COMMUNICATION REGULATORY LITHUANIAN COMMUNICATIONS AUTHORITY OF THE REPUBLIC OF SECTOR 2011 LITHUANIA
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Lithuanian Communications Sector 2011
CONTENTS
FOREWORD BY THE MINISTER OF TRANSPORT AND COMMUNICATIONS OF THE REPUBLIC OF LITHUANIA ...... 3 FOREWORD BY THE DIRECTOR OF THE COMMUNICATIONS REGULATORY AUTHORITY OF THE REPUBLIC OF LITHUANIA ...... 5 I. ELECTRONIC COMMUNICATIONS MARKET ...... 7 1. Overview of the Electronic Communications Sector ...... 7 1.1. General Trends ...... 7 1.2. Social and Economic Factors ...... 15 2. Telephone Communication ...... 25 2.1. Voice Services ...... 25 2.2. SMS and MMS ...... 38 2.3. Networks Interconnection ...... 41 3. Internet Access and other Data Transmission Services ...... 49 3.1. Internet Access Services ...... 49 3.2. Other Data Transmission Services ...... 61 3.3. Wholesale Access ...... 62 4. Television and Radio ...... 68 4.1. Television Services ...... 68 4.2. Television and Radio Programs Transmission Services ...... 78 5. Leased Lines ...... 84 II. Postal and Courier Services Market...... 88
2 Lithuanian Communications Sector 2011
FOREWORD BY THE MINISTER OF TRANSPORT AND COMMUNICATIONS OF THE REPUBLIC OF LITHUANIA
Information and communication technologies (ICT) have become an integral part of today’s life to most of us. Public institutions utilize the ICT for the development of their activities and employ new ways of communication and provision of services to people and business. Business enterprises integrate the ICT into their production and trade processes, since they are indispensable for successful activities. Residents use the ICT for communication, entertainment, working and education. The ICT are especially actively used by young people. The successful use of the possibilities, provided by the ICT, opens increasingly broader possibilities for development of the economy and the society. Therefore we are glad to note Lithuania’s achievements in certain areas of development of the broadband Internet. Lithuania has retained its leading positions in Europe as regards the development of the fibre Internet network and is still ahead of the household fibre markets of such countries as Sweden and Norway. According to the data of FTTH Council Europe, the fibre communication penetration in Lithuania reached 28.3 per cent in 2011. Lithuania, where the average data download rate is 1462 kb per second, takes the fourth spot in the world according to the said indicator and bypasses such countries as Japan and Sweden, which are famous with their especially modern data communication infrastructures. The implementation of the “Rural Area Information Technology Broadband Network (RAIN)“ (RAIN- 2) project has a particularly significant influence on the development of broadband communication in the country. In 2013, following the implementation of the project, 98 per cent of the country’s rural residents and public sector’s institutions will have the possibility to use broadband communication services. The broadband network construction works are rapidly implemented throughout the country. Nearly 2700 km of fibre cable lines were laid in 2011, which amounts to approximately 60 per cent of all the planned works. During the implementation of the RAIN-2 project 770 settlements will be connected to the broadband network, 417 were already connected at the end of 2011. A well-developed basic broadband Internet communication infrastructure will create the preconditions for the households, business enterprises and public sector’s institutions, existing in remote areas, to use high speed rate Internet and so ensure an even development of the Internet market. However, it is important not only to ensure a well-developed broadband infrastructure, but also to encourage the residents to use the digital technologies and reduce the digital divide in certain social groups. The role of the state is to help the people, who, due to one or another reason, still do not use the ICT, to become skillful, courageous and responsible users of the ICT in all the areas of their activities and interests – from communicating with friends to participation in decision making of the national importance. Another significant challenge, whose importance grows with the increase of use of the ICT, is the on- line safety and privacy, therefore it is important to develop appropriate legal and regulatory measures, which
3 Lithuanian Communications Sector 2011 would provide the residents and businesses with the possibility to use safe and reliable information resources and safely operate in the digital space. Lithuania is a country, able not only to create modern technological solutions for the needs of local residents and businesses, but also to export them to foreign markets. Lithuanian experts implement IT projects in Azerbaijan, Kazakhstan, Russia and other markets. It is vitally important to retain the continuity of the said trends. In doing so it is necessary to ensure the supply of qualified ICT specialists, therefore it is important to promote the ICT professions among young people, develop corresponding extra-curricular activities and encourage more young people to take interest in exact sciences and related professions. By ensuring the conditions, favorable to the ICT sector, we will create the conditions for the development of an economy, creating a big added value.
The Minister of Transport and Communications Eligijus Masiulis
4 FOREWORD BY THE DIRECTOR OF THE COMMUNICATIONS REGULATORY AUTHORITY OF THE REPUBLIC OF LITHUANIA
No one would doubt today that technological progress is the driving force behind the entire economy, encouraging the speed of development of the entire country. Communications sector commands global attention due to its susceptibility to innovation, continuous progress and importance in the life of the society. In 2011 Lithuanian communications sector saw a staggering rate of growth. Continuous investment of market players into the electronic communications infrastructure grew by as much as 12.2 per cent. Trends observed in the electronic communications sector during several years show that broadband services have strengthened their position as a priority branch of the sector. The market players’ focused investments into the next generation of fibre networks resulted in the growth of both residents’ and business segments’ needs for high quality broadband services. In 2011 the most popular Internet access services’ speed rate was higher than 10 Mbps and almost 10 per cent of consumers used the Internet of the speed, higher than 100 Mbps. In terms of development of broadband communications, Lithuania remains at the center of world’s attention, i. e. the country not only ranks first in Europe and sixth in the world in terms of fibre penetration, but also is the first in terms of the quality parameters of broadband services: according to the data of Net Index, at the end of 2011 Vilnius city ranked first in the world in terms of the average data download speed rate, Kaunas was the fourth in terms of the said indicator. Due to the increasing competition the prices of voice services continued to reduce, which resulted in the growth of their use. The fixed and mobile communications convergence processes are not a novelty in the electronic communications sector. However, each year one may observe that a clear line between the fixed and mobile telephone communication services is disappearing. Significant changes on the television services market are about to occur. On 29 October, 2012 the analogue terrestrial broadcasting of television programs will be completely replaced by digital broadcasting. The television subscribers, who prepare for the aforementioned market changes, frequently choose pay-TV services, thus the number of subscribers of pay-TV services has increased. Similarly to the entire electronic communications market, the trend of consumers’ choice being determined not only by the price, but also by the quality of the services, has been becoming a more prominent on the television services market. In 2011 more than half of pay-TV service users chose digital television. The decisions, made by RRT, had regulatory effects on the development of the Lithuanian electronic communications sector. The regulation of networks interconnection services encouraged competition on the
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Lithuanian Communications Sector 2011 retail markets, due to which the consumers were provided with high quality voice and other electronic communications services at especially low prices. In addition, for the purpose of improving conditions for the business to develop broadband networks, RRT has been actively cooperating with the municipalities of the country’s cities and towns, which provided the electronic communications operators with the possibilities to conveniently use the information about the location of communications cable ducts on the territory of the Republic of Lithuania, which is especially important for the development of electronic communications networks. Such provision of electronic access contributes to encouraging of long-term investment into the development of electronic communications. When preparing for the liberalization of the postal market, which will take place in 2013, Lithuanian providers of postal and courier services applied new marketing and pricing strategies in order to strengthen their competitive position in the market. The providers of postal and courier services dedicated significant attention to the reduction of service tariffs and provision of new services to the users. For the convenience of customers the postal items self-servicing terminals were installed, which created the possibility to send and receive postal items more quickly and conveniently. In addition, the methods of payment for the services were simplified, which, in turn, resulted in the increase of the flows of both domestic and international courier services and the market revenues grew by as much as 23 per cent. Due to the said reasons, the year 2011 was especially successful both for the providers and consumers of services on Lithuania’s postal and courier services market. The trends on the electronic communications sector, observed during recent years, give reasons to believe that such priority areas, related with the expectations of the nearest future, as the Internet access and television services markets are going to become stronger. As showed by the last year, the consciousness of the society, the responsibility of the business and efficient cooperation between the public and private sectors brought about positive results. Therefore one can hope that in the nearest future we will reach an especially high level of the information society, development of the communications sector and sustainable growth of the entire country’s economy.
Director Feliksas Dobrovolskis
6 I. ELECTRONIC COMMUNICATIONS MARKET
1. Overview of the Electronic Communications Sector
1.1. General Trends
Brief overview of the electronic communications sector. As in 2010, in 2011 a trend of reduction of revenues of the electronic communications sector remained on the electronic communications market – the total revenues of the sector reduced by 7 per cent. However, compared to 2010, the rate of reduction of the electronic communications revenues slowed down by 3.7 percentage points (during 2010 the total revenues of the sector reduced by 10.7 per cent). During the same time period Lithuania’s gross domestic product (GDP) grew by 5.9 per cent, and the share of electronic communications revenues amounted to 2.3 per cent of the entire GDP (see Figure 1).
11.9 % 10.3 % 7.1 % 5.3 % 5.1 % 9.8 % 5.9 % 7.3 % 7.8 % 7.8 % 1.3 % 2.9 % -7.7 % -7 % -15.0 % -10.7 %
2004 2005 2006 2007 2008 2009 2010 2011
Change of the GDP Change of the sector
Figure 1. The change of Lithuania's GDP and electronic communications sector (compared to the corresponding period of the previous year), 2004-2011, per cent Source: RRT, Statistics Lithuania
During the time period of the last four years, in 2011 the electronic communications market participants made the largest investments into the electronic communications network infrastructure. Compared to 2010, the investments grew by 12.2 per cent (see Figure 2). Although in terms of revenues, in 2009-2011 the electronic communications market reduced, the electronic communications operators’ investments into the electronic communications network infrastructure grew, which resulted in the growth of the percentage relation between the investment and revenues – in 2011 the investments amounted to 15 per cent of revenues, in 2010 the indicator reached 12.5 per cent. Most investments were targeted at fibre communication networks, mobile communication 3G, 3.5G and 4G networks, broadband Worldwide Interoperability Microwave Access (WIMAX) networks and development of public mobile communication network infrastructure, used for provision of data communication services.
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Lithuanian Communications Sector 2011
3500 671.0 700 3000 600 461.0 2500 387.0 375.1 500 350.2 320.7 360.0 2000 273 276.8 299.4 400 310.0 1500 300 1000 200 500 2 028.6 2 136.8 2 515.6 2 696.2 2 974.5 3 124.5 2 883.6 2 573.9 2 394.4 100 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total revenues of the electronic communications market Investment into the electronic communications network infrastructure Figure 2. The dynamics of the revenues of the electronic communications sector and the investment into the electronic communications infrastructure in 2001–2011, LTL million Source: RRT
Market structure. Overviewing the changes of the structure of the electronic communications market in terms of distribution of revenues, one can see that a trend of change has remained in the structure of the electronic communications sector already for several years (see Figure 3).
2011 11.3% 8.5 % 39.4 % 21.8 % 17.9 %
2010 11.8% 7.4 % 38.2 % 19.9 % 21.3 %
2009 12.3% 5.5 % 39.1 % 18.1 % 23.5 %
2008 12.8% 3.8 % 43.6 % 15.2 % 23.4 %
2007 13.9% 3.3 % 46.6 % 12.6 % 22.7 %
2006 15.7% 3.3 % 45.9 % 11.6 % 22.5 %
2005 17.6% 3.3 % 46.8 % 10.1 % 21.1 %
Fixed telephone communication Leased lines Television and radio services Mobile telephone communication Internet access and other data transmission Networks interconnection
Figure 3. Distribution of the revenues of the electronic communications sector against the markets in 2005–2011, per cent Source: RRT
The trends of growth were retained by the Internet access and other data transmission market share, which, in the overall structure of the revenues of the electronic communications market grew by 1.9 percentage point during 2011 and by 11.7 percentage points since 2005. The total Internet access and other data transmission revenues grew by 1.6 per cent during 2011 and amounted to LTL 521.4 million (see Figure 4), including LTL 434.4 million of the revenues from provision of the Internet access services. The television and radio services market share also grew by 1.1 percentage points (by 5.2 percentage points since 2005), the total television and radio service revenues in 2011 were 7.2 per cent higher than in 2010. The growth of the television and radio services market during the later years most likely resulted from the increase of use of pay-TV and the approaching of 29 October, 2012, when the broadcasting of analogue terrestrial television will be abolished and the transition to the digital terrestrial television broadcasting will be completed. During the 2011 the public mobile telephone communications market share in the overall structure of the electronic communications market revenues also grew – by 1.2 percentage points, although the total revenues of the public mobile telephone communications market reduced by 4.1 per cent. The small reduction of the public mobile telephone communication revenues in 2011 resulted from the prices of calls, which dropped by more than one fourth. However such reduction of prices had a positive influence on the
8 Lithuanian Communications Sector 2011 volumes of use: the use of public mobile telephone communications services, measured by the duration of calls, grew by 6.3 per cent in 2011. The revenues of the public fixed telephone communications market reduced by 10.5 per cent in 2011 however in the overall revenues structure the share of public fixed telephone communications services did not change significantly during the year and, as in 2010, reduced by one half of a percentage point. The annual reduction of the revenues of the market resulted from the reduction of the number of subscribers and prices of services: in 2011 the prices of public fixed telephone communications services reduced by 10 per cent and the number of subscribers – by 5.2 per cent. The reduction of prices did not increase the volume of use however it determined the not so significant reduction: the use of public fixed telephone communication services, in terms of the duration of calls, reduced by 7.3 per cent during 2011. During 2011 the revenues, received from the networks interconnection activities, reduced the most – compared to 2010, the revenues reduced by 22.1 per cent and amounted to 17.9 per cent in the overall structure of the electronic communications market revenues, i. e. 3.4 percentage points less than in 2010. The main reason for reduction of the revenues from the networks interconnection activities is the reduction of the prices of the corresponding services as the result of the corresponding regulation by RRTi. The leased lines market, which, in 2011, reduced by 17.6 per cent, amounted to the smallest share in the overall structure of the electronic communications market revenues, i. e. to 1.1 per cent. The reduction of the revenues, which, in 2011, amounted to LTL 27.1 million, resulted from the reduced demand for analogue leased lines.
2011 270.9 203.1 944.0 521.4 427.9
2010 302.6 189.4 984.1 513.3 549.5
2009 354.9 158.9 1 126.4 522.2 676.8
2008 399.7 119.2 1 363.3 473.8 730.3
2007 412.7 98.6 1 387.3 375.4 673.8
2006 424.6 88.2 1 237.9 311.7 607.5
2005 443.6 84.3 1 176.5 253.4 531.6
Fixed telephone communication Leased lines Television and radio services Mobile telephone communication Internet access and other data transmission Networks interconnection Figure 4. The distribution of the electronic communication sector’s revenues against the markets in 2005-2011, LTL million Source: RRT
Market participants. As of the end of 2011 there were 150 market participants, engaged in different electronic communications activities on the electronic communications market, i. e. three less than in 2010 (153). The largest share (68.7 per cent) in the overall structure of the number of market participants is occupied by the providers of Internet access – at the end of 2011 the services were provided by 103 undertakings. The number of providers of television services and public fixed communications networks and/or public fixed telephone communication services correspondingly reached 50 and 52 undertakings in 2011 (see Figure 5).
i The regulated prices of network interconnection services are specified in the documents of the corresponding market studies at the website of RRT at the address http://rrt.lt/lt/verslui/konkurencijos-prieziura/apskaitos-ir-kainu-kontrole.html#Bendra_info
9 Lithuanian Communications Sector 2011
115 115 115 113 109 108 103
54 54 54 57 55 52 48 47 52 48 51 52 50 40
11 15 12 15 13 15 13 13 12 13 13 12 14 11
2005 2006 2007 2008 2009 2010 2011 Internet access and other data transmission Mobile communication Fixed communication Leased lines Television (pay-TV) Figure 5. The dynamics of the number of market participants in 2005–2010 Source: RRT
Competitive environment. In terms of revenues, received from provision of all the electronic communications services in 2011 only five undertakings occupied a market share, greater than 2 per cent (Lietuvos Radijos ir Televizijos Centras AB was among such entrenched market leaders as TEO LT, AB, Bitė Lietuva UAB, Omnitel UAB and Tele2 UAB). The total market share of all the remaining electronic communications market participants (145 undertakings) amounted to 16.5 per cent (see Figure 6).
Lietuvos Radijo ir Televizijos Others (145) Centras AB 16.5 % 2.3 % TEO LT, AB 27.6 %
Bitė Lietuva UAB 17.0 %
Tele2 UAB 18.4 % Omnitel UAB 18.2 %
Figure 6. The distribution of the revenues of the electronic communications market by the market participants in 2011, per cent Source: RRT
Subscribers. The number of subscribers during the time period of 2006–2011 most rapidly grew on the Internet access services and pay-TV markets: the number of subscribers of the Internet access services grew almost 2.5 times and amounted to 989.2 thousand, i. e. 12.5 per cent more than in 2010; the number of subscribers of pay-TV, during the time period of 5 years grew almost two times and in 2011 amounted to 664.1 thousand, i. e. 4.1 per cent more than in 2010. As the public mobile telephone communication market reached its maturity in 2008, the number of active public mobile telephone communication subscribers remained stable in 2011 and amounted to almost 4.94 million. The number of public fixed telephone communication subscribers continued to reduce: by 5.2 per cent during the year and at the end of 2011, it amounted to 695.8 thousand (see Figure 7).
10 Lithuanian Communications Sector 2011
4 921 5 023 4 961 4 891 4 938 4 718 1100 5000 1000 989.2 4500 879.6 900 796.1 4000 799.4 800 792.4 784.9 747.4 733.7 3500 695.8 700 709.8 3000 600 638.3 664.1 581.9 599.3 2500 500 2000 489.2 400 417.5 1500 386.4 300 358.8 1000 2006 2007 2008 2009 2010 2011
Fixed telephone communication Internet access Television Mobile telephone communication
Figure 7. The numbers of subscribers in the electronic communications sector in 2006–2011, thousand Source: RRT
The fact that the Internet access and television services markets remain the priority segments of the electronic communications sector is also reflected when comparing the indicators of penetration in the individual segments of the sector (see Figure 8). The Internet access and television services subscribers’ penetration retains its rapid growth trend: during 2011 the Internet access subscribers’ penetration grew by 3.8 percentage points, the television penetration – by 4.7 percentage points. The mobile telephone communication subscribers’ penetration also grew by 3.6 percentage points however the market maturity, which was reached in 2008, resulted in a slowdown of the rates of growth of subscribers’ penetration.
150.7 % 154.3 % 35% 146.2 % 149.9 % 149.0 % 160% 139.4 % 30.9 % 30% 27.1 % 140% 23.9 % 25.2 % 25% 23.4 % 23.7 % 23.4 % 22.6 % 120% 22.5 % 20% 21.2 % 21.7 % 20.5 % 17.3 % 100% 15% 16.1 % 12.3 % 14.6 % 11.5 % 80% 10% 10.6 % 5% 60% 2006 2007 2008 2009 2010 2011 Fixed telephone communication Internet access Television Mobile telephone communication
Figure 8. The penetration on the markets in the electronic communications sector in 2006-2011, per cent Source: RRT
ARPU. The highest average revenues per user (ARPU) in 2011 were received by the Internet service providers, i. e. LTL 36.6 (LTL 3.6 less than in 2010), the lowest – by the providers of public mobile telephone communication services – LTL 15.9, i. e. LTL 0.9 less than in 2010 (see Figure 9). Compared to 2010, in 2011 the ARPU, received for provision of public fixed telephone communication services also reduced by 7 per cent or by LTL 2.4 and amounted to LTL 31.7. The ARPU from the pay-TV services grew during the last 5 years and in 2011 amounted to LTL 21.5, i. e. LTL 0.7 more than in 2010.
11 Lithuanian Communications Sector 2011
2011 31.7 15.9 36.6 21.5
2010 34.1 16.8 40.2 20.8
2009 39.0 18.9 44.5 17.7
2008 42.3 22.6 48.8 15.8
2007 43.0 23.5 50.8 15.5
2006 44.8 21.9 55.4 15.3
Fixed telephone communication Mobile telephone communication Internet access Television
Figure 9. Average revenues per user (ARPU) in 2006–2011, LTL Source: RRT
The main points. Already for several years in a row the providers of electronic communications networks and services dedicate the greater share of investment into the electronic communications network infrastructure to the implementation of next generation networks (NGN) by using fibre communication lines, which is reflected in the changes in the distribution of subscribers of the Internet access services against the ways of connecting to the Internet (see Figure 10): more than one third (36.4 per cent) of all the subscribers of the Internet access services received the Internet access over fibre lines. The second most popular method of connecting to the Internet in 2011 was over mobile communications networks (26 per cent), which pushed the xDSL technology to the third position (20 per cent). The number of subscribers of the wireless Internet access services also retained stable growth rates. In 2011 10.8 per cent of subscribers connected to the Internet over wireless communication lines. The choice of subscribers to receive the Internet access services over mobile and wireless communication networks resulted not only from the functionality of the services, which provides additional advantage, but also from the increasing penetration of the Internet services into more remote areas, in which provision of the Internet access services over fixed communication technologies is not economically viable.
2011 36.4 % 20.0 % 2.2 % 4.6 % 10.8 % 26.0 % 0.1 %
2010 35.0 % 24.2 % 2.8 % 5.6 % 10.1 % 22.1 % 0.1 %
2009 33.0 % 29.5 % 3.5 % 6.8 % 9.5 % 20.5 % 0.2 %
2008 23.5 % 36.9 % 6.2 % 9.1 % 9.0 % 17.8 % 0.3 %
2007 16.3 % 39.8 % 10.8 % 11.2 % 8.8 % 12.8 % 0.4 %
Over fibre communication lines Over xDSL Over LAN Over CTV networks Over wireless communication lines Over mobile communication networks Figure 10. The distribution of the Internet access services subscribers against the methods of connection to the Internet in 2007–2011, per cent Source: RRT
In 2011 39 per cent of all the subscribers, connecting to the Internet over fibre communication lines were the subscribers of TEO LT, AB (see Figure 11). The trend of reduction of the market share of other
12 Lithuanian Communications Sector 2011 providers of the Internet access services was observed throughout the time period of 2005–2011. Starting from 2007, when TEO LT, AB commenced the implementation of the fibre communication lines network, till 2011 the number of the subscribers of the said undertaking, connecting to the Internet over fibre communication lines, grew by 138.4 thousand, the number of subscribers of other service providers grew by 212 thousand over the same period.
100% 400 66.1 % 61.0 % 99.4 % 99.9 % 98.1 % 85.2 % 75.4 % 359.9 80% 300 305.7 60% 254.5 159.5 200 40% 94.7 52.6 100 20% 12.9 0.6 % 1.9 % 14.8 % 24.6 % 33.9 % 39.0 % 0% 0.1 % 0 2005 2006 2007 2008 2009 2010 2011 TEO LT, AB Other providers Number of subscribers Figure 11. The market shares of TEO LT, AB and providers of Internet access services according to the percentage of the subscribers, connecting to the Internet over fibre communication lines and the dynamics of the total number of subscribers in 2005–2011, thousand Source: RRT Lithuania is noted in the global context as one of the leading states in terms of development of the next generation networks. According to the data of the study, performed in December 2011 by FTTH Council Europe and iDate, Lithuania, for the third year in a row, was the absolute Europe’s leader in terms of penetration of the broadband Internet access, provided over fibre communication lines (hereinafter referred to as the FTTx) (see Figure 12) (according to the data of the same study, Lithuania took the sixth spot in the world after South Korea, Japan, Hong Kong, the United Arab Emirates and Taiwan). The aforementioned study was aimed at evaluation of the number of fibre communication lines per 100 households, rating the countries, having no less than 200 000 households. The information is provided only with regard to the European countries, in which the penetration of fibre communication lines was higher than 1 per cent. In addition, another source of data on the number of households in the European countries was used, which resulted in the change of indicators of certain countries and the change with the past period was not evaluated.
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Figure 12. The penetration of the subscribers of broadband Internet access over fibre communication lines in the European countries in 2011, per cent Source: FTTH Council Europe and IDATE
In the study of the trends of development of fibre communication technologies (FTTx), announced by FTTH Council Europe in September 20111 it is emphasized that the FTTx technologies are considered one of the most important driving forces behind a country’s economy: the technologies allow for developing new services and new jobs, efficient management of enterprises’ resources and saving time.
13 Lithuanian Communications Sector 2011
The year 2011 was also important for the providers of television services. The analogue terrestrial television will be completely disconnected on 29 October, 2012, which means that the users, who previously watched free-of-charge analogue terrestrial television, wishing to keep the possibility to view television programs, will have to make the decision regarding several alternatives, i. e.: purchase a digital signal coding television set-top box or a television set with an integrated digital signal coding box and, if necessary, the antenna or become a subscriber of pay-TV services. A part of the viewers of free-of-charge analogue terrestrial television, due to the changes, planned to be executed in 2012, have become subscribers of digital television already in 2011 and, due to the said reason, the number of subscribers of pay-TV grew by 4.1 per cent during 2011, and, most likely, will grow during the coming several years. In 2011 almost 50.6 per cent of subscribers of pay-TV received the signal digitally. During 2011 the number of subscribers of digital pay-TV grew more than by one fifth, i. e. by 21.5 per cent. The next generation networks (NGN), which have been successfully developing in Lithuania, also resulted in a greater popularity of the television, provided by employing the Internet Protocol (IP), i. e. the IPTV. At the end of 2011 the IPTV services were provided by 7 undertakings, the television programs, broadcasted by the said method, were used by 83.5 thousand subscribers and, compared to the data of the previous year, the number of such subscribers grew by 18 per cent. Summary
In 2011 the total revenues of the electronic communications sector reduced by 7 per cent however, compared to 2010, the rate of reduction of the electronic communications revenues slowed down by 3.7 percentage points (during 2010 the total revenues of the sector reduced by 10.7 per cent). During the same period Lithuania’s GDP grew by 5.9 per cent and the share of electronic communications revenues amounted to 2.3 per cent of the total GDP. In the overall structure of the electronic communications sector in 2011 the growth trend was retained by the Internet access market share, which grew by 1.9 percentage points. The shares of public mobile telephone communications and television and radio services markets correspondingly grew by 1.2 and 1.1 percentage points. In 2011 the revenues for provision of television and radio services (both wholesale and retail) grew most, i. e. by 7.2 per cent (LTL 203.2 thousand), the revenues from the Internet access and other data transmission activities, compared to 2010, grew by 1.6 per cent (i. e. by LTL 521.4 thousand), the Internet access service revenues – by 1.9 per cent. The revenues, received for provision of public mobile communication networks and services, compared to 2010, reduced by 4.1 per cent (LTL 944 thousand), the public fixed telephone communication revenues – by 10.5 per cent (LTL 270.9 thousand) and the revenues, received from networks interconnection activities reduced the most, i. e. by 22.1 per cent (LTL 427.9 thousand). In 2011 the number of subscribers of the Internet access services grew most, i. e. by 12.5 per cent and at the end of the year it reached 989.2 thousand; the number of subscribers of pay-TV grew by 4.1 per cent during the same period and at the end of the year reached 664.1 thousand. In 2011 the highest average revenues per unit (ARPU) were received for provision of the Internet access services, i. e. LTL 36.6, the lowest – for provision of public mobile telephone communication services, i. e. LTL 15.9. In 2011 the ARPU from provision of public fixed telephone communication services reduced by
14 Lithuanian Communications Sector 2011
7 per cent and amounted to LTL 31.7, ARPU from pay-TV services amounted to LTL 21.5 i. e. 3.4 per cent more than in 2010.
1.2. Social and Economic Factors
The rapid development of information technologies and development of new technologies, observed throughout the later years cardinally changed the needs of residents and enterprises and their possibility to supply themselves with different terminal equipment, used for transmission and receiving of information and develop their computer literacy. During the time period of 2001–2011 possession of computers in households increased 6.6 times, the Internet use at home – 9 times. During the same period the absolute majority of Lithuania's enterprises used computers for their activities, i. e. the number increased from 84.4 per cent in 2001 up to 98 per cent in 2011, the Internet use in enterprises increased one and a half times in 2011 and the number of enterprises, having their own webpages or homepages increased 2.5 times. The economic recession to a certain extent slowed down the rates of growth of possession of computers in households and the Internet use, especially in rural areas however it is likely that during the coming years, with the remaining need to use particular services as well as with the expansion of the range of the new services, the aforementioned rates are going to speed up.
Households. The technological progress, observed during the several later years (the rapid growth of the quality of the Internet access, provided over mobile communication networks, more powerful processors, touch screens, more saving use of energy, etc.) and the reducing prices of new equipment allowed for extending of the possibilities of the equipment (for instance, tablets) and increasing and encouraging the demand for the equipment2. However in 2011 personal computers (both desktop and laptop) and mobile telephones (including smartphones) remain the main equipment used for receipt of electronic communications services. The supply of households with computers grew in 2011 however the growth was slower than in the previous years: according to the data of Statistics Lithuania, during the time period of 2004–2008 the average change of growth of supply of households with personal computers amounted to 6 percentage points, in 2009 – to 4.2 percentage points, in 2010 – to 1.6 percentage points, in 2011 – to 2 percentage points (see Figure 13).
63.5 % 59.5 % 61.3 % 52.5 % 54.1 % 46.9 % 55.8 % 52.2 % 53.8 % 36.4 % 36.4 % 48.0 % 42.0 % 40.8 % 25.7 % 36.5 % 37.3 % 39.0 % 29.0 % 29.0 % 34.5 % 15.2 % 10.9 % 19.3 % 23.6 % 12.0 % 17.9 % 8.5 % 13.5 % 13.5 % 6.6 % 3.0 % 5.3 % 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
All households Urban Rural Figure 13. Supply of households with personal computers in 2001–2011, per cent Source: Information Technologies in Lithuania 2007, Statistics Lithuania, Vilnius, 2007; Information Technologies in Lithuania 2011, Statistics Lithuania, Vilnius, 2011
15 Lithuanian Communications Sector 2011
According to the data of Statistics Lithuania, approximately one of 20 households had a computer at home in 2000, in 2005 29.0 per cent and in 2011 already 55.8 per cent of all households had a computer. Compared to 2010, in 2011 the relation between the number of residents in urban and rural areas having a personal computer, reduced insignificantly: according to the data of 2011, the number of urban households, having computers, was 1.55 times higher (63.5 per cent) than in rural areas (40.8 per cent). In 2010 the said difference was 1.57 times. In 2011 88.2 per cent of all the Lithuanian households had a mobile telephone (1.3 percentage point more than in 2010). The number of households, who had a mobile telephone among urban households (93.9 per cent) was 11 per cent higher than that of rural ones (81.6 per cent).
The possession of terminal equipment in households directly depends on household income. In 2011 the absolute majority of the households (96.7 per cent), whose monthly income in cash exceeded LTL 2500 had a personal computer, 96.6 per cent of households had Internet access. 12.2 per cent of households, with monthly income up to LTL 800, had a personal computer and 13.5 per cent had the Internet access (see Figure 14).
12.2 % 13.5 % 36.4 % 36.7 % 52.8 % 53.3 % 83.5 % 82.7 % 96.7 % 96.6 %
up to 800 800–1 200 1 201–1 800 1 801–2 500 2 501 and more Have a personal computer Have Internet access Figure 14. The households, who have personal computer and Internet access at home according to their monthly income in LTL in 2011, per cent Source: Information Technologies in Lithuania 2011, Statistics Lithuania, Vilnius, 2011
The economic situation in the country, which changed in 2008, resulted in a slower growth of the use of the Internet access in households, especially in rural areas. According to the data of Statistics Lithuania, 55.8 per cent of all households had Internet access at home in 2011. The number of households, who had the Internet access among urban households (63.6 per cent) was 1.6 times higher than that of rural ones (40.5 per cent) (see Figure 15).
61.5 % 62.2 % 63.6 % 53.5 % 50.4 % 55.8 % 40.2 % 54.7 % 54.9 % 47.1 % 40.3 % 19.6 % 31.7 % 40.8 % 40.7 % 40.5 % 15.2 % 32.9 % 8.7 % 14.4 % 22.6 % 6.2 % 10.6 % 16.4 % 1.1 % 2.0 % 3.6 % 2003 2004 2005 2006 2007 2008 2009 2010 2011
All households Urban Rural Figure 15. Households with Internet access in 2003–2011, per cent Sources: Information Technologies in Lithuania 2007, Statistics Lithuania, Vilnius, 2007; Information Technologies in Lithuania 2011, Statistics Lithuania, Vilnius, 2011
16 Lithuanian Communications Sector 2011
Comparing the indicators of Internet access in households in the EU Member States during the latter years, according to the data of Eurostat, the indicator of use of Internet in Lithuanian households, which, during 2011, grew only by 1 per cent, i. e. up to 62 per cent, was 11 percentage points lower than the EU average, which reached 73 per cent (see Figure 16). In Lithuania, as in other EU Member States the trend of growth of penetration of broadband Internet access subscribers is observed (during the time period of 2004– 2011 the share of Lithuanian households, using broadband Internet access grew by 7.6 percentage points on the average, while in the EU Member States – by 8.3 percentage points) however the penetration of broadband Internet access subscribers in Lithuania (57 per cent) is 10 percentage points lower than in the EU (see Figure 17). The larger share of Internet access users both in Lithuania (57 per cent) and in other EU Member States use the Internet, provided over the broadband access (see Figures 16 and 17).
The Netherlands 94 % Sweden 86 % Luxembourg 91 % Denmark 84 % Sweden 91 % The Netherlands 83 % Denmark 90 % Finland 81 % Finland 84 % The UK 80 % Germany 83 % Germany 78 % The UK 83 % Malta 75 % Ireland 78 % Belgium 74 % Belgium 77 % Austria 72 % France 76 % France 70 % Austria 75 % Luxembourg 68 % Malta 75 % Slovenia 67 % EU 27 73 % EU 27 67 % Slovenia 73 % Estonia 66 % Estonia 71 % Ireland Slovakia 71 % 65 % Czech Republic Poland 67 % 63 % Spain Czech Republic 67 % 62 % Poland Hungary 65 % 61 % Hungary Latvia 64 % 61 % Latvia Lithuania 62 % 59 % Italy 62 % Lithuania 57 % Spain 59 % Portugal 57 % Portugal 58 % Cyprus 56 % Cyprus 57 % Slovakia 55 % Greece 50 % Italy 52 % Romania 47 % Greece 45 % Bulgaria 45 % Bulgaria 40 %
2010 2011 2010 2011 Figure 16. The Internet usage in households in the EU Figure 17. The share of households, using broadband Member States in 2010–2011, per cent Internet access services in the EU Member States in 2010–2011, per cent Source: Eurostat Source: Eurostat
Residents. According to the data of Statistics Lithuania, in 2011 64 per cent (60 per cent in 2010) of persons aged 16 to 74 used both the personal computer and the Internet in Lithuania. The largest share of the residents, using information technologies are the persons aged 16 to 24, including 93.3 per cent using
17 Lithuanian Communications Sector 2011 the Internet and 96.6 per cent using the computer. The smallest share, 11.7 per cent of persons, using the Internet and 11.4 per cent, using the computer correspondingly, is the 65 to 74 age group.3 According to the data of Eurostat, in the 2011 in the EU Member States 68 per cent of persons used the Internet regularly (at least one time per week), in Lithuania the indicator was 61 per cent of all the residents of the country (see Figure 18). However in Lithuania there still remains a significant share of people, not using the Internet at all: according to the data of Eurostat, in 2011 it reached 33 per cent, while the EU average is 24 per cent (see Figure 19). According to the data of Statistics Lithuania, the majority of persons (74 per cent), who do not have the Internet access at home, stated that they do not need the Internet. Other important reasons, due to which the Internet is not used at home is expensive equipment and high service tariffs, the possibility to use the Internet elsewhere or lack of the necessary skills.4
Sweden 76 % 12 % 91 % Sweden 5 % The Netherlands 74 % 14 % 90 % Denmark 7 % Denmark 73 % 18 % 87 % The Netherlands 7 % 63 % Luxembourg 86 % 29 % Luxembourg 8 % Finland 62 % 86 % Finland 23 % 54 % 9 % The UK 81 % The UK 28 % Belgium 53 % 11 % 78 % 39 % 54 % Belgium 14 % Germany 77 % 29 % 49 % Germany Austria 76 % 16 % France France 74 % 18 % 54 % Austria 40 % Estonia 73 % 18 % 43 % 36 % Slovakia 72 % Estonia 20 % 31 % 42 % Ireland 71 % Slovakia 20 % 43 % 55 % EU 27 68 % Ireland 21 % Slovenia 40 % 43 % 64 % EU 27 24 % Latvia 36 % 63 % 66 % Czech Republic 24 % Hungary 34 % 51 % 66 % Latvia 27 % Malta 34 % 66 % Hungary 60 % 35 % 28 % Spain 62 % 48 % Slovenia 29 % Lithuania 30 % 61 % Spain 50 % 26 % 29 % Czech Republic 63 % Malta 57 % Poland 29 % 30 % 59 % 58 % 26 % Poland 33 % Cyprus 54 % 28 % Lithuania 61 % Italy 51 % 33 % 28 % Italy 62 % Portugal 51 % 39 % 18 % 63 % Greece 47 % Portugal 41 % 64 % Bulgaria 46 % Cyprus 41 % 73 % Romania 37 % Greece 45 %
2005 2011 2005 2011
Figure 18. The share of residents, regularly using the Figure 19. The share of residents, who have never used Internet in the EU Member States in 2005 and in 2011, the Internet in the EU Member States in 2005 and in per cent 2011, per cent Source: Eurostat Source: Eurostat
The purposes of use of the Internet in Lithuania remained the same in 2011 as in 2010: the Internet is most frequently used for reading, viewing the news, reading newspapers and magazines (56.7 per cent) as well for receiving the information on goods and services (54.7 per cent), a good deal of residents also used the Internet banking in 2011 (41.1 per cent).5 It is noteworthy that during the year the use of the Internet
18 Lithuanian Communications Sector 2011 for searching for the information, relating to health grew by 7 percentage points. 37.7 per cent of the Internet users used the Internet for the said purpose in 2011. The use of e. commerce for personal purposes has also been growing. 16.2 per cent of the persons, using the Internet, purchased or ordered goods and services for personal purposes on the Internet in Lithuania in 2011, i. e. 5.4 percentage points more than in 2010 and almost 4 times more than in 2006 (see Figure 20). Most frequently the e. commerce was used for purchasing tickets to cultural events, clothes, footwear, sports goods, telecommunications services, tours and the relating services.6
16.2 % 8.5 % 10.8 % 4.2 % 5.5 % 5.9 %
2006 2007 2008 2009 2010 2011
Figure 20. The share of residents aged 16 to 74, who used e. commerce for personal purposes in 2006–2011, per cent Source: Statistics Lithuania
When comparing the indicators of use of e. commerce for personal purposes in the EU Member States, according to the data of Eurostat, Lithuania, in terms of use of the services is still far behind the EU average, which, in 2011, reached 43 per cent (see Figure 21). In the communication, issued by the European Parliament in 2011, it is stated that there has been proof that the users, who have tried the e. commerce are, in essence, satisfied and continue using the services. Other persons, who have not tried the services yet, are still inclined not to use them, which can raise the conclusion that the potential customers face the problem of confidence, for instance, possible frauds, unawareness of the steps to take in case “something goes wrong”, the ways to refund the money spent, the problems, relating to delivery of the goods,
etc.7
65 % 65 % 43 % 43 % 43 % 44 % 45 % 53 % 62 % 64 % 69 % 71 % 71 % 70
37 37 %
31 % 31
30 % 30 % 30
27 % 27
22 % 22
21 % 21 % 21
20 % 20
18 % 18 % 18
16 % 16
15 % 15
7 7 %
6 6 %
14 % 14 12 % 12 % 16 % 19 % 24 % 25 % 38 % 42 % 39 % 43 % 44 % 50 % 48
5 % 5 6 6 % 2 % 2 % 6 % 5 % 7 % 8 % 5 % 7 % 9 %
Italy
Malta
Spain
Latvia
EU 27 EU
Ireland
France Poland Austria
Cyprus
Greece Finland
Estonia
The UK The
Belgium
Sweden
Bulgaria
Portugal
Hungary Slovakia
Slovenia
Romania
Denmark
Lithuania
Germany
Luxembourg Czech Republic Czech 2005 2011 Netherlands The
Figure 21. The purchase of goods or services for personal purposes in the EU Member States in 2005 and in 2011, per cent Source: Eurostat
Enterprises. In 2011 the trends of Internet use among the enterprises remained the same as in 2010: more than 98 per cent of Lithuanian enterprises used computers and the Internet in 2011. 67.7 per cent of Lithuania’s enterprises had their websites, i. e. 2.5 percentage points more than in 2010 (see Figure 22).
19 Lithuanian Communications Sector 2011
89.7 % 91.7 % 91.7 % 90.5 % 94.8 % 96.1 % 96.9 % 98.0 % 84.4 % 84.8 % 98.1 % 92.7 % 95.0 % 96.2 % 85.2 % 87.5 % 88.4 % 79.8 % 65.5 % 68.5 %
26.8 % 32.0 % 38.6 % 40.8 % 41.3 % 47.4 % 54.4 % 61.7 % 65.2 % 67.7 %
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Have a website or a homepage Use personal computers Use the Internet Figure 22. The use of computers and the Internet in Lithuanian enterprises in 2002–2011, per cent Source: Information Technologies in Lithuania 2011, Statistics Lithuania, Vilnius, 2011
In terms of use of the Internet by enterprises Lithuania reached the EU average in 2008. In 2011 Lithuania surpassed the EU average by 3 percentage points, which amounted to 98 per cent and was second only to Finland, in which the use of Internet by enterprises reaches 100 per cent (see Figure 23). Comparing the indicators of the enterprises, which have a website or a homepage in the EU Member States, according to the data of Eurostat, Lithuania is only one percentage point behind the EU average, which, in 2011 reached 69 per cent (see Figure 24).
Finland 100 % Finland 93 % Sweden Denmark 98 % 89 % Denmark Austria 98 % 89 % Austria 83 % The Netherlands 98 % The Netherlands 82 % Lithuania 98 % Germany 81 % Slovenia 97 % The UK 79 % Germany 97 % Czech Republic 77 % Luxembourg 97 % Belgium 77 % Slovakia 97 % Slovakia 76 % Spain 97 % Luxembourg 75 % Sweden 96 % Slovenia 74 % Belgium 96 % Malta 73 % Czech Republic 96 % Estonia 73 % Estonia 96 % Ireland 70 % France 96 % EU 27 69 % Lithuania EU 27 95 % 68 % Greece The UK 95 % 65 % Poland Malta 95 % 65 % Spain 64 % Portugal 95 % France 60 % Italy 94 % Italy 63 % Poland 94 % Hungary 60 % Ireland 93 % Cyprus 56 % Greece 93 % Portugal 54 % Latvia 92 % Latvia 53 % Cyprus 91 % Bulgaria 45 % Hungary 89 % Romania 34 %
2005 2011 2005 2011
Figure 23. The use of Internet by enterprises in the EU Figure 24. The share of enterprises, having Member States in 2005 and in 2011, per cent websites and homepages in the EU Member Source: Eurostat States in 2005 and in 2011, per cent Source: Eurostat
20 Lithuanian Communications Sector 2011
Compared to 2010, in 2011 the share of enterprises, using the broadband Internet access, provided by employing fixed communication technologies in Lithuania grew by 9 percentage points and reached the EU average, i. e. 87 per cent. In 2011 the said type of access was mostly used by the enterprises of Finland,
Spain (96 per cent) and Malta and Sweden (94 per cent) (see Figure 25).
95 % 95
93 % 93 % 93
91 91 %
90 % 90
89 % 89
88 % 88 88 % 88
87 % 87 % 87 % 87
85 % 85 85 % 85 % 85
84 % 84 % 84 % 84
83 % 83 % 83
80 % 80
78 % 78 % 78
84 % 84 49 % 49 % 54 % 61 % 68 % 66 % 73 % 71 % 76 % 76 % 66 % 82 % 75 % 82 % 83 % 84 % 86 % 87 % 87 % 87 % 88 % 88 % 90 % 90 % 91 % 91 % 92 % 92 % 92 % 93 % 94 % 94 % 96 % 96
Italy
Malta
Spain
Latvia
EU 27 EU
Ireland
Poland Austria France
Cyprus
Greece Finland
Estonia
The UK The
Belgium Sweden
Bulgaria
Portugal
Slovakia Hungary
Slovenia
Romania
Denmark
Lithuania
Germany
Luxembourg
Czech Republic Czech The Netherlands The 2010 2011 Figure 25. The share of EU enterprises, using the broadband Internet access, provided by using the fixed communication technologies in 2010–2011, per cent Source: Eurostat
According to the data of Eurostat, the year 2011 saw the rapid increase of the number of enterprises, connecting to the Internet by the public mobile telecommunication network: during the year the EU average grew by 20 percentage points and in 2011 amounted to 47 per cent. 49 per cent of enterprises received broadband Internet services by using the mobile communication technologies in Lithuania, i. e. 29 percentage points more than in 2010 (see Figure 26).
65 % 65 % 67 % 77
60 % 60
57 % 57
52 % 52
50 % 50
49 % 49
% 48
47 % 47 % 47 % 47 % 47
46 % 46
41 % 41 % 41
39 % 39
38 % 38 % 38 % 38
34 % 34
32 % 32
29 % 29
27 % 27
25 % 25
24 % 24
23 % 23
15 % 15
8 % 8 % 9 % 6 % 9
21 % 21 % 28 % 36 12 % 12 % 18 % 20 % 29 % 11 % 22 % 36 % 25 % 28 % 36 % 19 % 27 % 35 % 43 % 20 % 31 % 22 % 28 % 46 % 55 % 68
Italy
Malta
Spain
Latvia
EU 27 EU
Ireland
France Poland Austria
Cyprus
Greece
Finland
Estonia
The UK The
Belgium
Sweden
Bulgaria
Portugal
Hungary Slovakia
Slovenia
Romania
Denmark
Lithuania
Germany Luxembourg
2010 2011 Republic Czech The Netherlands The Figure 26. The share of EU enterprises, using the broadband Internet access, provided by using mobile communication technologies in 2010–2011, per cent Source: Eurostat
The wide use of information technologies in enterprises determines the use of e. commerce services. The share of turnover of Lithuanian enterprises, received from e. commerce amounted to 12 per cent in 2011 and was 2 per cent lower than the EU average (see Figure 27). The highest turnover from e. commerce was in the Czech Republic (25 per cent) and in Finland (20 per cent).
21
Lithuanian Communications Sector 2011
14 % 14 % 17 11 % 11 % 11 % 11 % 11 % 12 % 13 % 14 % 14 % 14 % 16 % 17 % 17 % 18 % 19 % 19 % 20 % 25
1 1 % 2 % 3 % 4 % 5 % 6 % 9 % 9 %
Italy
Malta
Spain
Latvia
EU27
Ireland
Austria France
Poland
Cyprus
Greece
Finland
Estonia
The UKThe
Belgium Sweden
Bulgaria
Portugal
Slovakia Hungary
Romania
Denmark
Lithuania
Germany
Slovenia
Czech Republic Czech The Netherlands The
Figure 27. The shares of enterprises’ turnover from e. commerce in the EU Member States in 2011, per cent Source: Eurostat
According to the data of Eurostat, in 2011 21 per cent of Lithuanian enterprises sold their goods and services over the Internet (the EU average is 13 per cent). The largest number of enterprises, which sold their goods and services over the Internet among the EU Member States, was in the Czech Republic (26 per cent) and in Sweden (24 per cent). In 2011 33 per cent of Lithuania’s enterprises purchased goods and services over the Internet (the EU average is 35 per cent) and the largest number of Internet purchases was performed by Danish enterprises (71 per cent). The attention should be drawn to the fact that both Lithuanian and the EU enterprises are more inclined to buy goods and services on the Internet than to sell and the average ratio of the said indicator among different EU Member States differs more than two times (see Figure 28).
51 % 51 % 54 % 59 % 71
50 % 50
49 % 49 % 49
48 48 %
42 % 42
36 % 36
35 % 35
34 % 34
33 % 33 % 33
27 27 % 27 %
26 % 26 % 26
25 % 25
24 % 24
23 % 23
21 % 21
18 % 18
16 % 16
13 % 13
10 % 10 % 10
9 9 %
13 % 13 % 11 11 % 11 % 16 % 11 % 16 % 11 % 19 % 21 % 10 % 13 % 22 % 26 % 17 % 23 % 24 % 15 % 15 % 20 % 11 % 23
9 % 9 4 4 % 3 % 6 % 8 % 7 % 4 %
Italy
Malta
Spain
Latvia
EU 27 EU
Ireland
France Austria
Poland
Cyprus
Greece Finland
Estonia
The UK The
Belgium Sweden
Bulgaria
Portugal
Slovakia Hungary
Slovenia
Romania
Denmark
Lithuania
Germany*
Luxembourg
Czech Republic Czech The Netherlands The The enterprises, which purchased goods and services over e. networks The enterprises, which sold goods and services over e. networks Figure 28. The share of enterprises, which sold and purchased goods or services over the Internet in the EU Member States in 2011, per cent Source: Eurostat
According to the data of Statistics Lithuania, in 2010 already 98.1 per cent of Lithuania’s enterprises communicated with the state institutions over the Internet, most enterprises used the Internet for downloading different forms (97.8 per cent). According to the indicator of communication with the state institutions over the Internet for the purpose of downloading different forms in the EU context Lithuania bypassed the EU average, which in 2010 reached 76 per cent (see Figure 29) by 10 percentage points and took the first position in terms of the said indicator.
22
Lithuanian Communications Sector 2011
80 % 80 % 83 74 % 74 % 78 % 75 % 76 % 78 % 79 % 79 % 79 % 81 % 82 % 84 % 85 % 85 % 86 % 90 % 91 % 92 % 92 % 95 % 98
Malta
Latvia
EU 27 EU
Ireland
Poland France Austria
Cyprus
Greece Finland
Estonia
The UK The
The
Sweden
Bulgaria
Portugal
Slovakia
Hungary
Slovenia
Denmark
Lithuania
Netherlands Czech Republic Czech
Figure 29. The share of enterprises, which communicated with the state institutions over the Internet in order to download different forms in the EU Member States in 2010, per cent Source: Eurostat
Summary
In 2011 personal computers (both desktop and laptop) and mobile telephones (including smartphones) remained the main equipment for receipt of electronic communication services in Lithuania. 55.8 per cent of all the households had personal computers and 88.2 per cent – mobile telephones. 55.8 per cent of all the households had Internet access, the share of urban households with the Internet access (63.6 per cent) was 1.6 times larger than that of rural households (40.5 per cent). Comparing the indicators of the Internet use in Lithuanian and the EU households, in 2011 Lithuania was 11 percentage points behind the EU average, which reached 73 per cent. In 2011 64 per cent of persons aged 16 to 74 used both computers and the Internet in Lithuania, i. e. 4 percentage points more than in 2010. Notwithstanding the increasing Internet use, the share of residents, who do not use the Internet, remains quite large, i. e. 33 per cent, while the EU average reached 24 per cent. In 2011 16.2 per cent of persons in Lithuania purchased or ordered goods and services for personal purposes over the Internet, i. e. 5.4 percentage points more than in 2010. However, in terms of the residents’ use of e. commerce Lithuania is still far behind the EU average, which reached 43 per cent in 2011. In 2011 more than 98 per cent of Lithuania’s enterprises, i. e. 3 percentage points more than the EU average used computers and the Internet. 67.7 per cent of Lithuanian enterprises had their websites and homepages, i. e. 2.5 percentage points more than in 2010, which is almost equal to the enterprises of other EU Member States (69 per cent). In 2011 the number of enterprises, connecting to the Internet over public mobile communication networks, grew rapidly: 49 per cent of enterprises, i. e. 29 percentage points more than in 2010, received broadband communication services by using mobile communication technologies. The EU average grew by 20 percentage points during the year and amounted to 47 per cent. In 2011 21 per cent of Lithuania’s enterprises sold goods and services over the Internet (the EU average is 13 per cent). Both Lithuania’s and the EU enterprises are more inclined to purchase than to sell goods and services over the Internet and the average ratio of the said indicator among different EU Member States differs more than two times. In 2010 already 98.1 per cent (the highest indicator among all the EU member states) of Lithuania’s enterprises communicated with state institutions over the Internet. Most enterprises used the Internet for
23 Lithuanian Communications Sector 2011
downloading different forms (97.8 per cent), and Lithuania surpassed the EU average, which reached 76 per cent in 2010, by 10 percentage points.
1 http://www.ftthcouncil.eu/documents/Presentations/20110927BBWFPRESSCONFERENCE_FULL.pdf 2 http://blog.tele2.lt/r/plansetiniai-kompiuteriai/ 3 Lithuanian Statistics Annual 2011, Statistics Lithuania, Vilnius 2011 4 http://www.stat.gov.lt/lt/news/view/?id=9156 5 Information Technologies in Lithuania 2011, Statistics Lithuania, Vilnius 2011 6 http://www.stat.gov.lt/lt/news/view/?id=9156 7 http://www.europarl.europa.eu/meetdocs/2009_2014/documents/imco/cm/872/872357/872357lt.pdf
24
2. Telephone Communication
2.1. Voice Services
In 2011 voice services continued to remain one of the main sources of revenues – they amounted to one third of all the revenues in the entire electronic communications sector. The changing consumers’ habits and the modern way of life, determined by the fast speed of living and the necessity to get in touch at any time and at any place, the reducing divide between the retail prices of public mobile and fixed communication voice services, allow for conclusion on the more active competition between the providers of public mobile and fixed communication voice services and highlight the processes of convergence between the said services. The present part of the Report provides the general overview of the voice services market and the main trends on the markets of public mobile and fixed communications voice services, observed in 2011.
General market overview
At the end of 2011 voice services were provided by 60 providers, including 14, providing voice services over public mobile communications networks and 52 – over public fixed communications networks. Voice services were provided by 40 per cent of all the providers of electronic communications services (150 providers). During the time period of 2006-2011 a reduction of both voice services market (measured by revenues) and its share in the overall electronic communications sector was observed (see Figure 30). In 2011 the revenues for the provision of voice services, received by all 60 providers of voice services amounted to 29.3 per cent in the overall structure of electronic communications revenues. Compared with 2010, the voice services market share decreased by 4.1 percentage points. During 2011 the revenues of the voice services sector reduced by 18.1 per cent and amounted to LTL 702.6 million.
52.7 % 49.7 % 45.8 % 1600 37.8 % 55 % 33.4 % 45 % 1200 29.3 % 35 % 800 25 % 15 % 400 1 420.7 1 477.3 1 362.4 1 089.2 857.8 702.6 5 % 0 -5 % 2006 2007 2008 2009 2010 2011 The revenues for the voice services The share on the electronic communications market Figure 30. The revenues for the voice services, LTL million, and the share of the revenues for voice services on the electronic communications market in 2006–2011, per cent Source: RRT
In 2006–2011 the revenues, received for provision of public mobile telephone communication voice services, amounted to the largest share of the total revenues from retail voice services (62.3 per cent) however the revenues, received from provision of public mobile telephone communication voice services,
25
Lithuanian Communications Sector 2011 have been reducing since 2007 (see Figure 31). The share of the revenues, received for public mobile telephone communication voice services in 2007–2011, in the total revenues structure reduced by 10.2 percentage points, i. e. from 72.5 down to 62.3 per cent (in 2011). The total revenues for voice services reduced due to the reduction of the revenues, received from provision of both mobile and fixed telephone communication voice services. However the public mobile communication voice services reduced more rapidly than fixed voice services. The revenues, received for public mobile communication voice services in 2011 were 22.2 per cent and the revenues, received for fixed voice services – 10.4 per cent lower than the corresponding revenues, received in 2010.
405.8 418.0 392.2 346.8 295.4 264.8
1 002.7 1 071.5 970.2 742.4 562.4 437.8
2006 2007 2008 2009 2010 2011 Retail fixed telephone communication voice services Retail mobile telephone communication voice services Figure 31. The structure of the revenues of the voice services sector, measured by the revenues for provision of public mobile and fixed telephone communication voice services in 2006–2011, LTL million Source: RRT
The voice services market, measured by the duration of the calls, originated by the subscribers (including the calls by the subscribers of the services, provided in Lithuania and used roaming services), retained the trend of growth in 2011 (see Figure 32). During the time period of 2003–2011 the duration of calls grew 2.6 times, i. e. from 3 330.8 up to 8 713 million minutes. The duration of calls, originated in each year of the 2003–2011 time period was longer than in the previous year however the traffic growth rates slowed down.
24.2 % 9000 25% 20% 6000 15.5 % 15.6 % 14.0 % 12.3 % 11.6 % 15%
6.3 % 10% 3000 3.9 % 5% 3 330.8 4 137.7 4 779.5 5 524.0 6 295.8 7 071.0 7 519.5 8 389.7 8 713.0 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 Voice calls traffic Growth of traffic Figure 32.The dynamics of the size of the voice services market, measured by the duration of calls, million minutes and the market growth speed, per cent in 2003–2011 Source: RRT
Evaluating the structure of the voice services market in terms of the duration of calls, one can see that in each year of the time period of 2003–2011 an increasing number of calls was originated by the public mobile communication voice services subscribers, while the number of calls, originated by the public fixed communication voice services subscribers was reducing. The traffic of voice calls, originated by mobile communication subscribers amounted to 83.7 per cent of all the voice calls, originated in 2011 (see Figure 33). Compared to 2010, in 2011 the duration of the calls, originated by the mobile communication subscribers, grew by 6.3 per cent and the duration of calls, originated by the fixed telephone communication subscribers, reduced by 7.2 per cent.
26 Lithuanian Communications Sector 2011
2011 7 290.2 1 422.8 2010 6 855.8 1 533.9 2009 5 926.8 1 592.7 2008 5 408.9 1 662.2 2007 4 628.6 1 667.2 2006 3 795.6 1 728.4 2005 2 981.9 1 797.6 2004 2 399.5 1 738.2 2003 1 844.4 1 486.4
The traffic of the originated mobile communication voice calls The traffic of the originated fixed communication voice calls
Figure 33. The structure of the voice services sector, measured by the duration of calls in 2003–2011, million minutes Source: RRT
The growing competition between the providers of public mobile and fixed communication voice services resulted in the reduction of the prices of the voice services for the end service users. In 2011 the average price of a mobile telephone call reduced by 26.8 per cent, i. e. from 8.2 ct per minute (in 2010) down to 6 ct per minute (in 2011). The average price of a fixed call reduced by 11.7 per cent, i. e. from 7.7 ct per minute (in 2010) down to 6.8 ct per minute (in 2011). The reduction of the revenues for the public mobile communication voice service amounted to 22.2 per cent and the duration of the calls, originated by the subscribers of the said services grew by 6.3 per cent during the same period. However even the reduction of prices on the public fixed telephone communication voice market failed to encourage growth of traffic of the originated calls: in 2011 the revenues for the public fixed telephone communication voice services reduced by 10.4 per cent, the duration of the calls, originated by the fixed telephone communication subscribers reduced by 7.2 per cent.
Public mobile telephone communication voice services
Subscribers. At the end of 2011 the public mobile telephone communication voice services were ii used by 4.94 million active subscribers , i. e. 1 per cent more than at the end of 2010 (see Figure 34). During 2011 the penetration of active public mobile telephone communication subscribers grew by 3.6 percentage points and there were 154.3 subscriber identification module (SIM) cards per 100 residents.
139.4 % 146.2 % 149.9 % 149.0 % 150.7 % 154/3 % 6000 127.9 % 160 %
4000 89.2 % 61.0 % 90 % 2000 2 102.2 3 051.1 4 353.4 4 718.2 4 921.1 5 022.6 4 961.5 4 891.0 4 938.0 0 20 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Number of subscribers Penetration Figure 34. The number of active mobile telephone communication subscribers, thousand and the penetration, per cent, in 2003–2011 Source: RRT
ii An active subscriber is a subscriber, who, during the time period of the previous three months, has initiated a telecommunication event (originated a call, sent a short text message or used another service).
27 Lithuanian Communications Sector 2011
ARPU. The average revenues per unit (ARPU) for the public mobile telephone communication voice services amounted to LTL 7.4 in 2011, which was 22.9 per cent less than in 2010. The total (i. e. not only for the voice services) mobile telephone communication services revenues per one subscriber per month reached LTL 15.9 in 2011 (i. e. were more than two times larger than the ARPU for the mobile telephone communication voice services) and reduced by 5.4 per cent during the year (see Figure 35).
17.7 21.9 18.1 23.5 16.1 22.6 12.5 18.9 9.6 16.8 7.4 15.9
2006 2007 2008 2009 2010 2011
The ARPU for the mobile telephone communication voice services The ARPU for all the mobile telephone communication services
Figure 35. The ARPU for the mobile telephone communication voice services and for all the mobile telephone communication services in 2006–2011, LTL Source: RRT
The duration and structure of calls. During 2011 the active mobile telephone communication subscribers of Lithuania originated 99.6 per cent of all the mobile telephone communication voice calls on the territory of the Republic of Lithuania and only 0.4 per cent of all the calls were originated in foreign countries, where the mobile telephone communication subscribers of the operators, functioning on the territory of the Republic of Lithuania, used roaming services. Evaluating the calls, originated on the public mobile telecommunication networks during the time period of 2003–2011, the calls, originated in 2011, reached the record breaking level both in terms of duration (29.1 million minutes) and the growth rate (28.8 per cent) (see Figure 36). The growth of the calls was also encouraged by the increased duration of private and business trips to foreign countriesiii and by the reduction of prices of roaming calls starting from 1 July, 2011.8
28.8 % 30 19.1 % 16.2 % 17.1 % 15.1 % 30 % 5.1 % 8.3 % 10 % 20 -17.9 % -10 % 13.0 13.7 16.3 18.9 22.1 25.5 20.9 22.6 29.1 10 -30 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Traffic Change Figure 36. The duration of the calls, originated by the Lithuanian users of mobile telephone communication voice services, visiting foreign countries, million minutes and the rate of growth of traffic, per cent in 2003–2011 Source: RRT
The dynamics of the duration of public mobile telephone communication calls, originated on the territory of the Republic of Lithuania in 2003–2011 show the still developing demand for mobile telephone communication voice services (see Figure 37). The number of mobile telephone communication calls, originated on the territory of the Republic of Lithuania during 2011 was 6.3 per cent larger than in 2010. The duration of the mobile telephone communication calls, originated during 2011, reached 7 261.1 million minutes. However the rate of growth of the traffic of mobile telephone communication calls, originated during the entire time period of 2003–2011 reduced: during 2011 the growth speed dropped by 9.4 percentage points. iii Compared to 2010, in 2011 the number of overnight stays of the residents of Lithuania (both private and business related) in foreign countries increased by 9 per cent. Source: Statistics Lithuania.
28 Lithuanian Communications Sector 2011
7200 25.7 % 24.3 % 27.4 % 30 % 22.0 % 16.9 % 15.7 % 20 % 3600 9.7 % 6.3 % 10 % 1 898.0 2 386.3 2 965.7 3 776.8 4 606.5 5 383.4 5 905.9 6 833.2 7 261.1 0 0 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Traffic Change Figure 37. The dynamics of the traffic of public mobile telephone communication traffic, originated on the territory of the Republic of Lithuania, million minutes and the traffic growth rate, per cent in 2003–2011 Source: RRT
The structure of the public mobile telephone communication traffic, originated on the territory of the Republic of Lithuania includes the calls, terminated on own network, on other public mobile communication networks, on public fixed communication networks and on foreign operators’ networks. Evaluating the structure of mobile telephone communication traffic, originated on the territory of the Republic of Lithuania in 2011, one can see that the duration of calls, made both inside own network and to other networks, has grown (see Figure 38). 72.8 per cent of all the mobile telephone communication calls were terminated on own network. During the year the duration of calls inside own network grew by 2.3 per cent, the duration of calls to fixed communication networks – by 17.7 per cent and the duration of calls to foreign operators’ networks – by 15.2 per cent. The calls, terminated on other mobile communication networks grew most during 2011 (by 18.8 per cent). The rates of growth of the traffic to public fixed communication networks also grew. Most likely the said trends have become prominent as the result of the intensified competition and the reduction of network externalities.iv
4 400.9 5 165.7 5 283.1 2 741.6 3 372.5 3 940.3 6561 1 575.7 1 997.6 400 2187 350 729 300 870/4 1 051/0 1 768.2 243 662.1 807.8 1 246/7 1 326.2 1 487.9 250 81 137.8 200 108.8 110.7 114.9 112.3 117.1 27 104.6 104.5 150 9 100 81.5 71.9 3 39.7 55.7 60.3 72.3 66.5 62.4 50 1 0 2004 2005 2006 2007 2008 2009 2010 2011 Terminated on own network Terminated on other mobile communication networks Terminated on fixed communication networks Terminated on foreign operators' networks Figure 38. The structural dynamics of the public mobile telephone calls, originated on the territory of the Republic of Lithuania in 2004–2011, million minutes Source: RRT
The calls, terminated on other mobile communication networks in 2011 amounted to 24.4 per cent (21.8 per cent in 2010) of the total of the mobile communication traffic, originated on the territory of the Republic of Lithuania. The calls, terminated on fixed communication networks, amounted to 1.9 per cent (1.7 per cent in 2010) of the calls, originated on the mobile communication networks however the share of calls, made by the Lithuanian users of mobile communication voice services to foreign countries was even smaller – such calls amounted to 1 per cent of all the mobile communication voice calls. iv Network externalities increase when the operator, in order to attract the largest number of users possible to its networks, applies prices for calls inside its own network, lower than those, applied for the calls to other networks and, on the contrary, reduces when the difference between the prices for the calls, made inside own network and the calls to other networks reduces.
29 Lithuanian Communications Sector 2011
Competitive aspects. In 2011 14 undertakings were engaged in public mobile communication networks and/or public mobile telephone communication service activities, i. e. one more than in the previous year.v When analyzing the competitive aspects of the mobile telephone communication voice services market, it is viable to evaluate the dynamics of the market shares of individual providers of mobile telephone communication voice services by measuring the market shares by revenues and the duration of calls. The market shares, occupied by the providers of mobile telephone communication voice services in 2011, measured by the revenues and the duration of calls, were distributed unevenly. The largest amount of revenues for voice services (including the revenues for the calls, received from the subscribers, using roaming services), was received by Tele2 UAB (33.7 per cent), Omnitel UAB was not far behind (33 per cent) with its share of revenues reducing by 5 percentage points during 2011. The market share, lost by Omnitel UAB, was shared by the other two operators: Tele2 UAB occupied 33.7 per cent of the market, i. e. 1.7 percentage points more than in 2010 and Bitė Lietuva UAB – 29.9 per cent, i. e. 2.5 percentage points more than in the previous year. Other providers of mobile telephone communication voice services in other operators’ networks jointly received 3.3 per cent of all the revenues for the mobile telephone communication voice services during 2011. In 2011 the largest share of mobile telephone calls (including the calls, originated by the subscribers, visiting foreign countries), was originated by the subscribers of Tele2 UAB, which amounted to 43.2 per cent of the mobile telephone communication voice services market, measured by the duration of calls (see Figure 39). The duration of calls, originated by the subscribers of Omnitel UAB during 2011 reached 2 299.7 million minutes, i. e. 31.5 per cent of the total duration of all the mobile communication voice calls, originated in 2011. The duration of the calls, originated by the subscribers of Bitė Lietuva UAB amounted to 22.6 per cent (1 652.3 million minutes) and other service providers of mobile telephone communication voice services in other operators’ networks shared 2.7 per cent of the market. Compared to 2010, in 2011 the share of the mobile telephone communication voice services market, occupied by Tele2 UAB, measured in terms of the duration of calls, grew by 2.2 percentage points, the market share, occupied by Omnitel UAB, reduced almost to the same extent, i. e. by 1.9 percentage points, the market share of Bitė Lietuva UAB reduced insignificantly, i. e. by half of a percentage point.
2011 31.5 % 22.6 % 43.2 % 2.7%
2010 33.4 % 23.1 % 41.0 % 2.5%
2009 36.3 % 22.6 % 38.0 % 3.1%
2008 36.4 % 24.4 % 35/.8 % 3/4%
2007 41.4 % 26.6 % 29/1 % 2/9%
2006 45.4 % 26.9 % 25.4 % 2/3%
Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other providers Figure 39. The market shares, occupied by the public mobile telephone communication operators according to the duration of calls in 2006–2011, per cent Source: RRT
v The list of providers of electronic communications networks and services can be found at: http://rrt.lt/rrt/lt/verslui/salygos- veiklai/paslaugu-teikejai.html
30 Lithuanian Communications Sector 2011
Such a difference of structures of the mobile telephone communication voice services market, measured in terms of revenues and the duration of calls, can be explained by the differences of the prices, applied by operators. The average price of voice calls, applied by Tele2 UAB (calculated as the relation between the revenues and the duration of calls) was 4.7 ct per minute (1.7 ct per minute less than in 2010), the price, applied by Bitė Lietuva UAB reduced by 1.8 ct per minute in 2011 and was equal to 7.9 ct per minute. The average price of voice calls, applied by Omnitel UAB dropped most during 2011 i. e. by 3 ct per minute and was equal to 6.3 ct per minute. In 2011 the largest shares of the voice services market, occupied by Lithuanian mobile communications operators and service providers according to the origin of calls and measured by the duration of calls (with the exception of the calls, made by the subscribers, visiting foreign countries)vi were occupied by all the three major mobile communication operators. The subscribers of Tele2 UAB made most calls in the own network during the year, which amounted to 48.2 per cent of the market of calls in the own network (see Figure 40). It should be noted that the calls amounted to 81.2 per cent of all the calls, originated on the network of Tele2 UAB. Omnitel UAB occupied 30 per cent of the market of calls in the own network – the calls, made by the subscribers of the said undertaking inside the own network (1 583.75 million minutes) amounted to 69.2 per cent of all the calls, originated on the network of Omnitel UAB. Bitė Lietuva UAB occupied 20.4 per cent of the market of calls inside the own network. The calls amounted to 65.6 per cent of all the calls, originated on the network of Bitė Lietuva UAB. As in the previous year, in 2011 the largest part of the calls, terminated on networks of other operators of the Republic of Lithuania were the calls, originated on the network of Omnitel UAB, in which 35.8 per cent of the calls, terminated on other public mobile communication networks and 36.6 per cent of calls, terminated on public fixed communication networks were initiated in 2011. 39.9 per cent of calls to foreign countries were originated on the network of Bitė Lietuva UAB (28.7 million minutes).
Terminated on own network 30.0 % 20.4 % 48.2 % 1.4 %
Terminated on other mobile communication networks 35.8 % 28.4 % 29.5 % 6.3 %
Terminated on fixed communication networks 36.6 % 24.3 % 34.9 % 4.2 %
Terminated on foreign operators' networks 30.2 % 39.9 % 25.6 % 4.4 %
Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other providers Figure 40. The market shares, occupied by the public mobile telephone communication networks operators, measured by the duration of calls, against the destination of calls in 2011, per cent Source: RRT
The structure of the mobile telephone communication voice services market is still under development: the shares of the market of calls in the own network, occupied by Omnitel UAB and Tele2 UAB, measured by the duration of calls, retained the same trends of change: the market share of Omnitel UAB reduced and the share of Tele2 UAB increased. The share of the market of calls in the own network, occupied by Bitė Lietuva UAB, changed the slowest (see Figure 41). The largest share of the market of calls in the own network was occupied by Tele2 UAB (48.2 per cent) and the smallest – by Bitė Lietuva UAB (20.4 per cent). vi The data on the calls, made by the Lithuanian users of mobile telephone communication voice services, visiting foreign countries, are not structured according to the location of call termination.
31 Lithuanian Communications Sector 2011
2011 30.0 % 20.4 % 48.2 % 1.4 % 2010 32.1 % 21.4 % 45.3 % 1.3 % 2009 35.5 % 20.9 % 41.7 % 1.9 % 2008 36.1 % 22.9 % 38.8 % 2.3 % 2007 42.2 % 25.2 % 30.6 % 2.0 % 2006 46.7 % 25.2 % 26.3 % 1.9 % 2005 50.4 % 25.9 % 23.8 %
Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other providers Figure 41. The shares of the market of calls in the own network, occupied by the operators on the public mobile telephone communication market against the duration of calls in 2005–2011, per cent Source: RRT
In 2011 the leader of the roaming services, when the subscriber makes calls while being in a foreign country remained Omnitel UAB, which occupied 36.3 per cent of the roaming services market, measured by the duration of calls, i. e. 5.4 percentage points less than in 2010. The share of the roaming services market, occupied by Bitė Lietuva UAB, also reduced by 5.3 percentage points and amounted to 32.2 per cent. The smallest market share in 2011 was occupied by Tele2 UAB (29.1 per cent) however it is not far behind the other two operators: during the last year the share of the roaming services market, occupied by Tele2 UAB grew by 11 percentage points and the market shares, occupied by Omnitel UAB and Bitė Lietuva UAB reduced correspondingly by 5.4 and 5.3 percentage points. Compared to 2010, in 2011 the subscribers of all the three major mobile communication operators made more calls per month on the average (see Figure 42). The average duration of the calls, made per month by one active subscriber of Tele2 UAB grew most (by 9.4 per cent) and reached 142.2 minutes per month. The growth of the same indicator with regard to the Omnitel UAB was the smallest in 2011 (1.5 per cent – 99.9 minutes per month). The average duration of calls, made by one active subscriber of Bitė Lietuva UAB per month grew by 2.5 per cent and reached 129.1 minutes per month.
3 2 0 1 0 0 2 8 5 8 4 8 0
......
6 5 3 4 9 5 5 5 8 0 8 5
......
90 83 82 98 99 95 64 85 88 79 89 99
109 110 126 129 101 130 142 126 137 140 146 116 123
Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other providers All the providers of mobile telephone communication 2007 2008 2009 2010 2011 services Figure 42. The average of the traffic, originated by one subscriber of public mobile telephone communication services per month in 2007–2011, minutes per month Source: RRT
The motives behind the subscribers’ choice. When evaluating the ways the average price of voice services, applied by public mobile telephone communications operators had the influence on the amount of service, received by one active subscriber per month on the average (measured by the duration and revenues), one can see that a subscriber of Tele2 UAB made the largest amount of calls per month (142.2 minutes per month) for the lowest average price of a voice call, which reached 4.7 ct per minute (calculated as the relation between the revenues and the duration of calls). A subscriber of Omnitel UAB made 29.2 per cent less calls per month on the average than a subscriber of Bitė Lietuva UAB, i. e.
32 Lithuanian Communications Sector 2011
99.9 minutes per month and 129.1 minutes per month although the average price of calls, applied by Omnitel UAB (6.3 ct per minute) was smaller than the average price, applied by Bitė Lietuva UAB (7.9 ct per minute). The largest ARPU for the voice services in 2011 was received by Bitė Lietuva UAB (LTL 10.3 per month). The ARPU for the voice services, received by Omnitel UAB (LTL 6.3) was 38.8 per cent smaller and the ARPU, received by Tele2 UAB (LTL 6.7 per month) – 35 per cent smaller than the ARPU, received by Bitė Lietuva UAB. Such distribution shows that the subscribers of different operators chose the services according to different motives and the price was not necessarily the most important factor, encouraging or reducing the use or determining the choice of the service provider. The choice of subscribers can also be evaluated by analyzing the flows of transfer of numbers from the network of one operator to another operator’s network (see Table 1). During the time period of 2006– 2011 the number portability service in the mobile telephone communication networks was used by 668.6 thousand subscribers. In 2011 the service was used by 104.6 thousand subscribers. As in 2010, in 2011 the majority (40.3 per cent) of all numbers were transferred from the network of Omnitel UAB, i. e. 42.1 thousand numbers, 32.2 thousand numbers were transferred from the network of Bitė Lietuva UAB (30.8 per cent of all the numbers, transferred to other networks) and 26.5 thousand numbers were transferred from the network of Tele2 UAB, i. e. 25.3 per cent of all the subscribers, who used the number portability service.
Table 1. The number portability flows between the public mobile telephone communication operators in 2011, per cent
To other operators’ 2011 To Omnitel UAB To Bitė Lietuva UAB To Tele2 UAB networks From Omnitel UAB 35.7 % 59.2 % 5.1 % From Bitė Lietuva UAB 51.3 % 43.3 % 5.4 % From Tele2 UAB 62.4 % 30.8 % 6.8 % Source: RRT
The largest share of users of the network of Omnitel UAB (59.2 per cent), who used the number portability service in 2011, chose the services of Tele2 UAB however a large share (35.7 per cent) of subscribers of Omnitel UAB chose the services of Bitė Lietuva UAB. 51.3 per cent of former subscribers of Bitė Lietuva UAB and 62.4 per cent of former subscribers of Tele2 UAB chose to become subscribers of the network of Omnitel UAB. The largest share (6.8 per cent) of the subscribers of Tele2 UAB however the largest number of subscribers of Omnitel UAB (2.1 thousand), who decided to transfer their mobile telephone numbers to another network, chose the services, provided not by the major, but by other providers of mobile telephone communication services.
Public fixed telephone communication voice services
Subscribers. The number of fixed telephone communication subscribers reduced during the time period from 2007 to 2011 and, during 2011, the number reduced by 5.2 per cent. The fixed communication penetration also reduced – at the end of 2011 there were almost 22 subscribers of fixed telephone communications per 100 residents (see Figure 43).
33 Lithuanian Communications Sector 2011
850 23.5 % 23.4 % 23.7 % 23.4 % 24 % 22.5 % 22.6 % 800 23 % 750 21.7 % 22 % 700 21 % 650 801.1 792.4 799.4 784.9 747.4 733.7 695.8 600 20 % 2005 2006 2007 2008 2009 2010 2011 Number of subscribers Penetration
Figure 43. The number of fixed telephone communication subscribers, thousand and the penetration, per cent in 2005–2011 Source: RRT
ARPU. The average revenues (ARPU) per unit for both retail public fixed telephone communication voice services and for all the public fixed telephone communication services, received from one subscriber per one month of 2011, also reduced in 2011. During 2011 the ARPU for the retail public fixed telephone communication voice services reduced by 6.9 per cent, i. e. by LTL 2.3 and amounted to LTL 31. The revenues, received for all the public fixed telephone communication services per one subscriber reduced by 7 per cent or by LTL 2.4 during the same period and amounted to LTL 31.7 (see Figure 44). The small difference (2.2 per cent) between the ARPU of the public fixed telephone communication voice services and all the public fixed telephone communication services shows that the services, other than voice services, amount to an insignificant share of the public fixed telephone communication services.
32.9 44.8 42.3 43.0 41.5 42.3 38.1 39.0 33.3 34.1 31.0 31.7
2006 2007 2008 2009 2010 2011 ARPU for fixed communication voice services ARPU for all the fixed telephone communication services Figure 44. The ARPU for the public fixed telephone communication voice services and for all the public fixed telephone communication services in 2006–2011, LTL Source: RRT
The calls traffic and structure. In 2011 the end users of public fixed telephone communication voice services talked for 1 422.8 million minutes, i. e. 7.2 per cent less than in 2010 (see Figure 45). In the structure of the market of all the public fixed telephone communication voice services the largest share of the originated calls (88 per cent) is occupied by the calls, originated and terminated on the own network. The duration of the said calls, which include local and national long-distance calls as well as calls to short telephone numbers (with the exception of the calls with the pre-selection numbers 10XX), reduced the most during 2011, i. e. by 9.5 per cent, the duration of other public fixed telephone calls increased. Compared to 2010, in 2011 the duration of calls to other fixed telephone communication networks grew most, i. e. by 21 per cent and amounted to 2.7 per cent in the total structure of the originated fixed telephone calls. The public fixed telephone communication traffic to the public mobile communication networks grew by 14.8 per cent in 2011 and amounted to 5.3 per cent of all the calls, originated on the fixed telephone communication networks. The duration of calls to foreign operators’ networks also grew by 8.3 per cent, in 2011 the share of the traffic in the total structure of the calls, originated on the fixed telephone communication networks amounted to an insignificant share of 3.9 per cent. The reduction of the share of the market of calls in own network, with the increase of the traffic of calls to other networks, allows for a conclusion on intensifying competition between the providers of both public mobile communication voice services and public fixed communication voice services as well as on the reducing network externalities.
34 Lithuanian Communications Sector 2011
1 594.6 1 638.6 1 573.9 1 507.7 1 504.0 120 1 447.3 1 384.3 1650 1 252.7 100 86.2 94.3 1320 83.7 81.5 80 76.9 76.0 62.8 66.2 990 60 56.1 660 40 54.3 52.6 51.5 50.4 47.2 51.8 45.4 38.0 26.6 31.0 35.4 31.4 330 20 18.9 6.9 10.2 0 0 2004 2005 2006 2007 2008 2009 2010 2011 Terminated on mobile telephone communication networks Terminated on other fixed telephone communication networks Terminated on foreign operators' networks Terminated on own network
Figure 45. The structural dynamics of the traffic, originated on the public fixed telephone communication market in 2004-2011, million minutes Source: RRT
Competitive aspects. When examining the competitive aspects on the public fixed telephone communication voice services market, it is viable to evaluate the dynamics of the market shares, occupied by the incumbent operator TEO LT, AB and other public fixed telephone communication voice service providers, measured by the revenues and the duration of calls. In 2011 public fixed telephone communication services were provided by 52 undertakings. 38 undertakings stated that they provided public fixed telephone communication voice services by using the Internet Protocol (IP) (including 19, providing their services by cable television and data communication networks). 20.8 per cent of the total revenues, received for provision of voice services in 2001 and 93.2 per cent of the revenues, received for provision of public fixed telephone communication voice services, were received by TEO LT, AB. The said revenues amounted to LTL 252.5 million. 87.6 per cent of the revenues for the provision of retail IP telephony services were received by other providers of public fixed telephone communication voice services, who also shared 34.9 per cent of all the services, received from the sales of pre-payment cards, including the revenues for the calls, made by public payphones. The duration of the fixed telephone calls, originated on the network of TEO LT, AB in 2011, reached 1 345.4 million minutes, which amounted to 94.6 per cent of the market of all the public fixed telephone communication voice services. The share of the public fixed telephone communication voice services market, occupied by TEO LT, AB, measured by the duration of calls, has changed insignificantly – since 2007 it reduced by 2 percentage points. The calls, originated by the subscribers of TEO LT, AB during 2011, in terms of duration, amounted to 15.4 per cent of the voice services market. In 2011 TEO LT, AB also was the market leader in terms of the calls, made in the own network. It occupied 98.9 per cent of the market (see Figure 46). The subscribers of the public fixed telephone communication services, provided by other providers originated 42.8 per cent of all the international calls, originated in 2011 – the calls amounted to 31.1 per cent of the total of the traffic of calls, originated by other providers. Other service providers occupied the larger, i. e. 62 per cent share of the market of fixed communication calls to other fixed communication networks. Compared to 2010, in 2011 the subscribers of providers of other public fixed telephone communication services originated 20.5 per cent of all the fixed telephone communication calls to mobile telephone communication networks.
35 Lithuanian Communications Sector 2011
2011 57.2 % 42.8 %
2010 66.1 % 33.9 %
2009 68.7 % 31.3 %
2008 67.7 % 32.3 %
operators' networks operators' 2007 67.7 % 32.3 % Terminated on foreign on Terminated 2011 38.0 % 62.0 %
2010 35.6 % 64.4 %
2009 26.9 % 73.1 %
networks 2008 26.0 % 74.0 %
2007 20.9 % 79.1 %
Terminated on other on Terminated fixed communication fixed 2011 79.5 % 20.5 %
2010 80.3 % 19.7 %
2009 87.4 % 12.6 %
networks 2008 89.5 % 10.5 % communication
2007 91.9 % 8.1 % Terminated on mobile on Terminated 2011 98.9 % 1.1 %
2010 99.0 % 1.0 %
2009 99.2 % 0.8 %
network 2008 99.2 % 0.8 %
Terminated on own on Terminated 2007 99.2 % 0.8 %
TEO LT, AB Other providers Figure 46. The dynamics of market shares, occupied by the providers of public fixed telephone communication services in terms of the traffic and destination of the originated calls in 2007–2011, per cent Source: RRT
Number portability. Till the end of 2011 the service of transfer of numbers from one public fixed telephone communication network to another was used 22.3 thousand times. During 2011 the service was provided 5.3 thousand times, during 2010 – 2.8 thousand times. To summarize the conclusion can be made that TEO LT, AB remains the leader in most segments of the public fixed telephone communication voice services market, other providers of public fixed telephone communication voice services actively participate in the international calls and IP telephony segments. The reduction of the share of calls in the own network, with the increase of the traffic to other networks, allows for the conclusion on the intensifying competition between the providers of public mobile and fixed communication voice services and the processes of convergence of the said services.
Summary
At the end of 2011 voice services were provided by 60 providers, including 14 providing public mobile telephone communication voice services and 52 – public fixed telephone communication voice services. In 2011 the revenues of all the 60 providers of voice services, received for provision of voice services amounted to 29.3 per cent of all the electronic communication market revenues and amounted to LTL 702.6 million.
36 Lithuanian Communications Sector 2011
At the end of 2011 the penetration of public mobile telephone communication in Lithuania reached 154.3 subscribers per 100 residents, i. e. 3.6 percentage points more than in 2010. At the end of 2011 there were 21.7 public fixed communication lines per 100 residents, i. e. 0.9 percentage point less than in 2010. Compared to 2010, in 2011 the duration of public mobile telephone communication calls in own network grew by 2.3 per cent, the duration of calls to fixed telephone communication networks – by 17.7 per cent, to foreign countries’ networks – by 15.2 per cent. The greatest growth (18.8 per cent) in 2011 was observed with regard to the calls, terminated on other mobile telephone communication networks. Compared to 2010, in 2011 the public fixed telephone communication traffic to public mobile telephone communication networks grew by 14.8 per cent, the duration of calls to foreign operators’ networks– by 8.3 per cent, while the duration of calls of fixed telephone calls in own network reduced by 9.5 per cent. The duration of calls to other public fixed telephone communication networks grew the most, i. e. by 21 per cent. Less than half of the total ARPU on the mobile communications market, which reached LTL 15.9, was the revenues for the mobile telephone communication voice services (LTL 7.4) and the total fixed communication market ARPU (LTL 31.7) was not so much different, compared to the revenues, received from provision of fixed telephone communication voice services (LTL 31). Evaluating the competitive aspects of the voice services market, it is worth mentioning that of all the mobile communication operators Tele2 UAB originated the largest number of calls (43.2 per cent) in own network in 2011. Tele2 UAB was also the undertaking which received the largest amount of revenues for mobile communication voice calls (33.7 per cent). The fixed telephone communication calls, originated in 2011 by TEO LT, AB, according to duration, amounted to 94.6 per cent of all the fixed telephone communication voice services. Other providers of fixed telephone communication voice services participated in the international calls and IP telephony segments more actively.
37 Lithuanian Communications Sector 2011
2.2. SMS and MMS
Short message service – SMS
The high popularity of the short message service (SMS) is influenced by the continuously expanding purpose of the service. Today short messages are increasingly more frequently used for both communicating and ordering and purchasing different services: bus schedules, downloading of paid games, payment for vehicle parking, televoting, etc. The large traffic of SMS is also determined by the convenience of use of the service. Although the number of sent SMS has been reducing insignificantly since 2007, the short text messaging service still remains sufficiently popular in Lithuania – 7.9 billion SMS was sent in 2011, however the said number is 6.2 per cent less than in 2010 (see Figure 47). The messages, sent in the own network, i. e. the messages, sent and received by the subscribers of the same public mobile communication network operator, amounted to 90.1 per cent of all the messages, sent in 2011. In each month of 2011 one active mobile telephone communication subscriber sent 134 short messages on the average, i. e. 10 SMS less than in 2010. One subscriber sent 4 SMS per day. It is likely that the SMS messages gave way to the voice calls, which became cheaper and electronic messages, the sending of which over mobile telephone communication networks has been becoming more and more popular as the result of the increased demand for smartphones.
1 387.6 4 939.4 9 033.6 9 373.3 9 372.6 9 235.5 8 439.7 7 914.7
2004 m. 2005 m. 2006 m. 2007 m. 2008 m. 2009 m. 2010 m. 2011 m. Figure 47. The number of SMS messages, sent in 2004–2011, million Source: RRT
Compared to 2010, the revenues, received for the sent SMS in 2011, reduced by 16.8 per cent and amounted to LTL 79.3 million or 8.4 per cent of the total revenues of the mobile telephone communications market (see Figure 48). Such SMS market share, measured by revenues, in 2011 was the smallest in the total mobile communications revenues structure during the entire period of 2005–2011.
150 20%
11.4 % 11.6 % 9.7 % 100 10.1 % 10.3 % 11.1 % 8.4 % 10% 50 119.1 140.9 143.1 150.9 131.0 95.3 79.3 0 0% 2005 2006 2007 2008 2009 2010 2011 Revenues Share of the revenues in the mobile communications revenue structure Figure 48. The revenues, received for the SMS, sent in 2005–2011, LTL million (w/o the VAT) and their share on the mobile communications market, per cent Source: RRT
38 Lithuanian Communications Sector 2011
Since 2007 the subscribers of Tele2 UAB sent the largest number of all the SMS each year (see Figure 49). In 2011 the subscribers of Tele2 UAB sent 3.22 billion SMS (3.9 per cent less than in 2010), which amounted to 40.7 per cent of all the SMS, sent in 2011. 32.3 per cent of all the SMS was sent from the network of Bitė Lietuva UAB, which amounted to 2.56 billion short text messages or 2.3 per cent less than in 2010. Compared to 2010, in 2011 the market share, occupied by Omnitel UAB in terms of the number of SMS, reduced by 2.3 percentage points and amounted to 26.7 per cent of all the SMS. The number of SMS, sent by the subscribers of Omnitel UAB, reduced by 13.5 per cent and amounted to 2.12 billion SMS. In each year of the time period of 2007–2011 the market share, occupied by Omnitel UAB in terms of the number of SMS reduced by 1.8 percentage points on the average and the market shares of Tele2 UAB and Bitė Lietuva UAB each grew by 1.7 and 0.1 percentage points on the average.
2011 26.7 % 32.3 % 40.7 % 0.3 %
2010 29.0 % 31.0 % 39.7 % 0.3 %
2009 33.0 % 27.1 % 39.6 % 0.2 %
2008 34.4 % 23.9 % 41.5 % 0.2 %
2007 35.5 % 25.9 % 38.4 % 0.2 %
2006 35.8 % 31.7 % 32.3 % 0.1 %
2005 35.3 % 36.4 % 28.2 % 0.2 %
Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other mobile communications providers Figure 49. The structure of the SMS market in terms of the number of SMS, sent in 2005–2011, per cent Source: RRT
In 2011 one subscriber of Bitė Lietuva UAB send the largest number of short text messages – 200 messages per month on the average (8 messages less than in 2010), one subscriber of Tele2 UAB sent 146 messages per month on the average (9 less than in 2010) and one subscriber of Omnitel UAB – 92 messages (13 less than in 2010).
Multimedia messaging service – MMS
The popularity of MMS, send over mobile telephone communications networks in Lithuania during the time period of 2007–2009 reduced to a certain extent. Compared to 2010, the number of MMS, sent during 2011 was 2.7 per cent smaller, i. e. 5.8 million MMS was sent in 2011 and almost 6 million was sent in 2010 (see Figure 50). In 2011 one active mobile communications subscriber sent 0.098 MMS per month on the average, i. e. almost each tenth active subscriber sent one MMS per month. In addition, 86 per cent of the senders and recipients of all the MMS, sent during 2011 were subscribers of the same public mobile telephone communication network.
39 Lithuanian Communications Sector 2011
2011 5 801.8 2010 5 965.4 2009 5 529.6 2008 5 623.2 2007 5 765.3 2006 4 019.6 2005 3 339.3 2004 2 609.2
Figure 50. The number of MMS, sent in 2004–2011, thousand Source: RRT
In 2011 the biggest amount of MMS was sent by the subscribers of Tele2 UAB (3.13 million) however the market share of the operator reduced by 8.9 percentage points during the year and amounted to 54 per cent of all the sent MMS (62.9 per cent in 2010). The market share of Omnitel UAB, measured in terms of the sent MMS, increased by 8.8 percentage points and amounted to 28.8 per cent. The market share of Bitė Lietuva UAB reduced by 0.1 percentage point, i. e. from 16 per cent (in 2010) to 15.9 per cent (in 2011). LTL 1.32 million was received for the sent MMS in 2011, i. e. 5.2 per cent more than in 2010 (see Figure 51). Although the subscribers of Tele2 UAB sent the biggest number of MMS, the largest share of revenues, received for MMS messages in 2011 (50 per cent) was received by Bitė Lietuva UAB, whose subscribers sent the smallest amount of MMS (925 thousand).
0.56 0.96 1.33 1.24 1.33 1.35 1.42
2005 2006 2007 2008 2009 2010 2011
Figure 51. The revenues, received for the MMS, sent in 2005–2011, LTL million Source: RRT
Summary
Compared to 2010, the revenues for the sent SMS, received in 2011, reduced to 16.5 per cent and amounted to LTL 79.3 million. 7.91 billion SMS, i. e. 6.2 per cent less than in 2010 was sent in 2011. It is likely that the SMS messages gave way to the voice calls, which became cheaper and electronic messages, the sending of which over mobile telephone communication networks has been becoming more and more popular as the result of the increased demand for smartphones. The biggest amount, i. e. 40.7 per cent of all the SMS, sent during the year, was sent by the subscribers of Tele2 UAB, which amounted to 3.22 billion SMS. In 2011 Omnitel UAB occupied the smallest share of the SMS market (26.7 per cent). The subscribers of Bitė Lietuva UAB sent 32.3 per cent of all the SMS.
40 Lithuanian Communications Sector 2011
In each month of 2011 one active mobile telephone communications subscriber sent 134 SMS on the average. The biggest amount of short messages was sent by one subscriber of Bitė Lietuva UAB, i. e. 200 messages per month. One subscriber of Omnitel UAB sent 92 messages per month and one subscriber of Tele2 UAB sent 146 SMS per month on the average. 5.8 million MMS was sent totally during 2011 (almost 6 million in 2010), i. e. almost each tenth active subscriber sent 1 MMS per month on the average. In 2011 subscribers of Tele2 UAB sent the biggest amount of MMS (54 per cent). LTL 1.42 million of revenues was received for the sent MMS, i. e. 5.2 per cent more than in 2010. Half of the revenues were received by Bitė Lietuva UAB.
2.3. Networks Interconnection
In the context of the present Report the networks interconnection services include such services as origination and termination of calls, provided in the public fixed and mobile communications networks, call transit, if necessary, as well as the roaming mobile services, provided to subscribers of foreign public mobile service providers, visiting the Republic of Lithuania.
General market overview
The networks interconnection market remains among the most significant parts of the electronic communications sector. In 2011 the revenues from the network interconnection activities amounted to LTL 427.9 million (see Figure 52). In the overall structure of revenues of the electronic communications sector the revenues from the networks interconnection activities amounted to 17.9 per cent and, compared to 2010, reduced by 3.5 percentage points. During the time period of 2003–2008 the networks interconnection market characterized with the trend of growth and a decline of the market was observed since 2008: in 2009 the total revenues, received by undertakings from provision of the networks interconnection services, reduced by 7.3 per cent, in 2010 – by 18.8 per cent and in 2011 – already by 22.1 per cent. In 2011 the networks interconnection services market reduced by 15.1 percentage points more than the entire electronic communications market. The reduction of revenues of the networks interconnection services market most likely resulted from the annual reduction of prices of both mobile and public fixed communication calls termination services (see Figures 58 and 59) – starting from 1 January, 2011 the prices of the said services correspondingly reduced by 30 and 19.7 per cent.vii
vii The change of the reduction of the prices of both public mobile and public fixed communication call termination services is provided according to the call termination prices, not differentiating according to the time of provision of services.
41 Lithuanian Communications Sector 2011
22.5 % 22.7 % 23.4 % 23.5 % 750 21.1 % 21.4 % 25 % 18.0 % 18.9 % 17.9 % 20 % 500 15 % 10 % 250 5 % 364.6 400.4 531.6 607.5 673.8 730.3 676.8 549.5 427.9 0 0 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Networks interconnection revenues The share in the total revenues of the electronic communications market Figure 52. The dynamics of the revenues of networks interconnection services market, LTL million and the share in the overall structure of the revenues of the electronic communications market, per cent in 2003–2011 Source: RRT
As in 2010, in 2011 TEO LT, AB received the largest amount of revenues from provision of networks interconnection services. In terms of the received revenues the market share, occupied by the said undertaking grew by 4.4 percentage points during the year and amounted to 27.7 per cent in 2011. The market share of Bitė Lietuva UAB amounted to 23.4 per cent, i. e. 3.9 percentage points more than in 2010. Omnitel UAB and Tele2 UAB correspondingly occupied 19.8 and 21.5 per cent of the market, the market share of Omnitel UAB reduced by 0.4 percentage point during the year and the share of Tele2 UAB grew by 1.3 percentage point. The share of the networks interconnection market in terms of revenues, occupied by the three major public mobile communications network operators (Omnitel UAB, Bitė Lietuva UAB and Tele2 UAB and the incumbent fixed communications network operator (TEO LT, AB), amounted to 92.4 per cent (see Figure 53) and was 9.2 percentage points larger than in 2010 (83.2 per cent).
Omnitel UAB 19.8 %
TEO LT, AB 27.7 %
Others 3.4 %
Tele2 UAB Bitė Lietuva UAB Mediafon UAB 21.5 % 4.1 % 23.4 %
Figure 53. The structure of the networks interconnection services market in terms of revenues in 2011, per cent Source: RRT
Call termination services
In 2011 call termination services were provided by 17 operators: including 12, providing public fixed communication networksviii and 5 – public mobile communication networks.ix The call termination services cover the calls, originated on Lithuanian and foreign countries’ operators networks and terminated on
viii TEO LT, AB, Lietuvos Geležinkeliai AB, Lietuvos Radijo ir Televizijos Centras AB, CSC Telecom UAB, Cubio UAB, Kavamedia UAB, Linkotelus UAB, Mediafon UAB, Nacionalinis Telekomunikacijų Tinklas UAB, Telekomunikaciju Grupa UAB, Teletinklas UAB, UkmNet UAB ix Omnitel UAB, Bitė Lietuva UAB, Tele2 UAB, CSC Telecom UAB, Mediafon UAB
42 Lithuanian Communications Sector 2011
Lithuanian operators’ public mobile and fixed communication networks.x In 2011 the call termination services market share, measured by the duration of calls, terminated in operators’ networks, reached 2 297.5 million minutes, i. e. 13.8 per cent more than in 2010 (see Figure 54). 1 963.7 million minutes or 85.5 per cent of the duration of the calls, terminated on all operators’ networks was terminated on public mobile communications networks. During 2011 the duration of calls, terminated on public mobile communications networks, grew by 15.2 per cent and the growth of the duration of calls, terminated on public fixed communications networks, which reached 333.8 million minutes, was not so significant (6.2 per cent).
1 963.7 1 705.2 1 302.1 1 460.5 1 512.1 995.4 1 121.3 699.8 848.6 215.2 200.9 253.6 281.0 291.5 298.5 307.5 314.4 333.8 2003 2004 2005 2006 2007 2008 2009 2010 2011
Terminated on public fixed communications networks Terminated on public mobile communications networks
Figure 54. The duration of calls, terminated on public fixed and public mobile communications networks in 2003– 2011, million minutes Source: RRT
Evaluating the duration of calls, terminated on public mobile and fixed communication networks on the territory of the Republic of Lithuania in terms of origin of the call, the calls, originated on public mobile communications networks, public fixed communications networks and foreign operators’ networks are distinguished. The majority (41 per cent or 136.9 million minutes) of the calls, terminated on public fixed communication networks, measured according to the duration of calls, were originated on public mobile communications networks. The smallest share of calls was terminated on public fixed communications networks, where the calls were originated on public fixed communications networks, provided by other operators (28.4 per cent) (see Figure 55). The sizes of the flows are determined by the subscribers’ distribution and the applicable pricing. Compared to 2010, in 2011 the duration of calls, originated on foreign operators’ networks and terminated on public fixed communications networks, located on the territory of the Republic of Lithuania, reduced by 20 per cent: i. e. from 127.6 (in 2010) down to 102.1 million minutes (in 2011).
2011 41.0 % 28.4 % 30.6 % 2010 35.2 % 24.2 % 40.6 % 2009 38.2 % 20.5 % 41.3 % 2008 39.6 % 13.2 % 47.2 % 2007 39.7 % 15.8 % 44.5 % 2006 38.2 % 21.4 % 40.3 % 2005 42.5 % 12.9 % 44.6 % Originated on public mobile communications networks Originated on public fixed communication networks Originated on foreign operators' networks
Figure 55. The dynamics of the duration of calls, terminated on Lithuanian public fixed communications networks according to the origination of calls in 2005–2011, per cent Source: RRT x The call termination prices, examined in the present part of the Report cover only the termination of calls from other networks, the calls in the own network are not evaluated.
43 Lithuanian Communications Sector 2011
In 2011 87.2 per cent of all the calls, terminated on public mobile communications networks, measured by the duration, were originated on other public mobile communications networks, 8.7 per cent – on foreign operators’ networks, 4.1 per cent – on public fixed communications networks (see Figure 56). The distribution of calls according to the origination of calls changed insignificantly during 2011.
2011 87.2 % 4.1 % 8.7 %
2010 88.0 % 3.7 % 8.3 %
2009 86.1 % 3.9 % 10.0 %
2008 83.2 % 4.9 % 11.9 %
2007 80.2 % 5.9 % 13.9 %
2006 77.5 % 7.1 % 15.4 %
2005 76.6 % 8.2 % 15.2 %
Originated on mobile communications networks Originated on fixed communications networks Originated on foreign operators' networks Figure 56. The dynamics of the duration of calls, terminated on public mobile communications networks according to the origination of calls in 2005–2011, per cent Source: RRT
In 2011, out of all the public mobile communications network operators most calls (742.3 million minutes or 37.8 per cent of the total traffic) was terminated in the network of Tele2 UAB, i. e. most frequently calls were made to the network of Tele2 UAB (see Figure 57). As in 2010, in 2011 the market shares of all the three major mobile communications operators remained almost the same: the size of call termination services markets of Tele2 UAB and Bitė Lietuva UAB grew by 0.3 and 0.1 percentage points correspondingly, the market share of Omnitel UAB reduced by 0.5 percentage point.
2011 33.2 % 28.9 % 37.8 % 0.075 % 2010 33.7 % 28.8 % 37.5 % 0.010 % 2009 34.4 % 29.0 % 36.6 % 0.002 % 2008 36.6 % 29.9 % 33.5 % 2007 38.2 % 30.0 % 31.8 % 2006 40.0 % 29.9 % 30.1 % 2005 40.7 % 30.5 % 28.8 % 2004 56.3 % 23.4 % 20.3 % 2003 60.0 % 23.9 % 16.1 % 2002 68.6 % 21.8 % 9.6 % 2001 66.7 % 18.2 % 15.1 % 2000 74.2 % 18.6 % 7.2 % Omnitel UAB Bitė Lietuva UAB Tele2 UAB Other service providers
Figure 57. The markets of calls, terminated on public mobile communications networks, measured by the duration of calls in 2000–2011, per cent Source: RRT
44 Lithuanian Communications Sector 2011
As in the previous year, in 2011 Lithuanian public mobile and fixed communications network operators applied duration based charges for the call termination services, measured in minutes, as well as periodical (monthly) and annual charges for the means, relating to provision of call termination services (i. e. networks interconnection). The prices of call termination services, applied by public mobile communications network operators and the public fixed communications network operators were different in both structure and size. In 2011 public mobile and fixed communications network operators differentiated the call termination services prices according to time, i. e. peak time (from 8.00 till 20.00 business days) and off-peak time (from 20.00 till 8.00 business days, around the clock on the rest days and holidays). Apart of the said prices, the public fixed communications network operators also applied the call setup price and the public mobile communications network operators did not apply the call setup price. In 2011 all the operators applied the charges for the measures, relating to voice call termination, which include implementation of a network interconnection point (the one-off and periodical (monthly) charges) and provision of capacity in network termination points (one-off and periodical (monthly) charges for the 2 Mbps inlet), however such prices were of a different size. The three major public mobile communications network operators, in observance of the price control obligations, imposed by Orders No. 1V-1516, No. 1V-1515 and No. 1V-1517 of the Director of RRT of 24 December, 2009, starting from 1 January, 2011 reduced the applicable prices for termination of voice calls on public mobile communications networks from 18.04 ct per minute to 12.5 ct per minute w/o the VAT during the peak time (30.1 7 per cent) and from 9.02 ct per minute to 6.6 ct per minute w/o the VAT during the off-peak time (26.7 8 per cent) (see Figure 58).
36.0 18.0 28.8 14.4 18.0 9.0 14.4 12.5 6.6 10.0 7.0 6.3 5.6
2004–2009 2009–2010 2010–2011 2011–2012 Since 2012 Peak time Off-peak time Not differentiating Figure 58. The dynamics of the prices of termination of voice calls on public mobile communications networks in 2004–2012, ct per minute w/o the VAT Source: RRT
In 2011 the following prices were applicable for the services of termination of calls on public fixed communications networks: 4.8 ct per minute for termination of calls, relating to the national transit of Type II during the peak timexi, 2.0 ct per minute for termination of calls, relating to the national transit of Type II during the off-peak time and 1.7 ct – call setup price. The call termination service, where the networks are interconnected on the local level, was not provided. Since 24 December, 2009, upon performing the study of the market of call termination on individual public telephone communications networks, provided at a fixed location and for the purpose of execution of the price control obligations, imposed by the orders of the RRT, all the providers of services of call termination on public fixed communications networks had to apply similar call termination prices (see Figure 59). xi The national transit of Type II is transfer of calls from/till a local exchange in a public fixed communications network (excluding the exchange), located nearest to the caller/the called party, in which the networks interconnection can be implemented to/from the transit exchange in the public fixed communications network (including the exchange), in which the networks interconnection is or can be implemented.
45 Lithuanian Communications Sector 2011
6.0 10.0 6.0 3.6 6.0 3.6 2.6 5.4 2.8 1.7 4.8 2.0 0.7 4.2 1.2
2005–2008 2008–2010* 2010–2011 2011–2012 Since 2012
Call setup Peak time Off-peak time * Some operators applied the call termination prices, set in 2005–2008 during the said period. Figure 59. The dynamics of calls, relating to the national transit of Type II in the public fixed communications networks in 2005–2012, ct per minute Source: RRT
On 24 December, 2009, upon performing the studies of the markets of call termination on individual public mobile telephone communication networks and call termination on individual public telephone communications networks, provided at a fixed location, it was established that the networks interconnection is a measure, relating to the call termination service. In 2011 the undertakings with significant power on the relevant markets, interconnecting their networks, in observance of the adopted decisions, had to share the costs of implementation of the communication line, intended for networks interconnection in half.
Call transit services
The call transit servicexii, also referred to as the clear transit service, is important in case a subscriber of one operator wishes to make a call to another operator’s subscriber, with which the operator, whose subscriber is making the call, has not interconnected its network. In this case the operator, originating the call can use the call transit service, provided by a third operator, who has interconnected its network with the networks of the operator, originating the call and the operator, accepting the call. It should be noted that the call transit service consists of the transfer of call via one or several transit exchanges, always provided at a fixed location, which means that the transit service, by it’s a nature, is a service, provided at a fixed location independently of the infrastructure, used for provision of the service (mobile or fixed infrastructure). In 2011 the revenues, received from provision of call transit services, amounted to LTL 144.4 million and, compared to 2010, reduced by 27.4 per cent. At the end of 2010 the call transit services were provided by 11 undertakings, in 2010 there were 13. The duration of calls, forwarded by transit in 2011 was 726.9 million minutes, i. e. 1.2 per cent less than in 2010 (see Figure 60).
xii The call transit services, examined in the present part of the Report cover only the clear transit, i. e. when the calls are not originated or terminated in the network, where the transit service is already provided.
46 Lithuanian Communications Sector 2011
735.9 726.9 250 750 580.5 200 478.5 439.5 500 150 347.5
100 221.9 250 50 81.8 96.6 108.7 131.4 143.3 164.3 198.9 144.4 0 0 2004 2005 2006 2007 2008 2009 2010 2011 Revenues Duration of calls Figure 60. The dynamics of the revenues on the call transit market, LTL million and the duration of calls, forwarded by transit, million minutes, in 2004–2011 Source: RRT
In 2011 the largest amount of revenues for call transit services was received by TEO LT, AB. The said company received 71 per cent of the total of the revenues of the entire call transit market and the market share, occupied by TEO LT, AB, compared to 2010, grew by 15.3 percentage points (see Figure 61). During 2011 the market share, occupied by Mediafon UAB, shrunk by 16.5 percentage points and amounted to 12 per cent. Bitė Lietuva UAB and Ecofon UAB correspondingly occupied 7.8 per cent (9 per cent in 2010) and 4.1 per cent (1.5 per cent in 2010) of the market.
Mediafon UAB 12.0 %
TEO LT, AB 71.0 % Bitė Lietuva UAB 7.8 %
Ecofon UAB 4.1 % Others 5.1 % Figure 61. The structure of call transit market in terms of revenues in 2011, per cent Source: RRT
Summary
In 2011 the revenues from networks interconnection services amounted to LTL 427.9 million and, during the year, reduced by 22.1 per cent. In the total of the revenues of the electronic communications sector the said revenues amounted to 17.9 per cent, i. e. 3.5 percentage points less than in 2010. In 2011 the share of the networks interconnection services market, collectively occupied by Omnitel UAB, Bitė Lietuva UAB, Tele2 UAB and TEO LT, AB, measured by revenues, amounted by 92.4 per cent and amounted to LTL 395.4 million. TEO LT, AB received 27.7 per cent of all the revenues, Bitė Lietuva UAB – 23.4 per cent, Tele2 UAB – 21.5 per cent, Omnitel UAB – 19.8 per cent. The size of the call termination services market, measured by the duration of the calls, terminated on the operators’ networks, grew by 13.8 per cent in 2011 and amounted to 2 297.5 million minutes, 85.5 per
47 Lithuanian Communications Sector 2011
cent of calls, measured by duration (1 963.7 million minutes) were terminated on public mobile communication networks. The largest share of calls, terminated on public fixed and mobile communications networks, was originated on public mobile communications networks (41 and 87.2 per cent correspondingly). 37.8 per cent of all the calls, terminated on public mobile communications networks in 2011, were terminated on the network of Tele2 UAB, 33.2 per cent – on the network of Omnitel UAB, 28.9 per cent – on the network of Bitė Lietuva UAB and 0.075 per cent – on other operators’ networks. Starting from 1 January, 2011 the prices of the services of call termination on public mobile communications networks reduced by 30.7 per cent during peak time and by 26.8 per cent during the off- peak time and correspondingly amounted to 12.51 ct per minute (w/o the VAT) and 6.62 ct per minute (w/o the VAT). Starting from 1 January, 2011 the prices of services of call termination on public fixed communications networks reduced by 11.1 per cent during peak time and by 28.6 per cent during off-peak time and correspondingly amounted to 4.84 ct per minute (w/o the VAT) and 1.98 ct per minute (w/o the VAT). The revenues from provision of call transit services in 2011 amounted to LTL 144.4 million and, compared to 2010, reduced by 27.4 per cent. The biggest revenues from provision of transit services in 2011 were received by TEO LT, AB, i. e. 71 per cent of all the transit market revenues, Mediafon UAB received 12 per cent, Bitė Lietuva UAB and Ecofon UAB occupied 7.8 per cent and 4.1 per cent of the market correspondingly.
8 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:167:0012:0023:LT:PDF
48 Lithuanian Communications Sector 2011
3. Internet Access and other Data Transmission Services
3.1. Internet Access Services
The times, when the Internet was referred to as an innovation, are far behind. Today Internet access is the most popular means of communication. Internet communication has become an integral part of life, a tool for learning and working, the space for communication and socializing. According to the data of Statistics Lithuania, in 2011 Internet was most frequently used for e-mail correspondence, reading newspapers and magazines and searching for information on goods and services. Apart of the aforementioned ways of use of the Internet, which have already become traditional, the Internet is used for ordering and purchasing goods and receipt of e. government and other services. At the end of 2011 already 98.1 per cent of all the companies, operating in Lithuania, used the Internet. 91.2 per cent of all the state and municipal institutions and 67.7 per cent of all the companies had their websites or homepages.
General market overview
In 2011 103 undertakings provided retail Internet access and wholesale access services in Lithuania, in 2010 there were 108. The revenues from provision of Internet access services amounted to LTL 369.2 million and, compared to 2010 (LTL 368.5 million), remained almost unchanged (see Figure 62), their share in the total revenues of the electronic communications market amounted to 15.4 per cent and grew by 1.1 percentage point in 2011.
400 14.3 % 15.4 % 18 % 13.1 % 11.5 % 9.9 % 12 % 8.0 % 9.2 % 200 6 %
200.3 247.6 294.6 358.8 378.8 368.5 369.2 0 0 % 2005 2006 2007 2008 2009 2010 2011
Internet access services market revenues The share on the electronic communications market
Figure 62. The size of the Internet access services market, measured by revenues, LTL million and its share on the electronic communications market in 2005–2011, per cent Source: RRT
In 2011 TEO LT, AB remained the largest provider of retail Internet access services (see Figure 63). During 2011 the said undertaking received 42.2 per cent of all the revenues of the market. In 2010 the market share, occupied by TEO LT, AB, amounted to 41.1 per cent. The market shares of other operators did not change or changed insignificantly during 2011.
49
Lithuanian Communications Sector 2011
Omnitel UAB 10.7 % Bitė Lietuva UAB 9.6 % TEO LT, AB Lietuvos radijo ir 42.2 % televizijos centras, AB 6.2 % Balticum TV UAB 2.9 % Others Baltnetos komunikacijos 24.8 % UAB 3.5 % Figure 63. The market shares of the Internet access service providers in terms of revenues in 2011, per cent Source: RRT
In 2011 the number of subscribers of the Internet access services grew by 12.5 per cent or by 109.6 thousand and at the end of the year reached 989.2 thousand (see Figure 65). With the increase of the number of subscribers of the Internet access services, the Internet access penetration also grew by 3.8 per cent and at the end of 2011, reached 30.9 per cent (see Figure 64).
1200 40 % 27.1 % 30.9 % 21.2 % 23.9 % 30 % 800 17.3 % 12.3 % 20 % 7.6 % 400 5.1 % 10 % 2.5 % 257.4 417.5 581.9 709.8 796.1 879.6 989.2 86.8 0 173.6 0 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Number of subscribers Penetration Figure 64. The number of subscribers of the Internet access services (including mobile communication), thousand and the penetration, per cent in 2003–2011 Source: RRT
The average revenues from provision of Internet access services (including all the ways of connection) from one subscriber per one month of 2011 (ARPU)xiii amounted to LTL 32, i. e. 11.1 per cent less than 2010 (LTL 36) (see Figure 65). The largest ARPU were received from the subscribers, connected over leased lines, i. e. LTL 713 (LTL 752.5 in 2010), the ARPU from the subscribers, connected over xDSL lines were lower, i. e. LTL 41.3 (LTL 44 in 2010), the ARPU from the subscribers, connected over fibre lines were LTL 32.8 (34 in 2010). The cheapest Internet access services were provided to the subscribers, connected over switched lines – LTL 17.5 (LTL 19.5 in 2010), cable television networks – LTL 23.8 (LTL 28.5 in 2010) and mobile communication networks (by using a computer) – LTL 25.4 (LTL 31.5 in 2010).
713.1
17.5 23.8 25.4 29.8 29.8 32.0 32.8 41.3
LAN
CTV
lines
lines
xDSL
lines
lines
Dial-up
Leased
Mobile
Wireless
nerworks Average * Average
Fibre lines Fibre * – Arithmetical average as regards all the technologies, except leased lines Figure 65. The ARPU for the Internet access services against the technologies used in 2011, LTL Source: RRT
xiii The average revenues from one subscriber against the different technologies have been calculated according to the quarterly data.
50 Lithuanian Communications Sector 2011
According to the data of the European Commission of February 20119, Lithuania had one of the lowest prices of provision of broadband Internet access services of the 4096–8192 Kbps speed rate in the European Union. The subscribers of the Lithuanian Internet access services paid EUR 11.7 per month on the average for the services (see Figure 66). A cheaper Internet access was provided only in Denmark (EUR 11.3). The most expensive broadband Internet services were in Cyprus – EUR 53.6 per month.
0 0 9 0 1 8 0 4 6 6 7 2 7 9 7 4 6 0 4 2 0 9 5 6
......
8
3
7
.
.
.
23 12 13 16 16 16 18 18 18 18 18 22 22 22 23 26 27 28 28 29 31 32 33 53
16
11
11
Italy
Malta
Spain
Latvia
EU-27
Ireland
Austria France
Poland
Cyprus
Finland
Estonia
The UK The
Belgium
Sweden
Bulgaria
Portugal
Hungary
Slovenia
Romania
Denmark
Lithuania
Germany
Luxembourg
Czech Republic Slovak Republic Slovak The Netherlands The Figure 66. The prices of broadband Internet access services in the European Union as of February 2011, EUR per month Source: European Commission
The growing revenues from provision of retail Internet access services and the Internet penetration, which has been increasing each year show that the development of Internet access services is one of the priority directions of development of the electronic communications market, which attains especially significant attention from the market participants for the purpose of retaining and attracting the largest number of users possible.
Broadband Internet access services
At the end of 2011, out of 989.2 thousand of subscribers of retail Internet access services only 325 subscribers received the Internet access by using narrowband communication technologies, i. e. switched lines. Almost all the Internet access services subscribers (99.96 per cent) used broadband communication technologies for receiving the Internet access (99.8 per cent in 2010). During 2011 the number of subscribers, using broadband communication technologies for receiving the Internet access, grew by 12.6 per cent, i. e. from 878.4 thousand (at the end of 2010) up to 988.8 thousand (at the end of 2011). During 2011 the broadband Internet access penetration grew by 3.8 percentage points and reached 30.9 per cent at the end of the year (see Figure 67).
1200 30.9 % 40 % 27.1 % 23.8 % 30 % 800 21.1 % 17.1 % 12.0 % 20 % 400 6.9 % 1.9 % 3.8 % 10 % 234.1 406.1 576.0 706.0 793.9 878.4 988.8 0 66.8 129.0 0 % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Number of subscribers Penetration
Figure 67. The number, thousand and penetration, per cent of the subscribers of broadband Internet access services, provided by employing fixed and mobile communication technologies in 2003–2011 Source: RRT
51 Lithuanian Communications Sector 2011
The same trends of use of technologies for provision of broadband Internet access services remained in 2011. i. e. the Internet access services, provided by xDSL, cable television (CTV) and local area networks (LAN) gave way to the Internet access services, provided over fibre lines, wireless and mobile communication networks. 36.4 per cent of all the subscribers of broadband Internet access services received the services over fibre communication lines (35.0 per cent in 2010) (see Figure 68). At the end of 2011 the number of subscribers, to whom the broadband Internet access services were provided over fibre communication lines, was 359.9 thousand, i. e. 17 per cent more than at the end of 2010. The number of subscribers of broadband Internet services, provided over mobile communication technologies grew fastest and at the end of 2011 amounted to 256.9 thousand. The technology has become the second most popular broadband Internet access services provision technology, surpassing the xDSL. Each fifth subscriber of broadband Internet services chose the broadband Internet access services, provided by applying the technology. The number of subscribers of broadband Internet access services, provided by using the xDSL technology reduced by 7.3 per cent during 2011 and at the end of the year amounted to 197.6 thousand. The scopes of broadband Internet access services, provided by using wireless communications continued to increase: at the end of 2011 106.8 thousand subscribers, i. e. 10.8 per cent of all the subscribers of broadband Internet access services connected to the Internet in the said way. The number of subscribers, receiving broadband Internet access services by using wireless communication tools grew by 22 per cent during the year (by 26 per cent in 2010). The use of CTV, LAN and leased lines technologies for receiving broadband Internet access services continued to reduce in 2011 and at the end of the year the number of subscribers, connecting to the Internet by using the said ways amounted to correspondingly 4.6 per cent, 2.1 per cent and 0.1 per cent of all the subscribers of broadband Internet access services.
2011 36.4 % 20.0 % 2.1 % 4.6 % 10.8 % 26.0 % 0.1 %
2010 35.0 % 24.2 % 2.8 % 5.6 % 10.1 % 22.1 % 0.1 %
2009 33.0 % 29.5 % 3.5 % 6.8 % 6.5 % 20.5 % 0.2 %
2008 23.5 % 36.9 % 6.2 % 9.1 % 6.3 % 17.8 % 0.2 %
2007 16.3 % 39.8 % 10.8 % 11.2 % 8.8 % 12.8 % 0.3 %
2006 12.6 % 42.8 % 10.9 % 15.7 % 5.9 % 11.7 % 0.4 %
2005 6.0 % 40.9 % 21.9 % 22.3 % 8.1 % 0.8 %
FTTx xDSL LAN CTV networks Wireless communication lines Mobile communications Leased lines Figure 68. Distribution of subscribers against the fixed and mobile communication technologies, used for receipt of broadband Internet services in Lithuania in 2005–2011, per cent Source: RRT
The rapid growth of the number of subscribers of broadband Internet access, provided by using mobile communication technologies increased the weight of the services in the overall structure of broadband Internet access services market. At the end of 2011 the market of broadband Internet access services, provided by using mobile communication technologies, measured by the number of subscribers, amounted to 26 per cent of the total of the broadband Internet access market, i. e. 4 percentage points more than at the end of 2010 (see Figure 69).
52 Lithuanian Communications Sector 2011
2011 26.0 % 74.0 %
2010 22.0 % 78.0 %
2009 20.1 % 79.9 %
2008 16.3 % 83.7 %
2007 11.8 % 88.2 %
2006 9.0 % 91.0 %
Mobile communication technologies Fixed communication technologies
Figure 69. Distribution of subscribers of broadband Internet access services according to the used technologies in 2006–2011, per cent Source: RRT
Broadband Internet access services, provided by using fixed communication technologies
Compared to 2010, in 2011 the total revenues, received from the subscribers, receiving broadband Internet access services by using public fixed communication technologies, reduced by 0.3 per cent and amounted to LTL 299.0 million and in 2010 the revenues reached LTL 299.9 million. About 52 per cent of the said revenues were received by TEO LT, AB. During 2011 the share of the market of broadband Internet access, provided by using fixed communication technologies, occupied by TEO LT, AB, grew by 2 percentage points. The number of subscribers of broadband Internet access, provided by using fixed communication technologies continued to grow however, compared to 2010, in 2011 the growth reduced by 0.9 percentage point, i. e. from 7.9 per cent of the growth of the number of subscribers (in 2010) down to 7 per cent (in 2011) (see Figure 70).
800 21.1 % 22.9 % 25 % 19.0 % 17.6 % 20 % 15.1 % 10.9 % 15 % 400 6.9 % 10 % 3.8 % 1.9 % 5 % 66.8 129.1 234.1 368.7 507.6 590.1 633.8 684.1 731.9 0 0 % 2003 m. 2004 m. 2005 m. 2006 m. 2007 m. 2008 m. 2009 m. 2010 m. 2011 m. Number of subscribers Penetration
Figure 70. The number of subscribers of the Internet access services, provided by using fixed communication technologies, thousand and the penetration, per cent in 2003–2011 Source: RRT
During 2011 the penetration of broadband Internet services, provided over public fixed communication networks, grew by 1.8 percentage point. According to the data of the European Commission10, in the middle of 2011 the Netherlands and Denmark were Europe’s leaders according to the said indicator. In July 2011 the penetration of broadband Internet access services, provided by using fixed communication technologies in the said countries correspondingly reached 39.3 per cent and 38.5 per cent and the average indicator of the 27 EU Member States was 27.2 per cent (72 per cent).
53 Lithuanian Communications Sector 2011
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Figure 71. The penetration of broadband Internet access services, provided by using fixed communication technologies in the EU Member States in July 2011, per cent Source: the European Commission
Broadband Internet access services provided over fibre communication lines. Fibre communication lines, for the third year in a row, remain the most popular broadband Internet access services provision technology in Lithuania. In 2011 36.4 per cent of all the subscribers of broadband Internet access services and 49.2 per cent of all the subscribers of fixed broadband Internet access services used fibre communication technologies for receiving access – correspondingly 1.4 and 4.3 percentage points more than in 2010 (see Figure 68 and Figure 72).
2011 49.2 % 27.0 % 2.9 % 6.3 % 14.6 %
2010 44.9 % 31.1 % 3.6 % 7.2 % 13.0 %
2009 41.5 % 37.1 % 4.4 % 8.6 % 8.2 %
2008 28.6 % 44.9 % 7.5 % 11.1 % 7.7 %
2007 18.7 % 45.6 % 12.4 % 12.8 % 10.1 %
2006 14.3 % 48.5 % 12.3 % 17.8 % 6.7 %
2005 6.0 % 40.9 % 21.9 % 22.3 % 8.1 %
Fibre lines xDSL lines LAN CTV Wireless communication lines Leased lines
Figure 72. Distribution of subscribers against the fixed communication technologies, used for receiving broadband Internet services in 2005–2011, per cent Source: RRT
In terms of the use of fibre communication lines for provision of broadband Internet access services Lithuania has been the ultimate Europe’s leader for a number of years (see Figure 73) and among the world’s leaders. According to the data of the study, performed by FTTH Council Europe11 and iDate12 in December 2011, Lithuania, in terms of the penetration of the broadband Internet access, provided over fibre communication lines takes the sixth spot in the world after South Korea, the United Arab Emirates, Hong Kong, Japan and Taiwan.
54
Lithuanian Communications Sector 2011
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Figure 73. The penetration of the subscribers of broadband Internet access, provided by using fibre communication lines in the European states in December 2011, per cent Source: FTTH Council Europe and IDATE (December 2011)
In 2011 the broadband Internet services in Lithuania were provided over 359.9 thousand fibre communication lines, laid up to the premises of the end service user (Fibre to the Home, FTTH) or up to the building of the end service user (Fibre to the Building, FTTB) - 232.5 thousand (or 64.6 per cent) FTTB and 127.4 thousand (or 35.4 per cent) – FTTH (see Figure 74). Compared to 2010, in 2011 the number of subscribers, receiving broadband Internet access services over FTTH and FTTB lines correspondingly grew by 40.0 per cent and 7.3 per cent.
2011 127 430 232 479 2010 91 037 216 653 2009 51 703 202 847 2008 15 126 148 013 2007 94 700 2006 52 664 2005 12 937
FTTH FTTB FTTx
Figure 74. The number of subscribers of the Internet access services, provided over fibre communication lines according to the ways of connection in 2005–2011 Source: RRT
According to the data of the end of 2011, 39 per cent of the market of broadband Internet access, provided over fibre communications lines, measured by the number of subscribers, was occupied by TEO LT, AB (see Figure 75), i. e. 5.1 percentage points more than at the end of 2010, which amounted to 140.4 thousand subscribers, including 89.6 per cent receiving broadband Internet access services by using the FTTH technology.
75.4 % 66.1 % 61.0 % 99.4 % 99.9 % 98.1 % 85.2 % 33.9 % 39.0 % 0.6 % 0.1 % 1.9 % 14.8 % 24.6 % 2005* 2006* 2007* 2008 2009 2010 2011 Other service providers TEO LT, AB * In 2005–2007 TEO LT, AB provided the information only on the fibre communication lines, laid up to the premises of the end service user (FTTH). Figure 75. Dynamics of the shares of the market of Internet access, provided over fibre communication lines, occupied by TEO LT, AB and other service providers, measured by the number of subscribers in 2005–2011, per cent Source: RRT
55 Lithuanian Communications Sector 2011
xDSL was the second most popular fixed communication technology in Lithuania, used for provision of the broadband Internet access services in 2011. According to the data of the European Commission13 (see Figure 76), 29.4 per centxiv of all the subscribers of broadband Internet access services, provided over public fixed communication networks, connected to the Internet by this way at the end of 2011. Differently from Lithuania, in the EU Member States xDSL remained the dominating technology of provision of Internet access services in 2011 – on the average it was used by 76.8 per cent of all the subscribers of broadband Internet access, provided by using fixed communication technologies. The technology is most popular in Greece and Italy, where almost all the broadband Internet access services are provided by using the xDSL technologies, and the least popular in Bulgaria, Lithuania and Romania (see Figure 76).
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Figure 76. The share of subscribers, receiving broadband Internet access by using xDSL technologies on the market of the broadband Internet services, provided by using fixed communication technologies at the end of 2011, per cent Source: European Commission
In 2011 10.8 per cent of all the broadband Internet access service users used the broadband Internet services, based by wireless communication technologies (10.1 per cent in 2010) and 14.6 per cent used the services, provided by using fixed communications (13.0 per cent in 2010). The growth resulted from the increase of the number of subscribers, connected to the Internet by using the worldwide interoperability for microwave access (WiMax) technology by 58.2 per cent in 2011. At the end of 2011 the broadband Internet access services by using another wireless communication technology, i. e. Wireless Fidelity (WiFi) were used by 8.2 per cent more subscribers than at the end of 2010 (see Figure 77). During 2011 the number of WiMax base stations grew by 22.7 per cent, i. e. from 335 (in 2010) to 411 (in 2011).
2011 34 953 66 264 5 604 2010 22 091 61 241 5 358 2009 8 249 55 828 5 417 2008 156 53 441 5 828 2007 51 464 2006 24 491 Wireless communication lines* WiMax Wifi Other * Wireless communication lines, not differentiated according to the specific technology Figure 77. The number of subscribers, connected to the Internet by using wireless communication technologies (with the exception of the subscribers, who connected to the Internet over public mobile communication networks) in 2006–2011 Source: RRT xiv According to the data of RRT, 27 per cent of subscribers received the Internet access services, provided by using the xDSL technology.
56 Lithuanian Communications Sector 2011
The volume of the Internet access services, provided over LAN and CTV networks, continued to reduce in 2011. At the end of 2011 the Internet access services, provided over LAN networks, amounted to 2.9 per cent (3.6 per cent in 2010) of all the services, provided by using fixed communication technologies. The share of subscribers, who received Internet access services over CTV networks on the market of broadband Internet, provided by using fixed communication technologies, reduced from 7.2 per cent (at the end of 2010) to 6.3 per cent (at the end of 2011).
The broadband Internet access services, provided by using mobile communication technologies
In 2011 broadband Internet access services over mobile communication technologies were provided by using the universal mobile telecommunication system (UMTS) and the global standard for mobile communications (GSM/DSC). In 2011 the development of UMTS and GSM/DSC was continued and in the 2nd quarter of 2011 the development of case stations of LTE (long term evolution) was commenced. In the end of 2011 Lithuanian mobile communications operators controlled 3 170 GSM/DSC mobile radiocommunication base stations and 1 426 UMTS base stations, i. e. correspondingly 6.2 and 32.5 per cent more than at the end of 2010. In addition, 21 LTE base stations were operated at the end of 2011 (see Table 2).
Table 2. The dynamics of mobile communication base stations in 2010–2011, pcs
2010 2011 Change
GSM/DSC stations 2 986 3 170 6.16 per cent
UMTS stations 1 076 1 426 32.53 per cent
LTE stations 0 21 -
Total 4 062 4 596 13.66 per cent Source: RRT
Out of all the Internet access services provision technologies, the number of subscribers of broadband Internet, provided by using mobile communication technologies grew most rapidly, i. e. by 32.2 per cent. During 2011 the number of subscribers, who received broadband Internet access services over public mobile communication networks by using a personal computer, grew by 32.2 per cent: from 194.4 thousand (in 2010) up to 256.9 thousand (in 2011) (see Figure 78). Compared to 2010, in 2011 the penetration of broadband Internet, provided by using mobile communication technologies, grew by 2 percentage points and reached 8 per cent (see Figure 78).
300 6.0 % 8.0 % 9 % 4.8 % 200 3.5 % 6 % 2.0 % 100 1.1 % 3 % 37.4 68.4 115.9 160.1 194.4 256.9 0 0 % 2006 2007 2008 2009 2010 2011 Number of subscribers Penetration Figure 78. The number of subscribers of broadband Internet, provided by using mobile communication technologies, thousand and the penetration, per cent, in 2006–2011 Source: RRT
57 Lithuanian Communications Sector 2011
According to the data of the European Commission, the penetration of broadband Internet, provided by using mobile communication technologies in Lithuania (6.8 per cent)xv was 0.7 percentage point lower than the average of the 27 EU Member States, which reached 7.5 per cent (see Figure 79). According to the said indicator, such countries as Finland, Sweden and Austria were leaders in the European Union in 2011. The penetration of the Internet access, provided by using mobile communication technologies correspondingly reached 34 per cent, 20.2 per cent and 19.8 per cent (see Figure 79). The popularity of the said services in the aforementioned countries most likely results from the geographical peculiarities.
34.0 % 34.0
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Figure 79. Penetration of the broadband Internet, provided by using mobile communication technologies at the end of 2011, per cent Source: European Commission
At the end of 2011 the broadband Internet access services over public mobile communication networks were provided by 5 undertakings: Omnitel UAB, Bitė Lietuva UAB, Tele2 UAB, Eurocom UAB and Teledema UAB. More than one half, i. e. 56 per cent of subscribers, used the services, provided by Omnitel UAB (56.7 per cent in 2010), 38.0 per cent used the services, provided by Bitė Lietuva UAB (41.5 per cent in 2010). The total revenues, received from the mobile broadband Internet access services provision activities amounted to LTL 70.2 million in 2011, and, compared to 2010, grew by 3.6 per cent. As in 2010, the market leader, in terms of revenues, was Omnitel UAB, which had 54.6 per cent of all the revenues of the total market of broadband Internet access services, provided over mobile communication networks.
Internet speed
The growth of development of broadband communications is accompanied by an increase of the users’ needs. In 2011 the most popular broadband Internet access speed rate was 10 Mbps and greater, it was chosen by more than one half of all subscribers: 11.8 per cent of subscribers used the speed rate of 10– 30 Mbps, almost 30.6 per cent – 30–100 Mbps and the speed of communication, chosen by already 9.4 per cent of Internet access subscribers exceeded 100 Mbps. 37.5 per cent of subscribers chose the 2–10 Mbps speed rate. 10.7 per cent of broadband Internet access subscribers used the slowest speed rate, i. e. from 144 Kbps to 2 Mbps (see Figure 80).
xv According to the data of RRT, the penetration of broadband Internet, provided by using mobile communication technologies reached 8 per cent in Lithuania in 2011.
58 Lithuanian Communications Sector 2011
from 30 Mbps to 100 Mbps 30.6 % 100 Mbps and higher 9.4 %
from 10 Mbps to 30 Mbps from 144 Kbps to 2 Mbps 11.8 % 10.7 %
from 2 Mbps to 10 Mbps 37.5 %
Figure 80. Distribution of fixed broadband communication subscribers against the download speed rate in 2011, per cent Source: RRT
During the time period of 2008–2011 the trend of growth of speed rate, chosen by the subscribers of broadband Internet access, provided by using fixed communication technologies was observed. While in 2008 almost 57.1 per cent of subscribers chose the Internet access speed rate from 144 Kbps to 2 Mbps, during the time period of four years the number of such users reduced more than five times (down to 10.7 per cent) and the number of users of very high speed rate Internet access services, i. e. 30–100 Mbps or 100 Mbps and higher, reached 40 per cent in 2011 (29.1 per cent in 2010) (see Figure 81).
2011 m. 10.7 % 37.5 % 11.8 % 30.6 % 9.4 %
2010 m. 17.3 % 40.8 % 12.8 % 21.0 % 8.1 %
2009 m. 36.6 % 37.7 % 25.8 %
2008 m. 57.1 % 25.2 % 17.6 %
from 144 Kbps to 2 Mbps from 2 Mbps to 10 Mbps from 10 Mbps to 30 Mbps from 30 Mbps to 100 Mbps 100 Mbps and higher
Figure 81. Distribution of the subscribers, connected to the Internet by using fixed communication technologies against the speed rate in 2008–2011, per cent Source: RRT
The development of next generation networks (NGN), implemented by using fibre communication lines allows for satisfying the increasing demand for higher speed rate Internet access services. According to the data of the end of 2011, such speed rate was provided over fibre communication lines to 99.8 per cent of subscribers of the Internet access services of the speed rate of 100 Mbps and higher, provided by using fixed communication technologies and to 98.2 per cent of subscribers of the Internet access services of the speed rate of 30–100 Mbps (see Figure 82).
59 Lithuanian Communications Sector 2011
100 Mbps and higher 99.8 %
from 30 Mbps to 100 Mbps 1.1 % 98.2 %
from 10 Mbps to 30 Mbps 6.0 % 5.2 % 25.7 % 3.6 % 59.3 %
from 2 Mbps to 10 Mbps 6.0 % 3.7 % 20.4 % 63.6 % 6.2 %
from 144 Kbps to 2 Mbps 29.6 % 4.5 % 36.0 % 25.3 % 4.2 %
Leased lines CTV LAN Wireless communication lines xDSL FTTx
Figure 82. Distribution of fixed broadband communication subscribers, connected to the Internet by using different technologies, against the data download speed rate at the end of 2011, per cent Source: RRT
The rapid development of fibre communication in Lithuania allows for satisfying the increasing demand for speed rate. This did not remain unnoticed in the international space. According to the data of Netindex14, received in cooperation with SpeedTest.Net, at the end of 2011 Lithuania took the second spot among the world’s countries according to the Internet data download speed rate in households (the third spot in 2010) and the second spot according to the data upload speed rate (the second spot in 2010). According to the data of the same organization, Vilnius took the second spot among all the world’s cities according to the data upload speed rate in 2011, Kaunas took the fourth spot. In terms of the Internet data download speed rate both aforementioned cities were second only to the world’s leader Hong Kong (see Table 3).
Table 3. The top five of world’s cities, leading in terms of data transmission upload and download speed rate at the end of 2011 Data upload Data download 1. Vilnius 33.20 Mbps 1. Hong Kong 38.98 Mbps 2. Seoul 30.71 Mbps 2. Vilnius 38.50 Mbps 3. Hong Kong 26.36 Mbps 3. Kaunas 32.74 Mbps 4. Kaunas 25.59 Mbps 4. Sofia 31.18 Mbps 5. Constanza 21.29 Mbps 5. Constanza 30.79 Mbps Source: Netindex
At the end of 2011, as at the end of 2010, 13 Internet service providers had direct (not via other Lithuanian Internet access providers) international Internet communication channels. At the end of 2011 the total speed rate of direct international Internet communication channels was 146 070 Mbps. Compared to 2010, when the speed rate reached 93 787 Mbps, it grew by almost 56 per cent and compared to 2009 – more than three times. At the end of 2011 TEO LT, AB was able to ensure the highest international channels speed rate (77 450 Mbps), the international channels speed rate, ensured by Bitė Lietuva UAB reached 24 576 Mbps, the subsidiary of Lattelekom SIA – 17 700 Mbps, Nacionalinis Telekomunikacijų Tinklas UAB – 8 500 Mbps.
60 Lithuanian Communications Sector 2011
3.2. Other Data Transmission Services
The data transmission services referred to in the present chapter of the Report cover all the (wholesale and retail) data transmission services, with the exception of the Internet access and leased lines services. In 2011 the data transmission services were provided by using virtual private network (VPN), Internet protocol (IP), Frame Relay, Ethernet, Ethernet VLAN, dial-up, PSTN, ISDN, DSL, DXX, MPLS, SHDSL and other technologies. The revenues from provision of data transmission services, received in 2011, amounted to LTL 87.0 million and, compared to 2010, reduced by 2.5 per cent (see Figure 83).
100 3.2 % 3.5 % 3.6 % 4 % 2.9 % 75 2.4 % 3 % 1.6 % 1.7 % 50 2 %
25 1 % 40.1 46.8 71.7 90.4 91.0 89.2 87.0 0 0 % 2005 m. 2006 m. 2007 m. 2008 m. 2009 m. 2010 m. 2011 m. The revenues on the other data transmission services market The share on the electronic communications market Figure 83. The size of the data transmission services market, LTL million and its share on the electronic communications market, measured by revenues, in 2003–2011, per cent Source: RRT
Although the revenues, received for provision of data transmission services, reduced in 2011, the services retained a small trend of growth (by 0.1 percentage point) in the structure of electronic communication services, i. e. from 3.5 per cent (in 2010) to 3.6 per cent (in 2011). The data transmission services revenues share on the electronic communications market grew throughout the period of 2005–2011. At the end of 2011 data transmission services were provided to 15.3 thousand subscribers, i. e. to 4.1 per cent more than at the end of 2010 and to 27.8 per cent less than in 2008, when the data transmission services were used by the largest number of customers throughout the entire time period of 2005–2011 (see Figure 84). The average revenues from provision of data transmission services from one subscriber per one month (ARPU) in 2011 reached LTL 485.5 thousand, i. e. 9.5 per cent less than in 2010, when the revenues reached LTL 536.2.
100 24,0 26.8 24.2 23.9 19.1 18.0 75 21.2 18,0 15.3 1.4 14.7 50 2.5 12.5 13.7 12,0
25 7.3 6,0 5.4 37.5 45.4 53.7 63.5 66.9 65.3 67.8 0 0,0 2005 2006 2007 2008 2009 2010 2011
Retail data transmission services revenues Wholesale data transmission services revenues Number of subscribers
Figure 84. The revenues for provision of wholesale and retail data transmission services, LTL million and the number of subscribers of data transmission services, thousand, in 2005–2011 Source: RRT
61 Lithuanian Communications Sector 2011
In 2011 the revenues from wholesale data transmission services reached LTL 19.1 million and were 20.1 per cent lower than in 2010. In 2011 wholesale data transmission services were provided by 7 undertakings, in 2010 there were 6. The revenues from provision of retail data transmission services grew by 3.8 per cent in 2011 and reached LTL 67.8 million. At the end of 2011, as at the end of 2020, the services were provided by 15 undertakings. TEO LT, AB received most revenues from data transmission services (both wholesale and retail), amounting to 62.4 per cent of the total revenues of the market (see Figure 85).
TEO LT, AB 62.4 %
Others 3.4 % Public Enterprise Plačiajuostis Internetas State Enterprise 2.9 % Bitė Lietuva UAB Data Logistics Center Infostruktūra 5.3 % UAB 16.0 % 10.0 % Figure 85. The market shares, occupied by the providers of data transmission services according to revenues in 2011, per cent Source: RRT
In 2011 the largest amount of revenues from the data transmission activities was received by TEO LT, AB, who provided both wholesale and retail data transmission services. The share of the data transmission services market of the said service provider reached 62.4 per cent in 2011. State Enterprise Infrastruktūra had 16 per cent of the market, Data Logistics Center – 10 per cent, Bitė Lietuva UAB – 5.3 per cent. The said three undertakings provided only retail data transmission services. Public Enterprise Plačiajuostis Internetas, the enterprise, providing data transmission services to public sector institutions and community members in rural areas, occupied 2.9 per cent of the data transmission services market.
3.3. Wholesale Access
Wholesale access is an especially important segment of the electronic communications market, whose development, to a certain extent, encourages the development of both broadband communications and voice services markets. The services receive special attention both in Lithuania and in the EU institutions. The Recommendation on Next Generation Access Networksxvi, which entered into effect in 2010, laid the foundations for unified and efficient regulation of development of next generation networks throughout the EU, which is likely to allow for reaching the especially ambitious targets, laid down in the Digital Agenda for Europe.15 The following wholesale access services are distinguished in Lithuania: bitstream access, access to the unbundled local loop (ULL), dark fibre acess and the service of access to communications cable duct system (hereinafter referred to as ducts), which is the most relevant at the moment. The present part of the report presents the information on the wholesale services, provided by Lithuanian operators in 2011. xvi Commission Recommendation of 20 September, 2010 on regulated access to Next Generation Access (NGA) Networks, Official Journal L 251, 25/09/2010 p. 0035 - 0048
62 Lithuanian Communications Sector 2011
General market overview
Wholesale access covers all the wholesale services, provided to other Internet access service providers, intended for provision of retail Internet access services to end service users. Those are the services of bitstream access, access to unbundled local loop, access to dark fibre and other services. In 2011 wholesale access services were provided by 21 providers, i. e. 4 more than in 2010. The total revenues, received from provision of wholesale access services, amounted to LTL 65.2 million and, compared to 2010, grew by 12.4 per cent. The share of the revenues in the total revenues of the electronic communications market reached 2.7 per cent in 2011 and was 0.5 percentage point higher than in 2010
(see Figure 86).
70 2.7 % 3 % 60 2,2 % 50 1.9 % 2 % 40 1.4 % 30 0.9 % 0.8 % 0.6 % 20 1 % 10 13.0 17.3 25.3 42.1 54.6 58.0 65.2 0 0 % 2005 2006 2007 2008 2009 2010 2011 The revenues for provision of wholesale access services The share on the electronic communications market
Figure 86. The size of the wholesale access services market, measured by revenues, LTL million and its share on the electronic communications market, per cent, in 2005–2011 Source: RRT
The same undertakings, i. e. Satgate UAB, TEO LT, AB and Skaidula UAB remained the leaders of the wholesale access services provision market, measured by revenues in 2011. Satgate UAB occupied the largest share of the market, i. e. 54.9 per cent. During the year the said undertaking increased its market share by 8.9 percentage points. In 2011 the users of the wholesale access services, provided by Satgate UAB, without exception were providers of electronic communications services, operating in foreign countries. In 2011 TEO LT, AB occupied 22.3 per cent of the wholesale access services market. During the year the market share of the said undertaking reduced by 6 percentage points. The market share of Skaidula UAB reduced by 1.3 percentage point: from 10.4 per cent (in 2010) to 9.1 per cent (in 2011). In 2011 Public Enterprise Plačiajuostis Internetas occupied 4.7 per cent of the wholesale access services market, Nacionalinis Telekomunikacijų Tinklas UAB – 2.8 per cent, the subsidiary of LATTELECOM SIA – 2.1 per cent and other service providers jointly occupied 4.1 per cent of the market (see Figure 87).
TEO LT, AB Skaidula UAB 9,1 % 22.3 % Public Enterprice Plačiajuostis internetas; 4.7 % Nacionalinis telekomunikacijų tinklas Satgate UAB 54.9 % UAB 2.8 % LATTELEKOM SIA branch 2.1 % Others 4.1 %
Figure 87. The structure of wholesale access services market, measured by revenues, against the providers in 2011, per cent Source: RRT
63 Lithuanian Communications Sector 2011
Wholesale access to unbundled local loop
The following local loops, to which access can be provided, are distinguished in Lithuania: fully unbundled local fibre communication lines, fully unbundled shielded twisted pair (STP) lines, fully unbundled unshielded twisted pair (UTP) lines and fully and shared unbundled local metallic twisted pair lines. However in 2011 only the service of access to the fully or shared unbundled local metallic twisted pair lines was provided. The undertakings, providing access to fully or shared unbundled local metallic twisted pair lines, on the basis of the said service, can provide retail Internet access services, by using the xDSL technology or voice services. The access to the fully and shared unbundled local metallic twisted pair line can be provided by the operators, providing the access network, which consists of local metallic twisted pair lines. In each of the year during the time period of 2006–2010 an increased number of such points of access was provided, however in 2011 the number reduced by 13 per cent. The total number of the provided points of access to the local metallic twisted pair lines reached 750 at the end of 2011, including 623 totally unbundled (695 in 2010) and 127 shared unbundled access to the local metallic twisted pair lines (167 in 2010) (see Figure 88). The reduction of the number of provided points of access to the local metallic twisted pair line reflects the trends of development of the technologies, used for provision of retail Internet access services, i. e. the subscribers of the Internet access services chose other technologies of access to the Internet than the local metallic twisted pair lines for receiving the Internet access (see Figure 88).
2011 623 127
2010 695 167
2009 121 494
2008* 478
2007* 443
2006* 292
Fully unbundled access Partially unbundled access
* not differentiated according to the way of unbundling of the local loop
Figure 88. The number of provided points of access to fully or shared unbundled local metallic twisted pair lines in 2006–2011 Source: RRT
In 2011 the services of access to the local metallic twisted pair line were provided by one operator, i. e. TEO LT, AB, which by Order No. 1V-629 of the Director of RRT of 16 June, 2011 was recognized the undertaking with significant power on the market of unbundled access to the local loop and was obliged to provide access to the fully unbundled local fibre communication lines, fully unbundled shielded twisted pair lines, fully unbundled unshielded twisted pair lines and fully and shared unbundled local metallic twisted pair lines to other operators. TEO LT, AB provided the services of access to fully and shared unbundled local metallic twisted pair line to two providers of retail electronic communications services: Baltnetos Komunikacijos UAB and State Enterprise Infostruktūra.
64 Lithuanian Communications Sector 2011
Bitstream access services
At the end of 2011 bitstream access services to other Internet access service providers were provided by TEO LT, AB. The services were provided only over metallic twisted pair lines by using the xDSL technology. In 2011 bitstream access services were received by 10 undertakings. At the end of 2011 TEO LT, AB provided 1 194 points of bitstream access to other Internet access service providers, i. e. 6.9 per cent less than in 2010. From 2005 till 2011 the number of such points of access, provided by TEO LT, AB reduced by more than 55 per cent, i. e. from 2681 to 1194 (see Figure 89). Taking into consideration the popularity of xDSL as an Internet access provision technology, which has been reducing each year and the development of fibre, mobile and wireless communication, the demand for wholesale access, based by the xDSL technology is also likely to reduce.
2 681 2 155 2 363 2 217 1 606 1 282 1 194
2005 2006 2007 2008 2009 2010 2011
Figure 89. The number of points of bitstream access, provided by TEO LT, AB in 2005–2011 Source: RRT
Wholesale dark fibre access
In 2011 the revenues, received for the services of provision of dark fibre to other undertakings, amounted to LTL 20 million and were 1.5 per cent higher than in 2010 (see Figure 90). The service was provided by 14 undertakings (10 in 2010). In 2011 access to 2 720 dark fibre lines was provided, i. e. 14.8 per cent more than in 2010. Such rate of growth of provided points of access was almost 3 times more rapid than during the time period of 2009–2010, when the number of provided points of access grew by 5 per cent each year.
25 2 720 3 000 2 257 2 369 20 1 848 2 000 15 891 10 1 000 5 6.9 16.8 20.9 19.7 20.0 0 0 2007 2008 2009 2010 2011 Revenues Number of provided points of access Figure 90. The revenues from the dark fibre access, LTL million and the number of points of access provided in 2007–2011 Source: RRT
65 Lithuanian Communications Sector 2011
In 2011 TEO LT, AB occupied the largest share of dark fibre access market in terms of provided points of access, i. e. 41.2 per cent, however the market share, occupied by TEO LT, AB has been reducing: by 1.9 percentage points in 2010 and by 4.8 percentage points more in 2011 (see Figure 91).
37.2 % 48.1 % 59.9 % 52.1 % 54.0 % 58.8 %
62.9 % 51.9 % 40.2 % 47.9 % 46.0 % 41.2 %
2006 2007 2008 2009 2010 2011 Other service providers TEO LT, AB Figure 91. The structure of dark fibre access market according to the number of points of access provided in 2006–2011, per cent Source: RRT
Similar trends can be observed when analyzing the structure of dark fibre access market in terms of revenues. The share of the market leader, i. e. TEO LT, AB, measured by revenues, has been gradually reducing during the time period of 2007–2011 from 64 per cent (in 2007) down to 47.1 per cent (in 2011) (see Figure 92). During 2011 the market share of TEO LT, AB reduced by 1.6 percentage points. The market share of 3 out of 14 dark fibre access market participants surpassed 5 per cent: apart from TEO LT, AB, occupying 47.1 per cent of the market, 29.8 per cent of the market was occupied by Skaidula UAB, whose market share reduced by 1 percentage point in 2011 and 15.3 percent of the market was occupied by Public Enterprise Plačiajuostis Internetas, whose market share grew by 0.7 percentage point during 2011.
2011 47.1 % 29.8 % 15.3 % 7.8 %
2010 48.7 % 30.8 % 14.6 % 5.9 %
2009 52.0 % 27.0 % 13.3 % 8.0 %
2008 60.0 % 23.0 % 10.0 % 7.0 %
2007 64.0 % 34.0 % 2.0 % TEO LT, AB Skaidula UAB Public Enterprise Plačiajuostis Internetas* Others
* Public Enterprise Plačiajuostis Internetas has been providing its data on the provided dark fibre access services since the 2nd quarter of 2008. Figure 92. The structure of dark fibre access market according to the revenues in 2007–2011, per cent Source: RRT
Summary
In 2011 the total revenues, received from provision of Internet access services reached LTL 434.4 million and, compared to 2010, grew by 1.9 per cent and amounted to 18.1 per cent of the total of the revenues, received from provision of electronic communications services. In 2011 the number of subscribers of Internet access services grew by 12.5 per cent and at the end of the year amounted to 989.2 thousand, including 99.96 per cent using broadband Internet services. The
66 Lithuanian Communications Sector 2011
penetration of subscribers of broadband Internet access services reached 30.9 per cent at the end of 2011 and was 3.8 per cent higher than at the beginning of 2010. At the end of 2011 74.0 per cent (or 731.9 thousand) subscribers used fixed communication technologies for receiving broadband Internet access services and 26.0 per cent (or 256.9 thousand subscribers) – mobile communication technologies by using personal computers. The penetration of broadband Internet, provided by using fixed communication technologies at the end of 2011 reached 22.9 per cent and by using mobile communication technologies – 8 per cent. At the end of 2011 broadband Internet services, provided over fibre communication lines, were received by 359.9 thousand subscribers, i. e. 17 per cent more than in 2010, which amounted to 36.4 per cent of all the subscribers of broadband Internet access services. 37.5 per cent of subscribers chose the most popular, i. e. 2–10 Mbps Internet access services speed rate and already 30.6 per cent of Internet access service subscribers chose the 30–100 Mbps speed rate. During 2011 the revenues, received from provision of data transmission services, reduced by 2.5 per cent and amounted to LTL 87 million. The number of subscribers of data transmission services grew by 4.1 per cent and reached 15.3 thousand at the end of the year. The revenues, received from provision of wholesale Internet access, amounted to LTL 65.2 million in 2011 and, compared to 2010, grew by 12.4 per cent. In 2011 the size of the market of access to fully and shared unbundled local metallic twisted pair line, measured by the number of provided points of access, reached 750 access points: 623 point of access (83.1 per cent) to the fully unbundled and 127 (16.9 per cent) – to shared unbundled local metallic twisted pair lines. The services were provided to other Internet access service providers by one undertaking, i. e. TEO LT, AB. At the end of 2011 1 194 points of bitstream access were provided. The services were provided by one undertaking, i. e. TEO LT, AB. In 2011 the revenues, received for provision of dark fibre access, amounted to LTL 20 million, i. e. 1.5 per cent more than in 2010. 2 720 points of dark fibre access were provided in 2011, i. e. 14.8 per cent more than in 2010.
9 http://ec.europa.eu/information_society/digital-agenda/scoreboard/docs/pillar/cocom_broadband_july_2011.pdf 10 http://ec.europa.eu/information_society/digital-agenda/scoreboard/graphs/index_en.htm 11 http://www.ftthcouncil.eu/resources 12 http://www.idate.org/en/Research-store/Collection/Market-Data-Reports_23/ 13 http://ec.europa.eu/information_society/digital-agenda/scoreboard/graphs/index_en.htm 14 http://www.netindex.com 15 http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/581&format=HTML&aged=1&language=LT&guiLanguage=lt
67 Lithuanian Communications Sector 2011
4. Television and Radio
4.1. Television Services
The information technologies convergence processes did not surpass the television services market. Today viewers can watch television programs not only by using a television set, but also by a personal computer, a tablet or a smartphone. The new technologies (high definition, 3D and mobile television) provide the possibilities to enjoy and create “especially clear and vivid images“16 and the new digital equipment opens a broader range or programs of exceptional quality. According to the data of Euradata TV Worldwide17, on the global level in 2011 one viewer spent 3 hours and 16 minutes per day watching television programs on the average, i. e. 6 minutes more than in 2010. The interest in television has also been growing due to the increasing supply of the necessary equipment.
General market overview
In 2011 both free-of-charge and pay-TV services were provided in Lithuania. The pay-TV services were provided over analogue and digital cable television (CTV), multichannel multipoint distribution system (MMDS), digital Internet Protocol Television (IPTV), digital terrestrial television (DVB-T) and digital satellite television networks and the free-of-charge television was provided over analogue and digital terrestrial television networks. In 2011 Lithuania's residents could view 14 free-of-charge (not coded) digital television programs: 12 of them (i. e. BTV, LNK, TV3, TV6, TV1, Lietuvos rytas.tv, Balticum Televizija, Lietuvos Televizija (LTV1), LTV2, Info TV, LIUKS!, Sport) were broadcasted by Lithuanian broadcasters and 2 (i. e. TV Polonia and BBC World News) were re-broadcasted by foreign broadcasters. 8 free-of-charge programs (i. e. BTV, LNK, TV3, TV6, TV1, Lietuvos rytas.tv, Balticum Televizija, Lietuvos Televizija (LTV1)) were broadcasted over analogue terrestrial television networks.18 According to Resolution No. 1492 of the Government of the Republic of Lithuania of 25 November, 2004 “On the approval of the description of the model of implementation of digital television in Lithuania” (Official Gazette Valstybės Žinios, 2004, No. 171-6336; 2011, No. 155-7362), the analogue terrestrial television must be completely switched off till 29 October, 2012 and the smooth transition towards the advanced digital television broadcasting technologies, ensuring more efficient use of radio frequencies and allowing for provision of a wider range of more diverse services must be performed. The viewers of analogue terrestrial television, who wish to continue viewing the television programs, broadcasted free of charge, should, before the said date, purchase the digital television signal coding set top box, able to receive the DVB-T MPGE-4 signal or a television set with the installed DVB-T MPGE-4 receiver. The switching off of the analogue terrestrial television will not have any effect to subscribers of neither analogue, nor digital pay-TV.19 The number of providers of pay-TV services changed insignificantly in 2011. The number of analogue cable television providers reduced by 10.6 per cent (see Table 4). Several changes occurred on
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the market: 4 providers of analogue CTV services (V. Bublienė’s Personal Enterprise Kelmės Kabelinė Televizija, Rietavo Televizija UAB, Palionis’s Enterprise Miestelėnai and Telelanas UAB) disconnected the performed activities. After the merger of Kabeliniai Ryšių Tinklai UAB, Marijampolės Kabelinė Televizija UAB, Telesat UAB and Alytaus Kabelinė Televizija UAB, the Cgates UAB was launched. The said company provided analogue CTV services. A similar situation came into existence with Telerena UAB and Lignita UAB. The provision of their analogue CTV services was taken over by Splius UAB. In addition, another undertaking, i. e. Horda UAB, entered the market.
Table 4. The number of providers of pay-TV services in 2010–2011 Cable TV Analogue CTV Digital CTV MMDS DVB-TV Satellite TV IPTV 2011 44 42 19 3 2 1 5 2010 49 47 18 3 2 1 6 Source: RRT
According to the data of study of the residents’ readiness for transition to the digital terrestrial television, commissioned by the Ministry of Transport and Communications of the Republic of Lithuania in December 201120, the share of television subscribers, who used pay-TV services, grew by 5 percentage points during the year and reached 58 per cent. At the end of 2011 each fourth resident of the country used free-of-charge analogue terrestrial television. As stated in the performed study of the digital terrestrial television, a part of the residents, who viewed analogue terrestrial television programs, also used other ways of provision of television services. Since only the providers of pay-TV services provided data to RRT, the present Report contains more information on pay-TV services. At the end of 2011 664.1 thousand subscribers or almost one half (49.8 per cent) of all the households used pay-TV services. During 2011 the number of subscribers of pay-TV grew by 4.1 per cent (see Table 5). The largest influence on the number of subscribers of pay-TV was brought by the subscribers of IPTV, DVB-T and satellite television, whose number correspondingly grew by 18.1 per cent, 12.8 per cent and 6.1 per cent in 2011 (see Table 5). The number of subscribers of digital CTV, which grew by 81.1 per cent, increased the total number of CTV subscribers only by 0.3 per cent. Such growth of the number of digital CTV subscribers resulted from the correspondingly reducing number of analogue CTV subscribers.
Table 5. The number of subscribers of pay-TV, pcs. and the change, per cent in 2010–2011
The number of subscribers 2010 2011 Change
CTV: 404 976 406 389 +0.3 % Analogue CTV 361 629 327 892 -9.3 % Dgital CTV 43 347 78 497 +81.1 % MMDS 20 005 18 725 -6.4 % DVB-T 63 695 71 865 +12.8 % Satellite television 78 873 83 661 +6.1 % IPTV 70 681 83 485 +18.1 % Total 638 230 664 125 +4.1 % Source: RRT
69 Lithuanian Communications Sector 2011
Subscribers of CTV amounted to the largest share in the total structure of television services in 2011 (i. e. 61.2 per cent) (see Figure 93). The share of CTV subscribers in the total structure of pay-TV services reduced: compared to 2010, in 2011 the share of CTV subscribers reduced by 2.3 percentage points and, compared to 2009 – by 5.4 percentage points. The subscribers of IPTV, DVB-T and satellite television strengthened their positions in the total structure of pay-TV services: during 2011 their share correspondingly grew by 1.5, 0.8 and 0.2 percentage points.
2011 61.2 % 10.8 % 12.6 % 2.8% 12.6%
2010 63.5 % 10.0 % 11.1 % 3.1% 12.4%
2009 66.6 % 7.8 % 9.7 % 3.5% 12.4%
CTV DVB-T IPTV MMDS Satellite television
Figure 93. Distribution of pay-TV subscribers against the ways of provision of television services in 2008–2011, per cent Source: RRT
According to the data of RRT, compared to 2010, in 2011 the revenues from provision of pay-TV services grew by 7.5 per cent, i. e. from LTL 159.1 million to LTL 171 million. The share of distribution of revenues is not analogical to distribution of subscribers: although the share of revenues, received from provision of CTV services, is the largest (i. e. 46.6 per cent) (see Figure 94), it is 14.6 percentage points lower than the share of the CTV services market in terms of the share of subscribers of pay-TV (61.2 per cent). The distribution of shares of the satellite television market in terms of revenues and the number of subscribers is opposite: the market share, occupied by satellite television in terms of the number of subscribers is 12.6 per cent however according to the revenues the market share reaches 22.8 per cent. Such differences of the corresponding shares of the pay-TV market can be explained by the differences of the average revenues, received from one subscriber per month (ARPU) against the different ways of provision of television programs. The lowest ARPU are received from the CTV subscribers (see Table 6), they reach LTL 16.3 per month, while the highest ARPU are received from the satellite television subscribers (LTL 38.8 per month).
2011 46.6 % 3.2 % 14.9 % 12.5% 22.8%
2010 49.4 % 3.7 % 12.2 % 10.6% 24.0%
2009 60.5 % 5.4 % 11.9 % 6.7% 15.4%
CTV MMDS IPTV DVB-T Satellite television Figure 94. Distribution of the revenues from pay-TV activities against the ways of provision of television services in 2009-2011, per cent Source: RRT
From 2008 till 2011 the cable television ARPU grew by 0.4 per cent (see Table 6) and the satellite television services have been growing cheaper: from 2009 till 2011 the ARPU reduced by 11.6 per cent. With the increase of the number of subscribers of DVB-T, in 2011, compared to 2010, the ARPU from the DVB-T services grew by 11.7 per cent. Forecasting the future trends, a further growth of both the number of
70 Lithuanian Communications Sector 2011
subscribers and the share of revenues of digital terrestrial television is possible. In addition, development of IPTV is possible: the market share has been growing in terms of both the number of subscribers and the revenues, since the ARPU trend has been increasing, which shows that the subscribers choose the services taking into consideration not only the price, but also the quality.
Table 6. The dynamics of the ARPU for the pay-TV services against the ways of provision of television services in 2008–2011, LTL
2008 2009 2010 2011
Cable television 14.9 16.1 16.2 16.3
MMDS 20.2 27.0 24.7 24.6
IPTV 23.2 21.8 22.9 25.4
DVB-T - 20.4 22.2 24.8
Satellite television - 43.9 40.4 38.8
Total ARPU 15.8 17.7 20.8 21.5
Source: RRT
In 2011 the largest share of pay-TV revenues, i. e. 26.9 per cent was received by TEO LT, AB (the said company provided IPTV and DVB-T services), Viasat AS, a provider of satellite television services, received 22.8 per cent and Mikrovisatos TV UAB, a provider of analogue and digital CTV and MMDS – 7.1 per cent of revenues for television services. The revenues of Cgates UAB (provider of analogue and digital CTV and MMDS) amounted to 4.7 per cent of all the television revenues, although the company has been engaged in electronic communications activities only since the 3rd quarter of 2011 (see Figure 95).
Mikrovisatos TV UAB 7.1 % Viasat AS, 22.8 % Cgates UAB 4.7 %
Balticum TV UAB 6.7 % TEO LT, AB 26.9 % Init UAB 4.2 %
Others Splius UAB 17.3 % 4.3 % Vinita UAB 6.0 % Figure 95. Distribution of revenues, received from provision of pay-TV services against the service providers in 2011, per cent Source: RRT
As throughout the world, Lithuanian providers of electronic communications networks and/or services provide not only individual services, but also bundled offers, I e. one operator or service provider offers to purchase several electronic communications services, including television services, as one bundle of services for one price. The payment for such services is effected by paying one bill.
71 Lithuanian Communications Sector 2011
At the end of 2011 11 providers of electronic communications services provided such bundled offers, including 10, offering double-play and 5 – triple-play offers (4 companies provided both double and triple play offers). As in 2010, in 2011 double-play offers were most extensively used. During the 2011 the number of subscribers, using double-play offers, grew by 28.7 per cent (see Table 7). In 2011 the providers of electronic communications networks and/or services provided bundled offers of two types, in which television services were offered, i. e. television services together with public fixed telephone communications or Internet access services. The television and Internet access bundle was significantly more popular, since it was chosen by 47.7 thousand subscribers and the television and public fixed telephone communications service bundle – only by 111 subscribers.
Table 7. The number of subscribers, who used double-play bundled offers and the change, per cent, in 2010– 2011
Double-play bundled offers 2010 2011 The change
The total number of subscribers, who used double-play bundled offers 98 382 126 600 +28.7 %
- Public fixed telephone communications and Internet access services 143 167 +16.8 %
- Public fixed telephone communications and television services 27 111 +311.1 %
- Internet access and television services 60 369 47 684 -21.0 %
- Public mobile telephone communications and Internet access services 38 087 78 638 +106.5 %
Source: RRT
Analogue television
The television programs, provided by analogue signals in Lithuania are broadcasted in two ways, i. e. in the terrestrial way and over cable television networks. Analogue terrestrial television is provided free of charge and analogue cable television is pay-TV. Analogue terrestrial television. Analogue terrestrial television is planned to be switched off in Lithuania on 29 October, 2012. The study, performed in December 2011, showed that 94 per cent of respondents were aware of the transition to digital broadcasting. Such changes on the television services market are especially relevant to rural residents, 50 per cent of whom still use analogue terrestrial television, while only 12 per cent use the said type of television in cities and towns. The said data evidence the changes on the television services market, relating to both growth of quality parameters of television services and the growth of the pay-TV sector. Analogue cable television. At the end of 2011 the analogue CTV services were provided by 42 undertakings. During 2011 they received LTL 67.6 million for provision of analogue CTV services, i. e. LTL 3.6 million less than in 2010 and 5.6 times more than for digital CTV services. The number of subscribers of analogue CTV reduced by 9.3 per cent and at the end of the year reached 327.9 thousand (361.6 thousand at the end of 2010) (see Table 5). The largest number of subscribers of such television was attracted by Vinita UAB (18.2 per cent) and Cgates UAB (15.2 per cent) (see Figure 96).
72 Lithuanian Communications Sector 2011
Others Balticum TV UAB 20.4 % 14.1 %
Rygveda UAB Cgates UAB 4.9 % 15.2 % Elekta UAB 2.4 % AVVA UAB 2.2 % Init UAB 7.3 % Vinita UAB 18.2 % Mikrovisatos TV UAB Splius UAB 9.6 % 5.6 % Figure 96. The structure of the analogue cable television market in terms of the number of subscribers in 2011, per cent Source: RRT
Digital television
Out of all the ways of provision of digital television only digital terrestrial television is provided in Lithuania free of charge, all the other ways of provision of digital television services (CTV, MMDS, satellite TV and IPTV) are pay-TV. According to the data of RRT, the use of digital pay-TV grew by 21.5 per cent during 2011 and at the end of the year it was used by 336.2 thousand subscribers (276.6 thousand at the end of 2010), which amounted to 50.6 per cent of all the subscribers of pay-TV or 25.2 per cent of all the households. Satellite television remained the most popular digital pay-TV, IPTV was not too far behind: at the end of 2011 the said two types of television were used correspondingly by 24.9 per cent and 24.8 per cent of digital pay-TV subscribers (see Figure 97).
CTV Satellite CTV Satellite 15.7 % MMDS TV 23.3 % TV 24.9 % 28.5 % 7.2 % MMDS 5.6 % DVB-T IPTV DVB-T IPTV 23.0 % 25.6 % 21.4 % 24.8 %
2010 2011 Figure 97. Distribution of subscribers of digital pay-TV against the ways of provision of television services in 2010-2011, per cent Source: RRT
During 2011 the revenues from the digital pay-TV activities grew by 17.8 per cent and reached LTL 103.4 million. The said revenues amounted to 60.5 per cent of all the pay-TV revenues (LTL 171 million). In 2010 the revenues from digital pay-TV activities amounted to LTL 87.8 million.
73 Lithuanian Communications Sector 2011
The main providers of digital television services are TEO LT, AB and Viasat AS, who, during 2011, correspondingly received 44.5 per cent and 37.6 per cent of revenues from provision of digital television services (see Figure 98).
Balticum TV UAB Viasat AS 3.6 % 37.6 % Mikrovisatos TV UAB 3.8 % Cgates* UAB TEO LT, AB 2.3 % 44.5 % Others 8.1 %
Figure 98. Distribution of revenues from digital pay-TV activities against the service providers in 2011, per cent Source: RRT
Digital satellite television. In terms of the number of subscribers, satellite digital television is leading on Lithuanian digital pay-TV market. It is broadcasted via the ASTRA 4A satellite, which covers the entire territory of Lithuania. As it has already been mentioned, Viasat AS is the only company who broadcasts and rebroadcasts digital satellite pay-TV in Lithuania. At the end of 2011 satellite television was used by 83.7 thousand subscribers, i. e. 6.1 per cent more than at the end of 2010. Digital terrestrial television. At the end of 2011 pay DVB-T services, provided by using the MPEG- 4 standard, were provided in Lithuania by TEO LT, AB and Balticum TV UAB. At the end of 2011 DVB-T services were used by 71.9 thousand subscribers (63.7 thousand in 2010) (see Figure 99), i. e. 12.9 per cent more than at the end of 2010. During 2011, the revenues from the DVB-T activities grew by 26.3 per cent, i. e. from LTL 16.95 million (in 2010) up to LTL 21.4 million (in 2011). 99.7 per cent of the revenues for the DVB-T services, received during 2011, were received by TEO LT, AB.
46 712 50 611 53 973 58 722 63 695 68 071 70 455 71 891 71 865
QIV 2009 QI 2010 QII 2010 QIII 2010 QIV 2010 QI 2011 QII 2011 QIII 2011 QIV 2011
Figure 99. The dynamics of the number of subscribers of pay DVB-T in 2009–2011 Q Source: RRT
Digital cable television and multichannel multipoint distribution system television. At the end of 2011 digital CTV and MMDS television services were provided by 19 service providers (19 providers provided the services over CTV networks, including 3 – over MMDS networks). The digital CTV was broadcasted by the DVB-C standard and for broadcasting of MMDS operators chose the DVB-C and DVB-T standards. The MMDS, provided over wireless communication technologies, was available to the residents of the major cities of Lithuania and was broadcasted only digitally.
74 Lithuanian Communications Sector 2011
During 2011 the number of subscribers of digital CTV grew by 81.1 per cent and at the end of the year reached 78.5 thousand (43.3 thousand in 2010), the number of subscribers of MMDS reduced by 6.4 per cent and at the end of the year reached 18.7 thousand (20 thousand in 2010) (see Figure 100). The trend of reduction most likely occurred due to the relatively more expensive price of MMDS services to the user, compared to the prices of digital CTV services. The ARPU from cable television (see Table 6) amounted to LTL 16.3 per month, which was almost 1.5 times less than the ARPU from MMDS (LTL 24.6 per month).
78 497 63 791 48 096 53 068 38 739 43 347 26 634 29 319 32 322
21 148 20 915 20 525 19 904 20 005 19 521 19 230 19 143 18 725
QIV 2009 QI 2010 QII 2010 QIII 2010 QIV 2010 QI 2011 QII 2011 QIII 2011 QIV 2011
Subscribers of digital MMDS Subscribers of digital CTV
Figure 100. The dynamics of the number of subscribers of digital CTV and MMDS in 2009–2011 Q Source: RRT
With the increase of the number of subscribers of digital CTV (81.1 per cent during 2011), the revenues from provision of the said television services, compared to 2010, grew to a certain extent slower, i. e. by 63.5 per cent and amounted to LTL 12.1 million (LTL 7.4 million in 2010). LTL 5.5 million of revenues were received from digital MMDS television activities. Compared to 2010, the said revenues dropped by 6.8 per cent (LTL 5.9 million in 2010). Digital IPTV. At the end of 2011 7 undertakings provided digital IPTV services in Lithuania: TEO LT, AB, Penkių Kontinentų Komunikacijų Centras UAB, Transteleservis UAB, Miesto Tinklas UAB, Horda UAB, Kavamedia UAB and Dokeda UAB. The IPTV services were accessible to the residents in Lithuania’s major cities and districts. The television is peculiar in the manner that it opens to the viewer a lot of possibilities not only to enjoy high quality image, but also provides access to other services, such as virtual video rental, virtual cinema, personal channel, personal video recorder, television on desktop (TOD), which provides the possibility to record programs, electronic mail, the possibility to control the television set by a smartphone or a tablet and a lot of other possibilities. IPTV connects all the features, provided by the Internet, traditional television and video recorder and offers the user a lot of services, which cannot be offered by using any other way of provision of television services.21 IPTV together with digital terrestrial television has significant possibilities to develop in all the world’s regions, including Lithuania. The operators attempt to find the optimum ways for laying and use of FTTx (Fibre to the Home, Building, Nod, Office, etc.), since this technology enables to provide the Internet access and television services as one service bundle from one point of access. The large coverage of the network allows for development of digital terrestrial television.
75 Lithuanian Communications Sector 2011
During 2011 the number of IPTV subscribers in Lithuania grew by 18 per cent, i. e. from 70.7 thousand at the end of 2010 to 83.5 thousand at the end of 2011 (see Figure 101). The market share of TEO LT, AB in terms of the number of IPTV subscribers amounted to 95.7 per cent, the market share of Penkių Kontinentų Komunikacijų Centras – to 2.3 per cent. In 2011, with the increase of the number of subscribers of IPTV, the revenues from the television services, provided in the said way, also grew. The revenues from provision of IPTV services grew by 31.4 per cent, i. e. from LTL 19.4 million (in 2010) to LTL 25.5 million (in 2011).
57 839 60 327 62 737 65 898 70 735 73 409 75 096 79 045 83 485
QIV 2009 QI 2010 QII 2010 QIII 2010 QIV 2010 QI 2011 QII 2011 QIII 2011 QIV 2011
Figure 101. The dynamics of the number of subscribers of IPTV television in 2009–2011 Source: RRT
High definition television
High definition television (HDTV) in Lithuania can be transferred over DVB-T, CTV, IPTV and satellite networks. The high definition signal is transferred by a number of lines forming a larger image therefore each element of the high definition television image is clear and bright.22 In 2011, TEO LT, AB, having the largest number of DVB-T and IPTV subscribers in Lithuania, offered HDTV services to the subscribers of television services, provided by the both ways. The company offered three high definition television channels to its DVB-T subscribers: National Geographic Channel HD, Discovery HD Showcase and Eurosport HD. The subscribers, residing in Vilnius, Kaunas, Marijampolė and the outskirts of the said cities, were able to watch the said channels. The IPTV subscribers of TEO LT, AB were able to watch 5 high definition television channels: National Geographic Channel HD, Discovery HD Showcase, Eurosport HD, iConcerts HD and History HD.23 Viasat AS, the undertaking, providing television services over satellite communication, broadcasted National Geographic Channel HD, MTVN HD and Viasat Premier League HD over high definition television channel. Although high definition television in Lithuania can be transferred not only over satellite networks, but also via cable, IPTV and DVB-T networks, transfer of HDTV over the said networks is very limited (i. e. a relatively smaller number of HDTV programs can be transferred) due to the limited number of radio frequencies/channels, necessary for transfer of the said type of television. Other providers of television services (Balticum TV UAB, Penkių Kontinentų Komunikacijų Centras UAB, Sugardas UAB, Rygveda UAB, Kavamedia UAB and others) offered their viewers both the aforementioned and other high definition television programs, such as Bebe TV HD, Rush HD, HD1, MyZen TV HD, Luxe TV HD, ZDF HD, Astra Promo HD, Anixe HD, Mezzo Live HD and others.24
76 Lithuanian Communications Sector 2011
Summary
In 2011 the number of subscribers of pay-TV (including digital television) has been increasing: during the year the number of subscribers grew by 4.1 per cent and reached 664.1 thousand. At the end of 2011 the analogue terrestrial television services, provided free of charge, were used by 26 per cent of respondents. A part of residents, who watched analogue terrestrial television programs, also used other ways of provision of television services. The use of digital pay-TV grew by 21.5 per cent during 2011 and at the end of the year the said type of television was used by 336.2 thousand subscribers, which amounted to 50.6 per cent of all the subscribers of pay-TV or 25.2 per cent of all households. At the end of 2011 cable television was the most popular form of pay-TV – it was chosen by 61.2 per cent of all the subscribers of pay-TV, satellite television and IPTV took the second and third places (12.6 per cent each). With the increase of the number of subscribers of pay-TV, the revenues, received by the providers of pay- TV also grew: compared to 2010, in 2011 the revenues of providers of pay-TV grew by 7.5 per cent, i. e. from LTL 159.1 million up to LTL 171 million. The largest share of pay-TV revenues, i. e. 26.9 per cent was received by TEO LT, AB (provider of IPTV and DVB-T), Viasat AS (provider of satellite television) received 22.8 per cent and Mikrovisatos TV UAB (provider of analogue and digital CTV and MMDS) received 7.1 per cent.
77 Lithuanian Communications Sector 2011
4.2. Television and Radio Programs Transmission Services
During the time period of the last seven years the wholesale television and radio programs transmission services market, in terms of revenues, grew by more than 56 per cent. The growth of the market resulted from the rapid development of digital terrestrial television networks when preparing for transition from the analogue to digital television broadcasting. Two undertakings were engaged in the activities of wholesale provision of television and radio programs transmission services: Lietuvos Radijo ir Televizijos Centras AB provided the services of transmission of analogue terrestrial radio and analogue terrestrial television programs and TEO LT, AB and Lietuvos Radijo ir Televizijos Centras AB provided the services of transmission of digital terrestrial television programs.
General market overview
In 2011 the total revenues on the market of services of transmission of both analogue and digital terrestrial radio and television programs amounted to LTL 31.1 million and were 7.6 per cent higher than in 2010 (see Figure 102). In 2011 the share of the revenues of television and radio programs transmission services in the total structure of the electronic communications market amounted to 1.3 per cent and was 0.2 percentage point higher than in 2010. During 2011 the revenues from provision of analogue television and analogue radio programs transmission services correspondingly grew by 2 per cent and 7.1 per cent. A 15 per cent growth of the revenues from provision of digital television programs transmission services was observed during the same period.
19.9 20.6 25.3 28.3 30.4 28.9 31.1
2005 2006 2007 2008 2009 2010 2011
Figure 102. The revenues of the television and radio programs transmission services market in 2005–2011, LTL million Source: RRT
In 2011 the share of digital television programs transmission services revenues continued to grow in the total structure of television and radio programs transmission services market. Compared to 2010, in 2011 the share grew by 2.5 percentage points and amounted to 39.5 per cent of the market revenues.
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Terrestrial television programs transmission
Terrestrial television programs in Lithuania are broadcasted and transmitted in both analogue and digital format. The revenues for transmission of analogue terrestrial television programs amounted to LTL 15.4 million and, compared to 2010, grew by 2 per cent. In the overall structure of television and radio programs transmission services market, in terms of revenues, the share of the terrestrial television programs transmission market amounted to 89.3 per cent in 2011. The revenues for transmission of digital terrestrial television programs in 2011 amounted to LTL 12.3 million, i. e. 20.1 per cent less compared to the revenues, received from transmission of analogue terrestrial television programs however during the year the revenues, received from transmission of digital terrestrial television programs, grew 13 percentage points faster, i. e. up to 15 per cent, than the revenues from transmission of analogue terrestrial television programs (2 per cent) (see Figure 103). 88.6 per cent of the total of revenues from digital terrestrial television programs transmission services was received by Lietuvos Radijo ir Televizijos Centras AB, which amounted to LTL 10.9 million. The remaining revenues (i. e. 11.4 per cent), which amounted to LTL 1.4 million, were received by TEO LT, AB.
10.0 12.3 5.5 10.7
18.1 16.7 15.1 15.4
2008 2009 2010 2011
Analogue terrestrial Digital terrestrial
Figure 103. The dynamics of analogue and digital television programs transmission services revenues in 2008– 2011, LTL million Source: RRT
At the end of 2011 there were 122 analogue terrestrial television stations in Lithuania (27 were used for transmission of local and regional television programs, 95 – for national television programs) and 93 digital terrestrial television stations. 32 digital terrestrial stations were in the First digital terrestrial network and 27 in the Second digital terrestrial network of Lietuvos Radijo ir Televizijos Centras AB, 25 stations in the First digital terrestrial network and 6 in the Second digital terrestrial network of TEO LT, AB. In addition Balticum TV UAB broadcasted television programs via 2 stations and TEO LT, AB rebroadcasted television programs in the HDTV format via 2 stations. The forecasted coverage zones of digital terrestrial television (DVB–T) networks are shown in Figures 104–107.
79 Lithuanian Communications Sector 2011
Figure 104. First digital terrestrial network of Lietuvos Radijo ir Televizijos Centras AB
Source: RRT
Figure 105. Second digital terrestrial network of Lietuvos Radijo ir Televizijos Centras AB Source: RRT
80 Lithuanian Communications Sector 2011
Figure 106 First digital terrestrial network of TEO LT, AB Source: RRT
Figure 107. Second digital terrestrial network of TEO LT, AB Source: RRT
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Terrestrial radio programs transmission
In 2011 terrestrial radio programs were broadcasted only analogically. Digital radio broadcasts were abolished already in 2010 due to the slow technological development and poorly developed digital radio sets market.25 In 2011 analogue terrestrial radio programs transmission services were provided to other undertakings by Lietuvos Radijo ir Televizijos Centras AB. The size of the market, in terms of the revenues, amounted to LTL 3.3 million and, compared to 2010, grew by 7.1 per cent (see Figure 108). In the overall structure of the television and radio programs transmission services market the share of the analogue terrestrial radio programs transmission market, in terms of revenues, amounted to 10.7 per cent in 2011 (10.8 per cent in 2010).
4.71 3.67 3.11 3.33
2008 2009 2010 2011 Figure 108. The dynamics of radio programs transmission revenues in 2008–2011, LTL million Source: RRT
Broadcasters’ revenues from advertising
Although the broadcasters’ revenues from advertising are not a part of the revenues of the electronic communications sector, when evaluating the overall television and radio programs transmission market, the information allows for evaluating the broadcasters’ competitive standing in another aspect. According to the data of the Radio and Television Commission of Lithuania, 2011 saw a small increase of radio and television broadcasters’ revenues from advertising: compared to 2010, the revenues grew by 3.4 per cent and amounted to LTL 187.9 million.26 The share of the television broadcasters’ revenues from advertising in the overall structure of broadcasters’ revenues from advertising amounted to 86.8 per cent in 2011 and grew by 5 per cent during the year. The radio broadcasters’ revenues from advertising amounted to LTL 24.8 million and reduced by 6.1 per cent during the year (see Figure 109).
241.1 151.1 155.3 163.1
39.3 28.4 26.4 24.8 2008 2009 2010 2011 Radio Television Figure 109. The dynamics of revenues, received by radio and television broadcasters from advertising in 2008– 2011, LTL million
Source: Radio and Television Commission of Lithuania
82 Lithuanian Communications Sector 2011
To summarize the dynamics of the radio and television programs transmission services market in 2011, it should be noted that the 7.6 per cent growth of the revenues, received from provision of the said services resulted from the increase of the revenues from provision of digital television programs transmission services.
16 http://www.asorti.lt/site/files/Vaizdo_technika/Blu-ray/Samsung/BD_C6900.pdf 17 http://www.mediametrie.com/eurodatatv/communiques/international-tv-scores-in-2011.php?id=628 18 http://www.rtk.lt/lt/skaitmenine_televizija 19 http://www.skaitmenine2012.lt/lt 20 http://www.transp.lt/files/uploads//Gyventoju%20pasiruosimas%20pereiti%20prie%20STV.pdf 21 http://www.lkta.lt/lt.php?tech-IP-tv 22 http://www.gala.lt/node/1346 23 http://www.gala.lt/node/148/143 24 http://www.gala.lt/node/264; http://www.balticum.lt/?lt=1255596100, http://web.sugardas.lt/index.php?cid=135213 25 http://www.rtk.lt/assets/files/LRTK%20ataskaita%20Seimui%20uz%202009%20metus.doc 26 http://www.rtk.lt/lt/naujienos/pranesimai_spaudai/transliuotoju_ir_retransliuotoju_pajamos_per_2011_metus
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5. Leased Lines
The stability of demand for leased lines is determined by the diversity of use of the services. Leased lines services are used by both electronic communications market players and other undertakings. Electronic communications market players use leased lines for different public electronic communication networks laying or networks interconnection needs or for provision of Internet access services, other undertakings – most frequently for the purpose of ensuring high quality communication and for transfer of data between two points, more or less remote geographically. During the time period of 2005–2011 the number of analogue leased lines reduced on the market, while the demand for digital leased lines remained stable. The trends could be related to the change of the needs of service users and development of broadband communication.
General market overview
At the end of 2011 wholesale and/or retail leased lines services were provided by 11 undertakings – TEO LT, AB, Lietuvos Radijo ir Televizijos Centras AB, Lietuvos Geležinkeliai AB, Bitė Lietuva UAB, State Enterprise Infostruktūra, Cubio UAB, a subsidiary of Lattelekom SIA, Data Logistics Center UAB, Dicto Citius UAB, Linx Telecommunications UAB and Ektra UAB. Compared to 2010, in 2011 the revenues of the leased lines services market reduced by 17.9 per cent and amounted to LTL 27.1 million (see Figure 110). In the total structure of electronic communications revenues the market amounted to 1.1 per cent. The growth of the leased lines services market, observed in 2008 and in 2009, is related with the increase of the revenues, received by TEO LT, AB for the provided wholesale leased lines. The said revenues of TEO LT, AB most likely increased due to the increase of demand of the national long-distance and international leased lines services, which are more expensive than local leased lines. In addition, since the 3rd quarter of 2008 TEO LT, AB commenced providing leased lines of the speed rate, higher than 2 Mbps.
26.1 25.4 26.7 37.6 42.1 33.0 27.1
2005 2006 2007 2008 2009 2010 2011 Figure 110. The revenues of the leased lines services market in 2005–2011, LTL million Source: RRT
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The largest amount of revenues (64.2 per cent) from the leased lines services provision activities in 2011 was received by TEO LT, AB, whose market share reduced by 3.5 percentage points during the year. The share of Bitė Lietuva UAB on the leased lines market, measured by revenues, grew by 1.1 percentage point and amounted to 7.4 per cent. The share of revenues of Data Logistics Center UABxvii grew by 4.8 percentage points (from 12.9 up to 17.7 per cent) and the share of Lietuvos Geležinkeliai AB reduced by 1 percentage point (from 3.5 down to 2.5 per cent) (see Figure 111).
2011 64.2 % 17.7 % 7.4 % 2.5% 8.2%
2010 67.7 % 12.9 % 6.3 % 3.5% 9.6%
2009 66.3 % 15.4 % 6.7 % 4.6% 7.0%
2008 61.4 % 18.6 % 4.1 % 6.9% 9.0%
2007 55.3 % 23.7 % 7.8% 13.3%
2006 51.7 % 29.0 % 7.0% 12.3%
2005 53.7 % 24.3 % 6.9% 15.1%
TEO LT, AB Data Logistics Center UAB* Bitė Lietuva UAB Lietuvos geležinkeliai AB Others * Before the 4th quarter of 2010, the services were provided by Lietuvos Energija AB (Data Logistics Center UAB is a subsidiary of Lietuvos Energija AB)
Figure 111. The structure of leased lines services market in terms of the revenues in 2005–2011, per cent Source: RRT
At the end of 2011 1 783 leased lines were provided, i. e. 21.8 per cent less than at the end of 2010. The operators provided leased lines mostly by using their own network resources and only 4.5 per cent of the lines, according to the data of the 3rd quarter of 2011xviii, were secondary, i. e. resold leased lines, belonging to another undertaking. Local leased lines amounted to 68.6 per cent of all the leased lines, 22.2 per cent were international, 9.2 per cent – national long-distance lines. The largest share of the market (74.9 per cent) in terms of the number of leased lines was occupied by TEO LT, AB. The reduction of the demand for leased lines services in 2011 resulted from the reduction of the number of local leased lines by 26.2 per cent. 86.7 per cent of them were the local leased lines of TEO LT, AB. The number of international leased lines, provided to other undertakings grew by 37 per cent in 2011, i. e. from 308 to 422. The growth resulted from the increase of the number of analogue leased lines of TEO LT, AB (see Figure 112). Although the international leased lines in the overall market structure amounted to 22.2 per cent, their growth, which amounted to 37 per cent, had no significant influence on the overall change of the number of leased lines, since the number of local leased lines, which amounted to 68.8 per cent of all the provided leased lines, reduced by more than one fourth.
xvii Before the 4th quarter of 2010, the services were provided by Lietuvos Energija AB (Data Logistics Center UAB is a subsidiary of Lietuvos Energija AB). xviii RRT collected the data on the secondary leased lines till the 3rd quarter of 2011.
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4 113 3 901 3 831 4500 3 532 600 484 2 738 450 3000 422 273 308 184 202 281 1 773 1 308 300 1500 219 235 198 176 150 72 116 163 0 0 2005 2006 2007 2008 2009 2010 QIII 2011 Local lines National long-distance lines International lines Figure 112. The number of local, national long-distance and international leased lines in 2005–2010 and in the 3rd quarter of 2011 Source: RRT
At the end of 2011 34.3 per cent of the number of provided leased lines were wholesale leased lines and the share of retail leased lines amounted to 65.7 per cent. At the end of 2010 the wholesale and retail lines were distributed in a more balanced proportion: wholesale leased lines amounted to 43.4 per cent of the total number of provided leased lines and the retail lines amounted to 56.6 per cent. The revenues, received during 2011 from retail and wholesale leased lines provision activities correspondingly amounted to 57.1 per cent and 42.9 per cent. The shares of the revenues, received from provision of retail and wholesale leased lines in 2010 correspondingly amounted to 53.6 per cent and 46.4 per cent. Although wholesale leased lines are cheaper than retail leased lines, the amount of revenues, received from the larger number of retail leased lines (65.7 per cent) was relatively lower (57.1 per cent), which could be explained by the fact that wholesale and retail leased lines were different by their features (digital vs. analogue) and the service provision territory (i. e. local, national long-distance, and international). At the end of 2011 the rapidly growing share of digital leased lines in the structure of the leased lines market reached 54.9 per cent of the number of all the leased lines, provided to other undertakings (see Figure 113), i. e. 9.7 percentage points more than at the end of 2010.
19.9 % 24.0 % 28.3 % 22.7 % 25.0 % 28.9 % 33.3 % 45.2 % 54.9 %
79.6 % 76.0 % 71.7 % 77.3 % 75.0 % 71.1 % 66.7 % 54.8 % 45.1 %
2003 2004 2005 2006 2007 2008 2009 2010 2011 Analogue leased lines Digital leased lines
Figure 113. The shares of digital and analogue leased lines on the leased lines market in 2003–2011, per cent Source: RRT
When analyzing the digital leased lines market in terms of speed rate, one can see that from 2007 till 2009 the demand for leased lines of the speed rate higher than 2 Mbps grew by 83.7 per cent (see Figure 114). The growth of the demand for the services could be related with the demand for a higher data transmission speed. However insignificant reduction of the demand for the leased lines of the speed rate, higher than 2 Mbps (by 2.9 per cent) was observed during the later years. The undertakings, which used to purchase the leased lines services, most likely chose other alternatives, such as high speed broadband communication services.
86 Lithuanian Communications Sector 2011
11 42 85 60 104 162 191 173 168
2003 2004 2005 m. 2006 2007 2008 2009 2010 2011
Figure 114. The number of leased lines of the speed rate higher than 2 Mbps in 2003–2011 Source: RRT
Summary
Compared to 2010, in 2011 the revenues of the leased lines services provision market reduced by 17.9 per cent and amounted to LTL 27.1 million. At the end of 2011 the total number of provided wholesale and retail leased lines was 1 783 and, compared to 2010, reduced by 21.8 per cent. In the 3rd quarter of 2011 local leased lines amounted to 68.6 per cent of all the leased lines, the international lines amounted to 22.2 per cent and national long-distance – to 9.2 per cent. The number of local leased lines reduced most significantly during the year (by 26.2 per cent). During 2011 the number of international leased lines, provided to other undertakings, grew by 37 per cent, i. e. from 308 to 422. At the end of 2011 34.3 per cent of the provided leased lines were wholesale leased lines, 65.7 per cent were retail lines. The demand for leased lines of the speed rate, higher than 2 Mbps, which has been growing since 2007, is related with the demand for a higher data transmission speed rate. TEO LT, AB remained the largest provider of leased lines services: the market share, occupied by the said undertaking in terms of revenues, amounted to 64.2 per cent, in terms of the number of leased lines – to 74.9 per cent.
87 Lithuanian Communications Sector 2011
II. Postal and Courier Services Market
Postal services, which are considered services of universal economic importance, are one of the means of communication and exchange of information, used throughout the world. At the end of the first decade of the new millennium the providers of postal services faced strong competition from electronic communications services. After business and private users commenced active use of alternative services, i. e. sending letters by electronic mail and paying charges over the Internet, the volume of provided postal services has been naturally reducing. In order to increase the competitiveness of the market, on 1 January, 2013, together with ten other EU Member States, Lithuania chose to completely liberalize its postal services market. During the later years the liberalized postal parcels market characterized with growth. In terms of the volume of sent and received postal parcels, the market grew by 23.7 per cent in 2010 and by 16.5 per cent in 2011. The growth of volumes of postal parcels resulted not only from the revitalized export but also from the growth of both national and international electronic trade, which allows for making the assumption that the significance of the segment will grow on the postal and courier services market in the future. The service providers, taking into consideration the users’ needs to receive services quickly and conveniently, increased the flexibility of provision of services. The postal items self-service terminals, which were commenced to be implemented at the end of 2011, provided the service users the possibility to send and collect postal items at any time of the day at the locations, convenient to the user, i. e. at large shopping centers, petrol stations and post offices.
General market overview
In order to fully shape the internal EU postal services market, on 20 February, 2008 the European Parliament and the Council adopted the new Directive 2008/6/EC (hereinafter referred to as the third Postal Directive). According to the said directive the postal market is liberalized since 2011. Eleven EU Member States, including Lithuania, were granted an exemption to postpone the opening of the postal market until 31 December, 2012, in order to be able to reserve the services for the provider/providers of universal postal servicesxix. Other countries, granted the right to use the said exemption, are the Czech Republic, Greece, Cyprus, Latvia, Luxembourg, Hungary, Malta, Poland, Romania and Slovakia (see Figure 115). Upon liberalization of the market the service providers will no longer be divided into providers of postal and courier services all will be postal services providers. In order to protect the consumers’ interests and ensure efficient competition, the postal services provider, controlling the public postal networkxx, will be
xix Reserved postal services are the postal services, the provision of which is restricted by observing the set weight and price limits, in order to be able to ensure provision of universal postal services. xx Public postal network is a postal infrastructure, used by the provider of universal postal services for the provision of postal services, i. e. clearance of postal items, attributed to universal postal services, from the postal outlets, located on the entire territory; handling and conveyance of such postal items from the points of clearance from the postal outlets to the points of sorting; delivery of postal items to the addressees, specified on the postal items.
88 Lithuanian Communications Sector 2011
obliged to enter into agreements with other providers of such services as regards the use of the postal network.27
Fully liberalized markets Full market opening on 1 January, 2011 Full market opening on 1 January, 2013 1. Finland 7. Austria 18. Cyprus 2. Sweden 8. Belgium 19. Czech Republic 3. UK 9. Bulgaria 20. Luxembourg 4. Estonia 10. Denmark 21. Greece 5. Germany 11. France 22. Hungary 6. The Netherlands 12. Ireland 23. Latvia 13. Italy 24. Lithuania 14. Malta 25. Poland 15. Portugal 26. Romania 16. Slovenia 27. Slovakia 17. Spain
Figure 115. Liberalization of postal markets in the European Union Source: Austrian Post28
At the end of 2011 the total number of providers of postal and courier services in Lithuania reached 74, including 13 undertakings, who had the right to provide both postal and courier services and 61 undertakings – only courier services. Compared to 2010, in 2011 the number of market participants increased by 3 undertakings (see Figure 116).
11 74 11 78 14 81 15 79 15 84 12 71 13 74 2005 2006 2007 2008 2009 2010 2011 Providers of postal services Providers of courier services
Figure 116. The dynamics of the number of providers of postal and courier services in Lithuania in 2005–2011 Source: RRT
89 Lithuanian Communications Sector 2011
In 2011 the trend of growth of revenues remained on the postal and courier services market – the total revenues of the sector increased by 14 per cent. Compared to 2010, in 2011 the rate of growth of postal and courier services revenues grew by 8.5 percentage point (during 2010 the total revenues of the sector grew by 7.1 percentage points). Lithuania’s GDP grew by 5.9 per cent during the same period and the postal and courier services amounted to 0.25 per cent of the total of the GDP (see Figure 117).
32.5 % 25.5 % 17.5 % 14.4 % 11.0 % 12.2 % 5.0 % 5.5 %
10.2 % 9.8 % 7.4 % 7.8 % 7.8 % 5.9 % 2.9 % -12.6 % 1.3 %
-14.7 % 2003 2004 2005 2006 2007 2008 2009 2010 m 2011 The change of the GDP The change of the postal and courier services market
Figure 117. Comparison of annual changes of revenues of the postal and courier services market and the DGP in 2003–2011, per cent Source: RRT, Statistics Lithuania
In terms of revenues, in 2011 the total postal and courier services market reached LTL 272.1 million (see Figure 118). When analyzing the dynamics of the revenues of the postal and courier services market, one can see that before 2008 the postal and courier services market retained a stable growth trend, in 2009 experienced a 12.6 per cent drop of revenues however in 2010 the sector’s revenues increased again (by 5.5 per cent) and in 2011 the market grew already by 14 per cent and the result surpassed the level of revenues, received on the postal and courier services market before the economic recession.
101.2 127.0 133.4 148.1 196.2 220.1 258.6 226.1 238.6 272.1
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Figure 118. The dynamics of revenues of the postal and courier services market in 2002–2011, LTL million Source: RRT
In terms of revenues, the structure of the postal and courier services market, during the last seven years, changed insignificantly: in 2011 a greater share, i. e. 58.8 per cent of the revenues of the postal and courier services market were the revenues from courier services, 41.2 per cent – from postal services (see Figure 119). Compared to 2010, in 2011 the growth of revenues was observed both on the postal and courier services markets: the postal market grew by 8.9 per cent and amounted to LTL 112.2 million and the courier services market – by 18.6 per cent and reached LTL 159.9 million.
90 Lithuanian Communications Sector 2011
47.1 % 46.7 % 41.0 % 38.1 % 43.2 % 43.2 % 41.2 %
52.9 % 53.3 % 59.0 % 62.0 % 56.8 % 56.8 % 58.8 %
2005 2006 2007 2008 2009 2010 2011 Revenues from postal services Revenues from courier services
Figure 119. The structure of postal and courier services market in terms of revenues in 2005–2011, per cent Source: RRT
Postal services
In 2011 the revenues of the postal services market grew the most during the last five years, i. e. almost by 9 per cent and amounted to LTL 112.2 million. The average growth of revenues during the time period of 2005–2011 amounted to 8.72 per cent and the average annual revenues reached LTL 94.7 million (see Figure 120).
125 31.1 % 40 % 110 30 % 95 20 % 9.0 % 8.9 % 5.5 % 80 10 % -1.5 % -0.7 % 65 0 % 69.8 91.6 90.2 98.4 97.7 103.0 112.2 50 -10 % 2005 2006 2007 2008 2009 2010 2011 Market revenues The change Figure 120. The revenues from the postal services market, LTL million and the change of revenues, per cent, in 2005–2011 Source: RRT
The volumes of items of correspondence also reduced on 2011 however the reduction was not as significant as during the time period of 2008–2010: compared to 2010, in 2011 the number of items of correspondence reduced almost by one per cent and amounted to 59.5 million (see Figure 121).
80 20.7 % 25 % 70 20 % 69.7 60 67.7 65.4 15 % 50 59.9 59.5 56.0 10 % 40 52.8 3.0 % 5 % 30 6.1 % -0.7 % 20 -6.1 % 0 % -8.4 % 10 -5 % 0 -10 % 2005 2006 2007 2008 2009 2010 2011 Items of correspondence The change
Figure 121. The number of items of correspondence (including direct mail), million and the change, per cent in 2005–2011 Source: RRT
91 Lithuanian Communications Sector 2011
After Lietuvos Paštas AB attributed its service “Goods by post” and consignation postal items to postal parcels in 2009, the amount of postal parcels, sent and received by all the postal service providers, grew by 3.8 times. However, compared to 2010, in 2011 the volume of the services reduced by 10.7 per cent and amounted to 547.5 thousand postal parcels (see Figure 122).
700 628.0 613.1 325 % 547.5 600 281.5 % 275 % 500 225 % 400 175 % 300 125 % 173.1 200 135.0 141.6 164.6 75 %
100 16.3 % -10.7 % 25 % 4.9 % -2.4 % 0 -22.0 % -25 % 2005 2006 2007 2008 2009 2010 2011 Postal parcels The change
Figure 122. The amount of sent and received postal parcels, thousand and the change, per cent, in 2005–2011 Source: RRT
Universal postal services. All the EU Member States, except Germany, ensure the provision of universal postal services, which include clearance, sorting, conveyance and delivery of items of correspondence weighing up to 2 kg, clearance, sorting, conveyance and delivery of postal parcels, weighing up to 10 kg, clearance, sorting, conveyance and delivery of registeredxxi and evaluatedxxii postal items and delivery of postal parcels, weighing up to 20 kg, received from the EU Member States. For this purpose the states appoint the provider of universal services, obliged to provide universal services. Lietuvos Paštas AB provides the universal postal services in Lithuania. The said undertaking must ensure that the universal postal services are provided in the uninterrupted manner to all the consumers of services on the same conditions on each business days and at least five days a week.29 In order to ensure the uninterrupted provision of universal postal services till 1 January, 2013, when the Lithuanian postal market is completely liberalized, the area of clearance, sorting, conveyance and delivery services of domestic items of correspondence, direct mail and received international items of correspondence, in observance of the weight and price limits is reserved for Lietuvos Paštas AB. Starting from 1 January, 2006 the 50 grams weight limit is applied to reserved correspondence items. Other providers of postal services, when providing the services, must apply a rate, no less than 2.5 times higher than the tariff for items of correspondence of the first weight level, established to the provider of the universal postal services. Compared to 2010, in 2011 the revenues from provision of universal postal services grew by 5.5 per cent, i. e. from LTL 85.8 million up to LTL 90.5 million. The revenues, received from provision of reserved services, reduced by 3.7 per cent, i. e. from LTL 52.9 million in 2010 down to LTL 50.9 million in 2011 (see Figure 123).
xxi Registered postal item is a postal item, to which a guarantee of a fixed size is provided in case of loss, theft or damage. At the request of the sender, the evidence that the postal item was delivered to the recipient, must be provided. xxii Evaluated postal item is a postal item, in case of damage or loss of which, the sender is indemnified for its value, which is specified by the sender.
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100 48.5 % 50%
90.5 75 28.5 % 86.7 85.9 85.8 30% 78.8 82.1 68.8 14.5 % 4.2 % 5.5 % 50 -0.8 % -0.2 % 5.5 % 10%
1.3 % -3.7 % 25 -4.6 % -10% -25.1 % 38.4 49.3 47.0 47.6 35.6 52.9 50.9 0 -30% 2005 2006 2007 2008 2009 2010 2011 Universal services revenues Reserved postal services revenues Growth of universal services revenues Growth of reserved postal services revenues Figure 123. The universal services and reserved postal services revenues, LTL million and the growth, per cent, in 2005–2011 Source: RRT
In 2011 the revenues from items of correspondence, weighing 2 kg or less amounted to the largest share in the structure of the revenues from universal postal services, i. e. to 48.6 per cent (see Figure 124). However the share of the revenues in the total structure of the revenues of the universal postal services market reduced the least during 2011, i. e. by 2.5 percentage points and the reduction of the market share during the time period of 2005–2011 amounted to 22.5 percentage points. Another significant share in the overall structure of the revenues of the universal postal services market, i. e. 42.5 per cent was seized by registered postal items revenues. Their share grew most significantly in 2011, i. e. by 3 percentage points (the growth during the time period of 2005–2011 reached 22.3 percentage points). In 2011 the share of revenues from postal parcels, weighing 10 kg or less, amounted to 8.5 per cent, the postal parcels, received from the EU, weighing more than 10 kg and 20 kg or less and evaluated postal items remained insignificant in the total structure of revenues of universal postal services, i. e. 0.1 per cent and 0.3 per cent correspondingly. Compared to 2010, in 2011 the revenues from evaluated postal items grew the most, i. e. by 16.8 per cent (up to LTL 322.8 thousand) and from registered postal items – by 13.4 per cent (up to LTL 38.4 million). The revenues, received from sending of postal parcels, weighing 10 kg or less and items of correspondence, weighing 2 kg or less, remained similar as in 2010 – in 2011 they correspondingly amounted to LTL 7.7 million and LTL 44 million. Compared to 2010, in 2011 the revenues from postal parcels, received from the EU, weighing more than 10 kg and 20 kg or less, reduced the most, i. e. by 44.5 per cent (from LTL 129.8 thousand down to LTL 72 thousand).
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2011 48.6 % 8.5 % 0.1 % 42.5 % 0.3 % 2010 51.1 % 8.9 % 0.2 % 39.5 % 0.3 % 2009 53.4 % 8.7 % 1.4 % 36.1 % 0.4 % 2008 62.9 % 3.4 % 1.0 % 32.4 % 0.3 % 2007 71.2 % 2.6 % 1.1 % 24.8 % 0.3 % 2006 75.7 % 3.9 % 2.0 % 17.7 % 0.7 % 2005 71.1 % 5.2 % 2.2 % 20.2 % 1.3 %
Items of correspondence, weighing 2 kg or less Postal parcels, weighing 10 kg or less Postal parcels from the EU, weighing 20 kg or less Registered postal items Evaluated postal items Figure 124. The structure of universal postal services in terms of the revenues from the sent and received postal items in 2005–2011, per cent Source: RRT
The volume of the universal postal services, provided in 2011, amounted to 48.7 million postal items and, compared to 2010 (50.1 million), reduced by 2.8 per cent. Items of correspondence, weighing 2 kg or less, occupied the largest share in the structure of universal postal services in terms of the amount of sent and received postal items. During 2011 the share of the postal items reduced by 2.3 percentage points and amounted to 81.6 per cent. During the same period the share of registered postal items, in terms of sent and received postal items, grew by 2.2 percentage points and amounted to 17.3 per cent in the total structure of universal postal services. The shares of evaluated postal items, postal parcels, weighing 10 kg or more and 20 kg or less and postal parcels, weighing 10 kg or less in the total structure of universal postal services changed insignificantly (see Figure 125). Evaluating the quantity of postal parcels, the volume of registered postal items grew the most during 2011 – totally 8 409 355 postal items were sent and received, i. e. 10.9 per cent more than in 2010. The volume of evaluated postal items reduced the most during 2011, i. e. by 11 per cent and their number reached 7 340. During the same period the amount of postal items, weighing 10 kg or less reduced by 10.6 per cent – 529 121 postal items of such type were sent during 2011.
0.015% 0.007% 2011 81.6 % 17.3 % 1.1 % 0.016% 0.005% 2010 83.9 % 15.1 % 1.1 % 0.017% 0.006% 2009 84.9 % 14.5 % 0.6 % 0.015% 0.007% 2008 85.7 % 14.1 % 0.2 % 0.016% 0.006% 2007 87.3 % 12.5 % 0.2 % 0.023% 0.009% 2006 88.1 % 11.7 % 0.2 %
Items of correspondence, weighing 2 kg or less Evaluated postal items Registered postal items Postal parcels, weighing more than 10 kg and 20 kg or less Postal parcels, weighing 10 kg or less
Figure 125. The structure of universal postal services in terms of sent and received postal items in 2006–2011, per cent Source: RRT
When analyzing the quality of the services, provided by the universal services provider, one should take into consideration both the indicators of delivery of correspondence on time and the characteristics of the postal services provision network (the number of postal outlets and the number of mail boxes). All of the aforementioned indicators form the totality of the quality of universal postal services.
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All the EU Member States have introduced the regulation of quality of postal services, especially universal postal services. The highest requirements are applied to the D+1 quality standardxxiii, which is applicable in all the states, except Spain. According to the data of the study, performed by International Post Corporation30, in 2011 the quality of postal services in Europe exceeded the targets, set for the EU for more than ten years in a row: 85 per cent of letters, sent inside the EU, were delivered within three business days and 97 per cent – within five business days. In 2011 in 35 European statesxxiv 93 per cent of priority items of correspondence were delivered within three business days, 98.1 per cent – within five business days and the average time of delivery was 2.2 days. According to the quality requirements to the universal postal services, established in Lithuania31 at least 85 per cent of priority items of correspondence must be delivered on the next business day (D+1) and 97 per cent of priority items of correspondence must be delivered on the third business day, following the dispatch (D+3). In 2011 RRT, upon performing an independent annual audit of the quality of the universal postal services, provided by Lietuvos Paštas AB, established that 75.6 per cent of all the priority items of correspondence were delivered by Lietuvos Paštas AB on the next business day (74.3 per cent in 2010), i. e. 9.4 percentage points less than the established quality indicator (see Figure 126). The indicator of delivering a letter on the third business day, following the dispatch reached 99.2 per cent and, as in the previous years, exceeded the established quality indicator (by 2.2 percentage points) (see Figure 126).
100% 10% 2.2 % 1.8 % 0.6 % 1.9 % 2.1 % 1.9 % 80% -1.3 % 0%
60% -9.4 % -10.4 % -10.7 % -9.4 % -12.2 % -10%
40% -17.2 %
-20%
20%
57.9 % 57.9
99.2 % 99.2 72.8 % 72.8 % 98.8 % 67.8 % 97.6 % 75.6 % 98.9 % 74.6 % 99.1 % 74.3 % 98.9 % 75.6 0% -27.2 % % 95.7 -30% 2005 2006 2007 2008 2009 2010 2011 The percentage of the delivered letters (D+1) The percentage of the delivered letters (D+3) Deviation from the standard (D+1) Deviation from the standard (D+3) Figure 126. The percentage of letters, delivered on the business day, following the dispatch (D+1) and on the third business day, following the dispatch (D+3) and the deviation from the standard in 2005–2011, per cent Source: RRT
In order to optimize its activity results, in 2005–2011 the provider of universal postal services Lietuvos Paštas AB reduced the number of stationary post outlets, which operated with a loss. 239 stationary post outlets were totally closed during the said period and in 2011 their number reached 701, i. e. 3.3 per cent less than in 2010 however at the same time the company launched mobile post outlets, i. e. modern vehicles, specially equipped for delivery of items of correspondence, postal parcels and provision of other services, which come to dwelling settlements at the set time. Six mobile post outlets were launched in 2005, in 2006 their number remained unchanged and in 2007 four more were launched and there were ten mobile
xxiii The quality standard is expressed by the formula D+n, where “D“ is the date of dispatch of the postal item and “n” is the number of business days from the moment of dispatch of the postal item till the moment of delivery of the item to the recipient. xxiv The study was performed in 27 EU Member States, as well as in Iceland, Croatia, FYR Macedonia, Norway, Switzerland, Turkey, a part of Bosnia and Herzegovina and in Serbia.
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post outlets, serving 47 points of access to universal postal services. In 2008 there were sixteen, and they were used to serve 80 points of access to universal postal services. In 2009 28 mobile post outlets served 134 points of access to universal postal services, in 2010 the same 28 mobile post outlets served 135 points of access to universal postal services and in 2011 the same 28 mobile post outlets served 138 points of access to universal postal services (see Figure 127).
913 874 746 737 715 940 934 901 862 736 725 701
134 135 138 47 80 6 6 10 16 28 28 28
2005 2006 2007 2008 2009 2010 2011 Number of stationary post outlets Number of mobile post outlets Number of stationary points of access to universal postal services Number of mobile points of access to universal postal services Figure 127. The number of stationary and mobile post outlets of Lietuvos Paštas AB and points of access to universal postal services in 2005–2011 Source: RRT
During the last seven years the number of mail boxes each year reduced by 9.4 per cent on the average and the total reduction during the time period of 2005–2011 amounted to 45.6 per cent (see Figure 128). The largest reduction occurred in rural areas, i. e. 2.3 times, by 12.8 per cent in 2011 alone. Compared to 2010, in 2011 the number of mail boxes reduced by 2.1 per cent and amounted to 2 254.
-3.6 % -2.1 % 5000 -5.6 % 0 % 4000 -5 % -12.2 % 3000 -13.2 % -10 % 2000 -19.9 % -15 % 1000 -20 % 4 141 3 909 3 434 2 981 2 388 2 302 2 254 0 -25 % 2005 2006 2007 2008 2009 2010 2011 The number of mail boxes The change Figure 128. The number of mail boxes and the change, per cent, in 2005–2011 Source: RRT
Courier services
During 2011 the revenues on the courier services market grew by 18.6 per cent and amounted to LTL 159.9 million. The average increase of revenues during the time period of 2005–2011 amounted to 14.2 per cent each year and the average one year’s revenues reached LTL 128 million (see Figure 129).
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180 33.6 % 40 % 160 24.2 % 23.4 % 18.6 % 30 % 140 20 % 120 5.0 % 100 10 % 80 0 % 60 -19.9 % -10 % 40 -20 % 20 78.3 104.6 129.9 160.2 128.4 134.8 159.9 0 -30 % 2005 2006 2007 2008 2009 2010 2011 The revenues The change
Figure 129. The revenues from the courier services market, LTL million and the growth of the market, per cent, in 2005–2011 Source: RRT The total amount of all the sent and received items of correspondence by all the providers of courier services (including direct mail), which reduced by 22.6 per cent in 2010, during 2011 grew by 30.9 percentage points and amounted to 15.5 million (see Figure 130). Although in 2011 the rate of growth of the number of postal items was to a certain extent slower than in 2010, it grew more than 20 per cent and amounted to 5.4 million postal items.
20 50% 18 28.3 % 40% 16 18.4 30.2 % 24.1 % 17.3 30% 14 25.3 % 15.5 20.2 % 12 13.8 14.3 20% 10 11.9 16.6 % 6.5 % 8.3 % 10% 11.6 9.7 % 8 2.6 % 0% 6 -5.6 % -10% 4 -22.6 % 2 2.1 2.7 3.4 3.7 3.5 4.5 5.4 -20% 0 -30% 2005 2006 2007 2008 2009 2010 2011 Items of correspondence Postal parcels The change as regards items of correspondence The change as regards postal parcels Figure 130. The amounts of items of correspondence and postal parcels, million and the change, per cent, in 2009–2011 Source: RRT
Summary
According to the EU requirements, the postal services market is going to be completely liberalized in Lithuania starting from 1 January, 2013. In 2011 the total revenues of the postal and courier services sector grew by 14 per cent and surpassed the level of revenues, received on the market before 2008 – in 2011 they reached LTL 272.1 million. During the same period Lithuania’s GDP grew by 5.9 per cent and the share of postal and courier services revenues amounted to 0.25 per cent of the total GDP. During 2011 the revenues of the postal services market grew by almost 9 per cent and amounted to LTL 112.2 million, i. e. 41.2 per cent of the total revenues of the postal and courier services sector. Compared to 2010, the amounts of items of correspondence and sent and received postal parcels correspondingly reduced by 0.7 per cent (to 59.5 million) and by 10.7 per cent (to 547.5 million).
97 Lithuanian Communications Sector 2011
Compared to 2010, the revenues, received from provision of universal postal services, grew by 5.5 per cent in 2011 and amounted to LTL 90.5 million. The revenues from items of correspondence amounted to 48.6 per cent and the revenues from registered postal items – to 42.5 per cent in the total structure of the revenues from universal postal services. In 2011 RRT, upon performing the annual independent audit of quality of universal postal services, established that Lietuvos Paštas AB delivered 75.6 per cent of priority items of correspondence, i. e. 9.4 percentage points less than the established quality indicator (85 per cent) on the business day following the dispatch (D+1). The letter delivery quality indicator as regards the delivery on the third business day following the dispatch (D+3) reached 99.2 per cent and surpassed the established quality indicator (97 per cent). The revenues of the courier services market grew by 18.6 per cent during 2011 and amounted to LTL 159.9 million, i. e. 58.8 per cent of the total revenues of the postal and courier services sector. Compared to 2010, in 2011 the amounts of items of correspondence and the received postal parcels correspondingly grew by 8.3 per cent (15.5 million) and 20.2 per cent (5.4 million).
27 http://www.eurep.mfa.lt/index.php?1917332372 28 http://www.post.at/gb2010/en/the_european-post_market.htm 29 The Postal Law of the Republic of Lithuania (Official Gazette Valstybės Žinios, 2004, No. 60-2125) 30http://www.ipc.be/en/Services/Technical%20_Platforms/UNEX/~/media/Documents/PUBLIC/UNEX/Full%20Year%20Results/2010/UN EX_Full%20Year_2011.ashx 31 Order No. 3-495 of the Minister of Transport and Communications of the Republic of Lithuania of 12 October, 2004 “On the approval of the description of the requirements for the quality of universal postal services“ (Official Gazette Valstybės Žinios, 2004, No. 157-5742; 2006, No. 44-1612, No. 84-3318; 2007, No. 91-3670)
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