Download Omnitel - Infobalt

Emerging New Digital Valley on the Map
– Lithuania
Antanas Juozas Zabulis
Omnitel
President and CEO
Conference “Lithuania in the EU: The Values We Defend, the Changes We Pursue”
9 – 11 June, 2004
Vilnius City Hall
1
Executive summary
WHERE WE ARE
• Knowledge economy is named strategic priority for Lithuanian
economic development
• Political will, legal, social & business framework in place
• Unique and effective partnership among businesses & the state
• Booming ICT sector, growing exports of IT services and complex
solutions
• Yet lagging country’s e-readiness but improving very rapidly
CHANGES AND STRATEGY WE PURSUE
• to continue competitive growth
• to leverage knowledge economy potential
• to secure welfare of our people
2
Lithuanian ICT sector
Where do we stand now?
•
•
Fastest growing economy in Europe - GDP up by 9%
# 38 Global E-readiness ranking [Economist Intelligence Unit]
– Overall ranking 5.35 (the highest - Sweden 8,7; the lowest Azerbaijan - 2,37)
•
•
# 40 Growth Competitiveness index [World Economic Forum]
# 40 Business Competitiveness index [World Economic Forum]
Lithuanian e-readiness 2004
8
6
4
2
0
7.10
5.35
5.37
5.79
5.75
2.76
Overall
ranking
Connectivity
Business Consumer &
environment business
adoption
Legal &
policy
Ranking factors
3
6.75
Social &
Supporting
cultural
e-services
environment
Lithuanian ICT sector
Strong political will
• Knowledge economy –
TOP PRIORITY for country’s economic development
–
–
–
–
–
–
–
Lisbon Declaration
National Agreement signed on consensus basis by all political parties
Long term economic development strategy approved
Knowledge economy development strategy
Lithuanian Science & Technology White Book
E-business concept
E-Government concept
• Strategic goals by 2015 ICT sector sales of products & services will comprise
– 25% of GDP
» Share of ITC services from 6.1% in 2003 to 17.5% in 2015
» Share of ITC products from 1.4% to 7.7%
– 50% of total exports
4
Lithuanian ICT sector
Effective governing framework
Self-governance &
PPP initiatives
Infobalt
association
Alliance
“Window to
the Future”
Knowledge
Economy
Forum
Public institutions &
authorities
Knowledge
Society
Council
[President]
Information
society
development
committee
[Parlament]
Information society
development committee
under the
Government of Lithuania
National
Communications
Regulator
Ministry of
Internal Affairs
5
Information
society
development
commission
[Government]
Ministry of
Transportation
Ministry of
Economy
Ministry of
…
Lithuanian ICT sector
Safe & attractive business harbour
• Legal framework in compliance with EU
–
–
–
–
Law on Electronic signatures
Law on Copyright and Related Rights
Law on Personal data protection
Law on Electronic communications
• Attractive investment climate
–
–
–
–
–
–
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Active copyright agencies to protect intellectual property rights
Telecommunication market de-monopolized since 2003
Fastest growing economy with very low inflation
Investment incentives, clusters, free economic zones
Highly skilled and relatively inexpensive labour
Cultural & geographic proximity to the key markets
Lithuanian ICT sector
Growing R&D investments
• Joint efforts of business & state on Lisbon agenda:
– investment program for 3% of the state budget into R&D by 2008
– focus on investments to create the knowledge economy
• Total R&D comprised 100 mEUR in 2002 (0.69% of GDP)
Public sector investment towards knowledge economy, mEUR
60
42
46
45
EU funds
30
23,5
30
15
7,5
9,5
1999
2000
State budget
0
7
2001
2002
2003
2004
Lithuanian ICT sector
Growth of Mobile and E-banking
Mobile penetration
8
19
19
95
.
12
96 .
.
19 12.
97
1 9 .1 2 .
98
.
19 12.
99
2 0 .1 2 .
00
.
20 12.
01
2 0 .1 2 .
02
.
20 12.
03
2 0 .1 2 .
04
.1
2.
90,00%
80,00%
70,00%
60,00%
50,00%
40,00%
30,00%
20,00%
10,00%
0,00%
•
•
240% growth of mobile users during
2002-2003
200% growth of e-banking users
during last 18 months
Lithuanian ICT sector
Knowledge society potential
• Strong study and research infrastructure with
– 21 universities and colleges
» ~8,800 students
– incl. 1,950 in universities & 1,000 studying for MSc degree
» ~1,200 graduates per year
– 4.9% of total graduates in sciences, 20.7% of which – engineers (EU15: 14,6%; EU new members: 8.8%)
• Highly qualified and affordable IT specialists
» Over 15,000 employed in IT sector alone
» Average annual programmer’s salary – 12,000 EUR
(EU-15: ~ 60,000 EUR)
• Knowledgeable society
» 40-50% of population aged 30-50 years has higher education (EU15: 19-22%)
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Lithuanian ICT sector
Connectivity
• Modern telecom infrastructure
– 1Q 2004 mobile penetration of 72% per capita*
» estimated to reach 82% in 2004**
– fixed line penetration of 50.2% per households
• PC ownership
– 98.2% of companies with >250 employees, 84.4% of total
– 27.4% of households in large cities, 19.9% of total
• Internet penetration
–
–
–
–
95.5% of companies with >250 employees, 65.5% of total
99% of business have web pages
11.7% of connected households in large cities, 7.7% of total
27% of people use Internet at least semiannually, 26% monthly,
23% weekly
* NRA data
** Omnitel estimate
10
Source: Infobalt
Lithuanian ICT sector
Building Information Highway
• Today Lithuania has most advanced fixed and mobile
infrastructure in the Baltic States.
• Investments into Lithuanian Telecommunications Infrastructure
made by TeliaSonera majority owned companies Omnitel and
Lietuvos Telekomas:
~ 900 million Euros.
• Total investments made by all Lithuanian Telecommunication
Operators:
~ 1,2 billion Euros.
• To compare - total amount of all EU Structural funding planned in
a Single Programming Document for the next 3 years:
~ 792 million Euros.
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Source: Omnitel
Role of Omnitel
Bringing innovations to the Country
• First in Lithuanian to introduce GSM (1995)
• First commercial Internet provider (1995)
• One of the first in the world to introduce GPRS (2001), as well as
MMS, Bluetooth (2002)
• The first in the world to launch and operate Motorola’s latest base
stations Horizon II (2003)
• The 4th company in Europe and the 7th in the world to have
implemented on its network the latest GPRS technology CS3/CS4
(2003). GPRS data transfer rates are increased up to 70%
• GSM Association Worldwide Awards Nominee (2003, 2004)
• UMTS trial (2004)
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Role of Omnitel
Constant Innovation
•
•
•
•
•
•
•
•
•
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Omnitel portal www.omni.lt – the most popular multi-channel personalized portal
providing most convenient electronic communication tools, opportunities to manage GSM
services, information and electronic entertainment.
‘SIM plus’ card with particularly broad possibilities, enabling each subscriber to
personalize services received.
EXTRA ID - reusable pre-paid card, e-ticket and e-discounts.
Electronic Pre-paid top-up (via SMS, ATM, ID cards, Internet) reached 36% of total top-up
amount.
Omnitel introduced a project e-city with to transfer city communications to the electronic
environment.
Mobile parking in Vilnius and Kaunas.
Service of monitoring moving objects, using GPS satellite positioning system, and their
control.
Household information management system 'House' developed for monitoring, testing
and receiving information to the mobile phone on the status of household energy,
heating, water supply and other equipment.
Omnitel mobile data messaging exceeds Eastern Europe average by more than 200%
and Western Europe average by 30%
Source: Omnitel
Role of Omnitel
Growth of non–voice services
Omnitel non-voice revenue development
Voice revenues
ate
)
(es
tim
20
04
20
03
Non-voice revenues
20
02
20
01
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
14
Source: Omnitel
Key challenge
Internet Connectivity – how to break through?
Private & Public partnership - “Window to the future”
•
Knowledge Society Development Initiative was
initiated in 2002 by leading ITT companies and Banks
•
The Goal – to reach EU average Internet penetration
level in Lithuania (39% in 2002)
•
Now it is main Public/Private Knowledge Society
program with central and local Governments and
leading ITT Business acting together
•
More than 170 free Inter access points established
•
20 000 adults trained on Internet basics
•
Internet penetration growth from 10% up to 21% was
achieved only in three quarters!
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Key challenge
Internet Connectivity – how to break through?
Private & Public partnership - “Window to the future”
•
Expansion of the project using Budged and EU
Structural funds:
1000 Public Access Points to be Established
300 000 Adults trained
Free distance learning and e-services content on
Internet
•
Personal Income Tax Deduction when buying PC and
Internet to the households
•
According TNS Gallup Lithuania had the fastest
Internet penetration growth rate (25%) between EU
accession countries during 2002-2003 (for the same
period Estonia Internet penetration growth was 9,1%,
Latvia - 9,5%)
•
Unique model of effective Business and Governement
Partnership respected by experts and top official of World
Bank, EU Commission DG Information Society and
UNESCO
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Lithuanian ICT sector
Booming sector within booming economy
• Total ICT sector valued at ~1,237 mEUR
» 7.5% of the Lithuanian GDP
• Growth by 27-30% in 2002-2003
» GDP grew in 2003 by 9%
• Export of ICT services grew by 28.6% to 45 mEUR
» Total country’s exports grew by 9.1%
24%
50%
26%
Equipment, solutions & other
IT
Communications
Lithuanian ICT market 2003 est., mEUR
17
Source: Infobalt
Lithuanian ICT sector
Key players
• 10 out of 18 top Baltic IT companies are in Lithuania
• Top 10 companies increased their exports from 40% to
80% in 2003
Lithuanian telecommunication
company sales 2003 est., mEUR
Largest Lithuanian IT company sales 2003, mEUR
0
10
20
30
40
50
60
55
Sonex group
Informacines technologijos
58
Bite
(TDC)
19
Alna group
Tele2
Omnitel
(TeliaSonera)
109
8
223
16
Blue Bridge
5 Other
9
New Vision
Lietuvos
0
10
20
IT service revenues
18
30
40
Other revenues
50
60
Total sales
Telekomas
(TeliaSonera)
235
Source: Prime Investment, company
reports, Omnitel estimates,
Infobalt
Lithuanian ICT sector
Key IT exporters & their clients
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Lithuanian ICT sector
Lithuanian ICT sector success factors
•
•
Highly educated and skilled workforce
Adaptiveness
•
Northern Europe culture
•
European business ethics
•
Very quality conscious
•
Versatile in English, Russian, German and Polish
•
Low cost
•
Good understanding of eastern neighbors culture mentality(Russia,
Ukraine, Belarus)
Ability to employ IT workforce from Belarus, Russia and Ukraine
Investments into Quality assurance and project management
Strategic focus in competitive advantage areas
Proactive exploration of foreign markets
•
•
•
•
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What is next?
“Lithuania is one of the potential markets for transfer of
IT product development from Western countries”
Gartner
“Lithuania has the potential to become the “Sunrise
Valley of Europe” and to make its presence felt both in
Europe and in the global market.”
UNCTAD/WTO International trade center (World Trade Organization)
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THANK YOU!
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