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ICT market development in Lithuania: current status and future prospects Diana Korsakaitė Director of Strategy Department Communications Regulatory Authority 16 May, 2006, Vilnius 1p ICT Market Development: 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) Order of Director of the RRT Concerning the Approval of the Rules for Allocating and Using of Radio Frequencies / Channels Law on Electronic Signature Law on Radio Communications (no longer in force) … Law on Communications (no longer in force) 1995 “Television without Frontiers” Directive 89/552/EC (amended by Directive 97/36/EC on 30 June 1997) 1996 Law on Telecommunications (no longer in force) 1997 Directive 1999/93/EC on Electronic Signature 1998 1999 Strategy for the Assignment of Radio Frequencies to Broadcasting and Transmission of Radio and Television Broadcasts (Government Resolution) Law (revised) on Telecommunications (no longer in force) 2000 Directive 2000/31/EC on Electronic Commerce 2001 2002 2003 Order of Minister of Economy regarding the regulation of provision of some services of New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 2p ICT Market Development: 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 National Radio Frequency Allocation Table (Government Resolution) 2004 2005 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 Services of Information Society Law on Amendment of Republic of Lithuania Law on Provision of Information to the Public In the nearest future 3p ICT Market Development: General Outlook 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% 8.06% 4.40% 5.0% 3.80% 2.5% 0.10% 0.10% 0.70% 0.50% 0.0% Agriculture, forestry, hunting Fishery Mining and quarrying Electricity, gas and w ater supply ICT 2000 2004 4p ICT Market Development: 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 5p ICT Market Development: General Outlook Electronic communication market is a fast developing sector, whose main driving forces are competition, general authorization regime and technological changes 17 14,53 12,75 11,65 13 13,62 9 8,09 10,91 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) 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 Source: Statistics Lithuania, RRT 6p ICT Market Development: General Outlook Investments Market Structure Electronic communications sector value and infrastructure investment dynamics in 2000-2005, LTL million 800 3000 737 700 2516 671 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 600 2029 2137 2000 500 400 2nd half of 2004 20,74 1st half of 2004 21,91 50,80 8,08 19,17 6,9 18,3 6,19 17,92 5,71 18,03 1500 387 310 300 2771000 273 51,67 200 500 100 0 Y 2005 Y 2004 Y 2003 Y 2002 Y 2001 Y 2000 0 Total revenues from electronic communications market Investment into the electronic communications infrastructure Source: RRT 24,21 2nd half of 2003 50,50 26,66 1st half of 2003 0% 20% Fixed telephone communication Leased lines Audiovisual services Data transmission 48,23 40% 60% 80% 100% Mobile telephone communication Internet access Netw orks interconnection Source: RRT 7p Mobile Communications Segment: a Success Story "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 138.53% Lithuania 175 153,4 Mobile communication revenues in 2002-2005, mln.LT 700 610 600 150 131.95% Luxembourg Mobile communication penetration growth in Lithuania in 2002-2005, % 119,2 Bahrein 116.49% Macau 116.39% 100% 25 127,7 103,1 28,5 2003, 2H 2004, 1H 2004, 2H 2005, 1H 475 300 200 100 0 2001, 2002, 2003, 2003, 2004, 2004, 2005, 2005, 2H 2H 1H 2H 1H 2H 1H 2H 112.26% 110% 56,0 75,0 117.16% 50 47,6 54,1 125.12% Italy Hong Kong 75 528 566 400 79,9 63,0 61,0 127.80% Israel 500 99,9 100 128.04% Netherlands Cyprus 125 89,2 131.10% Barbados 527 559 120% 130% Source: Informa Telecoms & Media. 140% 0 2003, 1H 2005, 2H Penetration against the active subscribers Penetration against all the subscribers Source: RRT Source: RRT 8p Mobile Communications Segment: a Success Story … 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 3G GSM 900 Omnitel MMDS Tele2 DCS 1800 MMDS 3G HDTV trial 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 MMS services Mobile internet EGDE services Mobile internet Live TV broadca sting Live TV broadca sting 9p Mobile Communications Segment: a Success Story … having a clear tendency of going mobile … 3. Data is going mobile 1. Users are going mobile 140 100% 120 80% 100 Other LL Fiber optic 80 60 40 20 0 2000 01 01 2001 01 01 2002 01 01 2003 01 01 2004 01 01 Mobile telephony penetration 2005 01 01 2005 07 01 60% WLA LAN CaTV 40% xDSL Dial - up 20% Mobile Fixed telephony penetration 2. Voice is going mobile 0% 2003 07 01 2004 07 01 2005 01 01 2005 07 01 200000 1200 175000 1000 150000 Other 800 LL 125000 Fiber optic 600 100000 400 75000 200 50000 WLA LAN CaTV 0 2003 I-II Q xDSL 25000 2003 III-IV Q 2004 I Q 2004 II Q Fixed 2004 III Q Mobile 2004 IV Q 2005 I Q 2005 II Q 10 p 0 2003 07- 2004 01- 2004 04- 2004 07- 2004 10- 2005 01- 2005 04- 2005 0701 01 01 01 01 01 01 01 Mobile Communications Segment: a Success Story 4. Media is going mobile 11 p Mobile Communications Segment: a Success Story Let’s sum up Mobile market indicators 2004 in comparison to 2003 2,6 8,52 57,68 31,99 54,68 18,4 6,8 times % % % % times times ARPU # of mobile Mobile operators business and services revenues, providers LTL (from 3 to 8) # of mobile subscribers Initiated traffic, min. SMS, units MMS, units # of GPRS subscribers 32% 12 p Mobile Communications Segment: a 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 networks 3G 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. 13 p Fixed Communication Segment: In Search for New Opportunities • The number of fixed telephone subscribers is reducing • The subscribers’ structure remains sufficiently stable – residential users form more than 90 % Fixed telephone communication Fixed telephone communication penetration dynamics in 2001–2005, % market revenue dynamics, 1998-2005, LTL thousand 70% 56,9% 57,3% 56,0% 54,7% 53,9% 54,0% Market share of new entrants, 2004-2005, % 800 6% 50% 200 27,0% 23,9% 23,9% T he EU-25 T he EU-15 T he EU-10 Lithuania 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 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 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 Source: RRT Oct-05 Sources: ANACOM, ITU, Regulatel, RRT. 14 p Fixed Communication Segment: In Search for New Opportunities 2003 1996 1998 1998 1999 1999 2000 ISDN Internet dialup Centrex 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 Since 1896 15 p Internet Access Segment as a Step Into Broadband Internet access market is one of the fastest growing sectors and is attractive for business in a long term perspective Internet access service providers market shares according to the revenue in 2003-2005, per cent Internet penetration dynamics in 2003-2005, % Active market entities, 2005 40 30 31,7 100% 80% 140 2003 2004 2005 115 120 20 60% 98 18,6 100 40% 14,9 10 80 7,9 2,7 60 4,7 20% 60 0 40 1st half of 2003 2nd half of 2003 1st half 2nd half of 2004 of 2004 1st half of 2005 2nd half of 2005 Penetration per 100 inhabitants 40 18 0% 24 20 8 10 10 1st half 2nd 1st half 2nd 1st half 2nd of half of of half of of half of 2003 2003 2004 2004 2005 2005 111515 0 Fiksuotas ryšys Source: RRT Source: RRT Judrusis ryšys Skirtosios linijos Interneto prieiga Omnitel Bitė Lietuva Lietuvos Telekomas Others Source: RRT 16 p Internet Access Segment as a Step Into Broadband A significant part of Lithuanian territory is covered by EDGE networks UAB „Omnitel“ EDGE network, 2005 UAB „Bitė Lietuva“ EDGE network, 2005 Source: www.omnitel.lt Source: www.bite.lt 17 p Broadband Communications Segment: a New Star 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% Slovenia 5.00% 6.00% 3.75% 4.00% 2.00% 2.56% 1.11% Lithuania Czech Republic 1.94% 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 10 20 30 40 50 Source: World Broadband Statistics Q1 2005 // Point Topic Ltd., 2005. 18 p Broadband Communications Segment: a New Star 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 2005 Source: RRT 19 p Broadband Communications Segment: a New Star 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 Commission, Brussels, 2006. Source: RRT 20 p Audiovisual Communications Segment: Major Changes Ahead 1989 2001 2002 2003 Internet via cable modem First Cable TV network Since 1945 Terrestrial broadcasting network 2004 2004 Digital broadcasting Fixed IPtelephony Internet via broadcasting network Fixed telephony 21 p Audiovisual Communications Segment: Major Changes Ahead 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 22 p Audiovisual Communications Segment: Major Changes Ahead Envisaged coverage by digital TV (DVB-T) networks LRTC networks Lietuvos telekomas’ networks 23 p Instead 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 24 p Thank you [email protected] +370 5 210 5688 25 p Dažnių valdymas NELICENCIJUOJAMI DAŽNIAI LICENCIJUOJAMI DAŽNIAI HAPS 48.2 47.2 43.5 40.5 24.5 26.5 27.5 29.5 17.3 17.1 10.66 10.15 5.725 5.15 3.8 3.41 2.484 2.4 GHz 2,4-2,4835 RLAN plačiai panaudojami 17,1-17,3 RLAN praktiškai nenaudojama 3,41-3,6 aktyviai naudojami 24,5-26,5 panaudojama 78 % 3,6-3,8 rezervuota, 2006 bus parengta BFWA 27,5-29,5 panaudojama 43 % 5,15-5,725 RLAN pilnai neišnaudojamas 40,5-43,5 nenaudojama 10,15-10,66 panaudojama 75 % Vis dar galimas efektyvesnis radijo spektro panaudojimas. 26 p Dažnių valdymas 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. Rezervuota UMTS TDD 2200 2170 2110 2010 2025 1980 1900 1920 Reservuota palydovinio ryšio reikmėms 2690 Papildomi dažniai plėtrai Nuo 2012 m. bus skirtas IMT-2000 ir techniškai suderinamoms judriojo ryšio technologijoms 2500 Konkursai 2006 m. 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. 27 p