%
100
80
Other
60
LL
Fiber optic
40
WLA
20
LAN
CaTV
0
xDSL
Dial - up
2000 01 01 2001 01 01 2002 01 01 2003 01 01 2004 01 01 2005 01 01 2005 07 01
Mobile telephony penetration
1200
Fixed telephony penetration
60%
40%
20%
Mobile
0%
2003 07 01
2. Voice is going mobile
Other
2004 07 01
2005 01 01
2005 07 01
200000
175000
1000
LL
800
Fiber optic
600
WLA
150000
125000
100000
75000
400
LAN
200
CaTV
0
2003 I-II Q
2003 III-IV Q
2004 I Q
2004 II Q
Fixed
Ričardas Budavičius
2004 III Q
Mobile
2004 IV Q
2005 I Q
2005 II Q
xDSL
50000
25000
0
2003 07-01
2004 01-01
2004 04-01
Korea agency for digital opportunity and promotion
2004 07-01
2004 10-01
2005 01-01
2005 04-01
2005 07-01
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Mobile Communications
 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 networks
3G services are provided in the market since I quarter of 2006.
In 2006, 3G communication is provided in 11 cities and cover ~35 % of Lithuanian population;
Now, 3G 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 2006, 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.
Ričardas Budavičius
Korea agency for digital opportunity and promotion
14 psl
Fixed telephone communication
• The number of fixed telephone subscribers is reducing
• The subscribers’ structure remains sufficiently stable – residential users
form more than 90 %
Market share of new entrants,
Fixed telephone communication
Fixed telephone communication
penetration dynamics in 2001–2005, % market revenue dynamics, 1998-2005, 2004-2005, %
LTL thousand
70%
56,9%
57,3%
56,0%
54,7%
53,9%
54,0%
800
6%
50%
200
23,9%
23,9%
T he EU-25
T he EU-15
T he EU-10
Lithuania
Oct-05
Sources: ANACOM, ITU, Regulatel, RRT.
Ričardas Budavičius
6,45%
6,31%
6,25%
5,50%
5,65%
5,02%
0%
0
Jan-04 Jan-05
4,63%
23,5%
10%
Jan-01 Jan-02 Jan-03
2%
3,84%
32,0%
443,65
27,0%
35,4%
462,60
34,0% 33,1%
4%
515,30
400
36,2%
804,70
38,2%
45,0%
658,20
30%
38,9%
47,3% 46,5%
809,40
39,4%
600
48,6%
648,00
52,5%
619,00
51,6%
1998* 1999* 2000* 2001* 2002* 2003 2004 2005
Source: RRT
Korea agency for digital opportunity and promotion
2004, 1 2004, 2 2004, 3 2004, 4 2005, 1 2005, 2 2005, 3 2005, 4
Q
Q
Q
Q
Q
Q
Q
Q
Source: RRT
15 psl
Fixed communication
2003
1996
1998
1998
1999 1999
2000
ISDN
Internet dialup
Centrex
Ričardas Budavičius
2003
WLAN
2005
2005
DVBT
broadcasting:
license
MPLS VPN
over IP
“Takas”
PSTN network
2002
xDSL
Privatization
Frame Relay
2001
ATM
Live reality broadcasting
over IP – dedicated to
special projects
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16 psl
Internet access
Internet access market is one of the fastest growing sectors
and is attractive for business in a long term perspective
Internet penetration dynamics in
2003-2005, %
40
Internet access service providers
market shares according to the
revenue in 2003-2005, percent
Active market entities, 2005
140
2003
2004
100%
2005
115
120
30
80%
98
31,7
100
60%
20
80
18,6
60
10
40
7,9
2,7
40
4,7
18
0
1st half
of 2003
2nd half
of 2003
40%
60
14,9
1st half 2nd half
of 2004 of 2004
1st half
of 2005
2nd half
of 2005
Penetration per 100 inhabitants
Source: RRT
Ričardas Budavičius
24
20%
8 10 10
20
111515
0%
0
Fixed comm.
Source: RRT
Mobile comm.
Leased line
Internet access
1st half 2nd 1st half 2nd 1st half 2nd
of
half of
of
half of
of
half of
2003
2003 2004
2004 2005
2005
Omnitel
Bitė Lietuva
Lietuvos Telekomas
Others
Source: RRT
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17 psl
Internet access
A significant part of Lithuanian territory is covered by EDGE networks
Source: www.bite.lt
UAB „Omnitel“ EDGE network, 2007
Source: www.omnitel.lt
Ričardas Budavičius
Korea agency for digital opportunity and promotion
18 psl
Broadband communications
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, %
The ten world’s countries with fastest growing
broadband penetration, as of 1st Q, 2005
Mexico
New Zealand
Venezuela
10.00%
Australia
6.90%
8.00%
5.00%
6.00%
2.00%
Lithuania
3.75%
4.00%
1.11%
1.94%
Slovenia
Czech Republic
2.56%
Poland
Thailand
0.00%
1st half 2nd half 1st half 2nd half 1st half 2nd half
of 2003 of 2003 of 2004 of 2004 of 2005 of 2005
Turkey
0
Source: RRT
Ričardas Budavičius
10
20
30
40
50
Source: World Broadband Statistics Q1 2005 // Point
Topic Ltd., 2005.
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19 psl
Broadband communications
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.
Broadband penetration, 144 kbps and more
2004
2006
Source: RRT
Ričardas Budavičius
Korea agency for digital opportunity and promotion
20 psl
Broadband communications
Competition between technologies in Lithuania in the broadband
communications market is the most intense in the whole EU
Greece
Germany
Cyprus
Italy
France
Luxembourg
Slovakia
Finland
Spain
Ireland
The UK
Poland
Hungary
Sweden
Slovenia
Denmark
Belgium
Netherlands
Malta
Latvia
Portugal
Austria
Estonia
Czech Republic
Lithuania
2
3
4
6
6
11
Distribution of subscribers against the
broadband technologies in Lithuania 2005, %
18
21
23
24
28
31
35
35
37
37
38
40
42
43
43
44
LAN
20,21%
xDSL
44,76%
Other
Leased
0,04%
lines
0,61%
Cable TV
netw orks
21,19%
Optical
fibre
cables
5,53%
Wireless
communica
tion
netw orks
7,66%
52
56
57
0
25
50
Other technologies
75
100
xDSL
Source: European Electronic Communications
Regulation and Markets 2005 (11th Report),
European
RičardasCommission,
Budavičius Brussels, 2006.
Source: RRT
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21 psl
Digital broadcasting
 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
Ričardas Budavičius
Korea agency for digital opportunity and promotion
22 psl
Digital broadcasting
Envisaged coverage by digital TV (DVB-T) networks
LRTC networks
TEO LT networks
Ričardas Budavičius
Korea agency for digital opportunity and promotion
23 psl
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
Ričardas Budavičius
Korea agency for digital opportunity and promotion
24 psl
Thank you!
Ričardas Budavičius
Korea agency for digital opportunity and promotion
25 psl
Ričardas Budavičius
Korea agency for digital opportunity and promotion
26 psl
Ričardas Budavičius
Korea agency for digital opportunity and promotion
27 psl
Ričardas Budavičius
Korea agency for digital opportunity and promotion
28 psl