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Lithuanian Communications Sector 2010 - RRT

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                                                       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
1. Brief Overview of Lithuanian Communications Sector.......................................... 7
2. Electronic Communications Market....................................................................... 12
   2.1. Preconditions for the Development of the Electronic Communications Sector ... 12
      2.1.1. General Trends ............................................................................................ 12
      2.1.2. Social and Economic Factors ....................................................................... 19
   2.2. Retail Electronic Communications Services........................................................ 33
      2.2.1. Voice Services.............................................................................................. 33
      2.2.2. SMS and MMS ............................................................................................. 45
      2.2.3. Internet Access and Other Data Transmission Services .............................. 49
      2.2.4. Television Services ...................................................................................... 68
   2.3. Wholesale Electronic Communications Services ................................................ 78
      2.3.1. Wholesale Access ........................................................................................ 78
      2.3.2. Networks Interconnection Services .............................................................. 84
      2.3.3. Leased Lines ................................................................................................ 90
      2.3.4. Television and Radio Programs Transmission Services .............................. 93
3. Postal and Courier Services Market ...................................................................... 99




                                                                                                                                  2
 Foreword by the Minister of Transport and Communications of the
                                    Republic of Lithuania



                                                       Information and communication technologies have
                                                                                     st
                                               become an integral part of the 21          century. Without any
                                               doubt, they have changed people’s life, business and state
                                               governance. At present, almost everyone in Lithuania has a
                                               mobile phone and almost half of the nation uses computers
                                               and the Internet. The absolute majority of Lithuania’s
                                               businesses can not help using information technologies in
                                               their everyday activities. This encourages the development
                                               of the country and its residents and allows for the
                                               advancement of new ways of communication.
                                                       About 4 per cent of Lithuania’s GDP is created in
                                               the communications sector. However, its contribution to the
                                               overall development of the economy is much more
                                               significant. The dynamism and innovation, characteristic of
the communications sector, without any doubt encourage the growth of the entire economy of Lithuania.
Modern communication technologies are used in almost all areas of business, which influences all the
economic and social areas of the state.
        Lithuania is among the leaders
        Successful development of the information society requires a secure electronic space, based on
the confidence and responsibility on behalf of the communicating persons. If modern technologies were
not reliable, provision of certain Internet based services, such as electronic banking, would become
impossible, therefore security remains of crucial importance.
        We can only be happy about the fact that in 2010 Lithuania retained leading positions in Europe
in terms of the use of fibre communication beating such countries as Sweden and Norway in the area.
        Today we can be proud that Lithuania has the world’s best mobile communications network
infrastructure and its mobile communication penetration is among the highest in the world. With every
year Lithuania further solidifies its positions among the top countries, boasting the fastest data
communication speed rate (Lithuania is second in the world and at the top in the European Union) and
highest quality of broadband Internet (fourth in the world).
        According to the data of the Association “Langas        Ateit ” (“Window to the Future”), Lithuanians
enjoy the largest network of public Internet access points in Europe. Eighty-eight per cent of the country’s
territory has already been covered by 3.5G mobile Internet network. Every second resident of Lithuania
can be reached by two mobile phone numbers. These facts show that more and more attention is
devoted to the information society, and the development of a favourable environment encourages the
implementation and use of cutting edge technologies in all areas of life.
        Steps towards the rural area
        The on-going project “Rural Area Information Technology Broadband Network (RAIN)” was an
influential tool to expand the coverage of broadband in the country. In 2009 the second phase of the
project was launched providing rural residents and institutions located far from centres of subdistricts with
a possibility to use Internet services.
        In 2010, 2,200 km of trunk network fibre lines were laid and data communication equipment was
installed. In 2013, upon implementing the project, the 4,400 km long fibre network will connect 770
settlements, and 98 per cent of the residents of rural areas in Lithuania will enjoy broadband services.
Nearly 660,000 residents, almost 2,000 businesses and 9,000 public institutions will be provided with the
possibility to use the modern Internet.
        These works are of the utmost importance as Lithuania, like other European Union Member
States, aims to significantly increase the number of the Internet users and make sure that 75 per cent of
the country’s residents use the Internet on the daily basis by 2015. The data of Statistics of Lithuania
show that a little more than 60 per cent of Lithuania’s residents aged 16–74 are everyday users of the
Internet.
        The new era of television
        On 29 October, 2012 Lithuania is going to complete its transition to the digital terrestrial television
by switching off the analogue terrestrial television, which will start a new phase of development of
television in the country. Switching off the analogue terrestrial broadcasts will reduce broadcasters’ costs,
and channels with smaller TV network coverage of higher quality will be available in regions all over the
country. Digital television will offer more television channels and improve the quality of the image.
        To ensure smooth switchover to the digital terrestrial television, the Ministry of Transport and
Communications will launch a large-scale information campaign, whereas low income individuals, who
have old television sets, will be provided with a one-off compensation for purchasing digital television set-
top-boxes.
        To summarize, I would like to emphasize that innovative technologies introduced in the
communications sector and their further development which did not stop even during the economic
recession once again highlight the importance of the market to the development of the entire economy of
Lithuania. Therefore special attention should be paid to communication technologies, in order to
successfully implement the objectives of the European Digital Agenda and ensure the growth of
competitive economy and harmonious and creative society.




Minister of Transport and Communications
Eligijus Masiulis




                                                                                                             4
       Foreword by the Director of the Communications Regulatory
                         Authority of the Republic of Lithuania



        The development of the Lithuanian communications sector
in 2010 could be looked at from two standpoints. On one hand, it
felt the real consequences of the economic recession. Overall
revenues of the electronic communications sector which reduced
by 7.7 per cent in 2009, continued falling down in 2010 and
accounted for a reduction of 10.7. On the other hand, while
businesses are reducing their costs and people are saving on
anything they can, one cannot help but notice the signs of revival,
which are increasingly prominent. After a short break, one may
observe a renewed growth of investment into the electronic
communications infrastructure and the accelerating expansion of
broadband communications. Both the number of broadband
subscribers and broadband penetration was rising, by 10 per cent
and 13.7 per cent respectively, while revenues have slightly
reduced by a 1.5 per cent.
        Taking into consideration the decreased income of their users during the recession and to retain
the existing and attract the new users, market players were on the lookout for courageous and, most
likely, inevitable solutions. The main measure, adopted by the market players, was the reduction of
prices; the prices of mobile voice services dropped by almost 30 per cent, and the prices of fixed voice
services fell by 10 per cent. Such pricing policy and the regulation of wholesale service prices, performed
by RRT, resulted in the reduction of the revenues on the main segments of the electronic communications
sector, namely mobile communication and network interconnection, and, thus on the entire sector. This,
however, encouraged consumption. It can be assumed that the annual inflation in the country, which grew
by 2.5 per cent in 2010 and reached 3.8 per cent at the end of the year, did not affect the said segments.
        The influence of the new technologies is especially pronounced in the segment of TV services.
The mobility of terminal equipment and the exceptional quality of image, created by the digital signal, is
changing the concept of television. In the nearest future television services may replace motion pictures
shown at cinemas, concerts and gain the functions which have not been discovered yet. Revenues from
television services rocketed by 25 per cent in 2010 and are expected to grow until switch-off of analogue
terrestrial television on 29 October 2012.
        A 3.8 per cent growth of investment into the electronic communications infrastructure by the
market players also encourages optimism being a sign of a quick revival of the electronic communications
market. The year of 2010 proved that the operators targeted their utmost investment at next generation
fibre technologies. A continuous growth of broadband penetration and the share of revenues from Internet



                                                                                                         5
access services in the overall electronic communications sector obviously show that companies give their
priority to fibre technologies.
           It is hardly a mere coincidence that broadband-oriented development of the electronic
communications market coincides with one of the objectives in the European Digital Agenda, namely to
provide each and every European citizen with the possibility to use high speed (30 Mbps or 100 Mbps)
Internet services before 2020. To reach the said target, Lithuania, like the entire Europe, can already
evaluate the first results, which encourage optimism, since the rapidly implemented next generation fibre
technologies have proved to bring certain results. In 2010 for the first time the most popular Internet
speed rate amongst consumers in Lithuania exceeded 10 Mbps and since the middle of 2010 Internet
speed rate over 100 Mbps was increasingly used in Lithuania, which is undoubtedly a high performance
proved by international studies. The data of Netindex shows that at the end of 2010 Lithuania ranked third
in the world in terms of the Internet data download speed rate and second in terms of data upload speed
rate in households.
           Lithuania has solidified its positions among the top European countries in terms of fibre
penetration in households for a second year in a row and showed Europe and the rest of the world its
determination, which did not remain unnoticed internationally. Lithuania is highly rated in terms of both
speed rate and other parameters of broadband development, such as quality and readiness for tomorrow.
In the Report of the Global Study of Broadband Quality, performed by Oxford University for several years
in a row, Lithuania, in terms of its readiness to satisfy the consumers’ expectations to receive top quality
innovative services in the future, was ranked together with the world’s most advanced countries, such as
South Korea, Japan, and Sweden and was listed amongst the countries with the highest level of
readiness for tomorrow. In addition, Digital Economy Rankings Report, published by the Economist Group
in cooperation with the specialists of IBM Institute for Business Value, included Kaunas into the top five of
the world’s cities with the highest quality of broadband communication, together with three Japanese
cities (Yokohama, Nagoya and Soporo) and Seoul, the capital of South Korea.
           The breakthrough of development of the latest information technologies, which occurred despite
of the complicated economic situation in 2010, will create new competitive conditions for the business and
exceptional quality of services provided to consumers in the future. We hope that the development of fibre
networks, carried out by joint efforts of market players and the public sector, in line with the growth of
consumers’ electronic literacy and the demand for innovative services based on advanced technologies,
will allow us and other European countries to reach for the common goals and for the wellbeing of every
citizen of Lithuania. It is still quite difficult to imagine today how our near future will look like but it will
certainly be quite different.




Director
Tomas Barakauskas




                                                                                                               6
              1. Brief Overview of Lithuanian Communications Sector


          Electronic communications services are closely related to almost all spheres of life of both
enterprises and population. Therefore the decline of every economic sector, which was the largest in the
last decades, had a significant impact on the entire electronic communications sector. In 2010, despite
the positive trends, which were becoming more and more prominent, the electronic communications
market was reducing due to the recession of economy (the total revenues of the sector reduced by 10.7
per cent compared to 2009) (see Figure 1).



                         11.9%             7.1%             10.3%
       5.3%                                                                  5.1%

                         7.6%              7.5%             8.8%
       7.3%
                                                                             2.9%
                                                                                      -7.7%     1.3%
                                                                                               -10.7%

                                                                                     -14.7%


       2004              2005              2006             2007             2008     2009      2010

        Change of the GDP           Change of the electronic communications market

Figure 1. The change of Lithuania’s GDP and electronic communications market (compared to the
corresponding period of the previous year), 2004–2010, per cent
Source: Statistics Lithuania, RRT



          It is obvious that the growing unemployment and reduction of household revenues resulted in
changes in the structure of residents’ expenses and their consumption habits and the reducing trade
volumes resulted in changes in the structure of business expenses and the business consumption habits,
i. e. there emerged the trend of saving. The aforementioned changes forced the market players to
operate more efficiently, search for courageous and non-traditional solutions in order to use the available
resources in the most efficient manner possible, keep the existing and attract new consumers. Thus, the
electronic communications sector was influenced by business initiatives to actively apply new marketing
solutions. The main measure, chosen by market players in order to keep the consumers was the
reduction of service prices: the prices of mobile communications services reduced by almost one third,
the prices of fixed services – by one tenth. The same tendency is apparent in the broadband segment:
while total income of this segment decreased, penetration during this period grew, which means that
users purchased Internet service at a lower price. Such a pricing policy resulted in the reduction of
revenues in the main segments of the electronic communications sector (as well as the entire sector)
even while the number of consumers was increasing.
          The revenues from the activities of the relatively biggest electronic communications sectors, i. e.
mobile communications and fixed communications, reduced. Compared to 2009, in 2010 the revenues
from the provision of public mobile telecommunications networks and services reduced by 12.6 per cent.
However, the increased number of active mobile communications subscribers (the penetration grew by

                                                                                                           7
1.7 per cent and surpassed the penetration, which existed prior to the recession) shows that this
segment, which is among the biggest electronic communications segments, is recovering (see Figure 2).
A similar situation can be observed on the public fixed communications market: although the revenues for
the provided fixed communications services also reduced in 2010 (by 14.8 per cent), the number of public
fixed telecommunications lines per 100 residents did not reduce and even insignificantly increased (by 0.1
per cent), which shows that the service providers on the markets reviewed the pricing of retail services
and, taking the consumers’ possibilities into consideration, adapted service packages to the changed
consumers’ needs and reduced the service prices.




                                                                                          148.9 %      150.7 %
  1500                          139.4 %           146.2 %                 149.9 %                                    160
               127.9 %
                                                 1 389                   1 355
              1 174           1 236                                                                                  120
  1000                                                                                   1 126
                                                                                                       984
                                                                                                                     80
                      443.7           425.0              412.7                   399.7
   500                                                                                         355.0        302.6
                 23.5 %         23.4 %              23.7 %                23.4 %                       22.6 %        40
                                                                                          22.5 %

     0                                                                                                               0
              2005               2006                2007              2008                2009          2010
         Revenues from the provision of the public mobile communications network and services
         Revenues from the provision of the public fixed communications network and services
         Number of active mobile communications subscribers per 100 population
         Number of fixed communications lines per 100 population


Figure 2. The revenues from the provision of the public fixed and mobile communications networks and
services (LTL million) and fixed and mobile communications penetration in 2005–2010
Source: RRT



         Despite the reduction of the electronic communications sector, the Internet services segment in
the information and communication technologies (hereinafter referred to as the ICT) sector grew
continuously – in 2010 the retail Internet access market grew by 10.5 per cent, i. e. the number of
subscribers, using Internet access, grew by 83.5 thousand (see Figure 3). Revenues from retail Internet
access service amounted to LTL 368 million and, compared to 2009 (LTL 378.7), decreased by 2.8 per
cent. In the total electronic communications services market structure revenues from the provision of
Internet access was 15.8 per cent of all electronic communications services income (in 2009 this share
was 14.3 per cent. in 2008 – 12.3 per cent).




              417.5                   581.9                      709.8                   796.1               878.5

              2006                    2007                       2008                    2009                2010

Figure 3. The number of Internet access service subscribers in 2006–2010
Source: RRT



         Till the end of 2010 the penetration of the broadband Internet access reached 27.1 per cent of the
residents (see Figure 4), which amounted to approximately 63 per cent of penetration among households.
Almost all the Internet access services were provided over broadband communications networks (99.8
                                                                                                                           8
per cent). The growing penetration and growing Internet access revenues share within the total electronic
communications market structure show that intensive competition exists in the retail broadband market,
that this is priority of the companies, which even in the face of recession gave great attention in order to
retain and attract more customers.



 500                                                                                          23.8 %            27.1 %      30
                                                                       21.1 %
 400                                                17.1 %
                                                                                                                            20
 300                           12.0 %
 200          6.0 %                                                                                                         10
 100
              213.3             264.9               313.0               384.1                  412.5            406.8
   0                                                                                                                        0
              2005              2006                2007                2008                   2009             2010

        Revenues from the provision of Internet access services         Broadband penetration
Figure 4. The revenues from the provision of Internet access services (LTL million) and broadband
penetration, per cent in 2005–2010
Source: RRT



         After the reduction of investing into the electronic communications sector, which lasted for two
years, a certain recovery was observed in 2010: the investments, made by market operators, grew by 3.8
per cent (see Figure 5).


 3500     671.0                                                                                                            700

                      387.8                                                      461.0                                     550
 2500                                                               350.2                     375.1
                                310.0                  276.8                                           299.5      311.1    400
                                            273.0
 1500
                                                                                                                           250
                                2028.6     2136.8      2515.6       2695.3      2973.9        3124.8   2882.9     2569.2
  500                                                                                                                      100
           2001       2002       2003       2004        2005        2006         2007         2008     2009        2010

         Total revenues of the electronic communications market
         Investments into the electronic communications network infrastructure
Note: Before 2004, when evaluating the electronic communications market, the revenues, received from provision of data
transmission, cable television and MMDS, radio and television programs transmission and wire radio services were not included.
Figure 5. The dynamics of value of the electronic communications sector and investments into the electronic
communications infrastructure in 2001–2010, LTL million
Source: RRT



         The continuous operators’ investments into the next generation fibre technologies in Lithuania
determined, that in 2010 the number of fibre lines grew by 21 per cent (see Figure 6 and Table 1).
According to the data, published by FTTH Council Europe in 2011 February, Lithuania, in terms of the
number of households, connected to the Internet over fibre keeps the first spot within the EU: at the end
of 2010 Lithuania, which reached 21 per cent of fibre penetration, surpassed Sweden (13 per cent),
                                                                i
Norway (12 per cent) and Slovenia (11 per cent) . According to the data, published by FTTH Council
Europe in 2011, Lithuania took the second rank within the EU in terms of increase of penetration.
                                                                                         ii
Lithuania takes the sixth rank in the world in terms of the said indicator .
         The rapid implementation of new technologies in Lithuania did not remain unnoticed by one of the
most famous group of analysts, i. e. The Economist Group. The report on digital economy rankings,


                                                                                                                                 9
produced by the said group, published in cooperation with the specialists of IBM’s Institute for Business
         iii
Value , included Kaunas, together with three Japan’s and one South Korea’s city among the world’s top
five cities in terms of the highest quality of broadband communication.




                                                                                                     91 037
                                                                                      51 703
                                                                       15 126

                                   52 664
               12 937                            94 700               148 013         202 119        216 640

               2005*              2006*           2007*                2008            2009           2010
         FTTB           FTTH


*The number of subscribers, to whom Internet access is provided by FTTx

Figure 6. The dynamics of the number of local fibre lines in 2005–2010
Source: RRT



                In addition, in the report of broadband study, performed by Oxford University for several years in
a row, analyzing the readiness of different countries to satisfy consumer expectations for innovative
                                        iv
quality services in the future , as "ready for tomorrow", in 2010 Lithuania also found itself in the company
of the most advanced countries, such as South Korea, Japan and Sweden and was among the fourteen
most ready countries (71 countries were evaluated totally).



Table 1. Distribution of European countries in terms of the number of households, connected to the Internet
over fiber lines in 2009-2010 and the penetration in 2010, per cent
 Position               December 2010        Penetration as of the end of 2010   December 2009       June 2009
    1.                     Lithuania                      20,96 %                   Lithuania         Sweden
    2.                     Sweden                         12,93 %                   Sweden             Norway
    3.                     Norway                         12,03 %                    Norway           Slovenia
    4.                     Slovenia                       11,19 %                   Slovenia          Andorra
    5.                     Slovakia                       8,73 %                     Estonia          Denmark
    6.                     Denmark                        7,84 %                    Denmark            Iceland
    7.                     Estonia                        5,33 %                    Slovakia          Lithuania
    8.                     Bulgaria                       4,97 %                     Finland       The Netherlands
    9.                     Finland                        3,21 %                 The Netherlands      Slovakia
   10.          The Netherlands                           3,02 %                      Italy            Finland
Source: FTTH Council Europe, 2010



                As the transition to digital broadcasting is foreseen on 29 October, 2012, the abolition of
analogue broadcasting is going to change the television segment. According to the data of RRT, at the
end of 2010 approximately 47 per cent of all households used paid television services and almost 44 per
cent of paid television subscribers received television signals digitally. Successful implementation of new
generation fibre technologies also influenced television undertakings activity ratios. Although cable TV is
                                                                                                               v
the most popular pay-TV transmission platform today, but according to the forecasts of IDATE , in the
next few years we‘ll see the rapid development of IPTV and DVB-T. These forecasts are coming true in
Lithuania pay-TV market: number of DVB-T subscribers last year increase by 26.7 per cent, number of
IPTV subscribers – by 18.2 per cent.

                                                                                                                     10
         The first symptoms of recovery also were felt in the postal sector in 2010: the total revenues from
the postal and courier services, received in 2010, compared with those, received in the corresponding
time period in 2009, grew by 5.6 per cent and reached LTL 238.6 million. The revenues from the courier
activities grew by 5.6 per cent, the revenues from postal activities – by 5.5 per cent (see Figure 7).




                                                                        98.5
                                                   90.2                                      97.7                103.0
                              88.8
         69.8
                                                  129.5                160.2                128.4                135.6
         76.2                107.3

         2005                 2006                 2007                2008                  2009                2010
      Revenues from courier services           Revenues from postal services

Figure 7. The revenues from postal and courier activities in 2005–2010, LTL million
Source: RRT



         Compared to 2009, in 2010 the total revenues, received by postal services operator Lietuvos
Paštas AB reduced by 13.8 per cent, which mostly resulted from the reduction of revenues, received from
other (non postal and non courier services) activities.




i
   http://www.ftthcouncil.eu/documents/press_release/2010/PR2010_EU_Ranking_mid_2010_Final.pdf
ii
    http://www.ftthcouncil.org/en/newsroom/2011/02/10/global-ftth-councils-latest-country-ranking-shows-further-momentum-on-all-
fiber-
iii
    http://graphics.eiu.com/upload/EIU_Digital_economy_rankings_2010_FINAL_WEB.pdf
iv
    http://www.sbs.ox.ac.uk/Documents/broadband%20study/Third%20annual%20broadband%20study%202010.pdf
v
     IDATE Consulting & Research, TV 2010. Markets & Trends, Facts & Figures. http://www.idate.org/en/Consulting/About-
IDATE/About-IDATE_9_.html




                                                                                                                            11
                         2. Electronic Communications Market


2.1. Preconditions for the Development of the Electronic Communications Sector



                                          2.1.1. General Trends


        Since 2003, i. e. with the beginning of the process of liberalization of the electronic
communications sector, the electronic communications sector, which had been characterizing itself with
an especially high level of dynamics, abundance of innovation and rapid growth of consumers’ attention
for almost a decade, changed beyond recognition and also gained acceleration within the development
process. The joyful yesterday’s news on Lithuania’s European leadership in laying fibre networks are
signs of tomorrow’s changes, which are still hard to imagine today. In 2010, notwithstanding a difficult
economic situation, a dynamic breakthrough of development of latest information technologies can be
observed, which is going to determine the new competitive conditions for the business and ensure an
exceptional quality of services to the consumers.




        The structure of the electronic communications market

        At the end of 2010 there were 153 participants on the electronic communications market of
Lithuania, engaged in different electronic communications activities (there were 159 at the end of 2009).
Even 70.6 per cent of the market participants, i. e. 108 undertakings, performed activities on the Internet
access market. Although the number of enterprises, who provided the Internet services, remained almost
unchanged during the time period of 2009–2010, the number of the Internet subscribers grew by 10.5 per
cent during the same period, which created the conditions for development of the market.
        At the end of 2010 13 undertakings provided mobile communication networks and/or services, 51
undertakings provided fixed communication networks and/or services, 12 undertakings performed leased
lines services provision activities. 55 undertakings provided television services. Several small participants
withdrew from the electronic communications services provision market in 2010, there also were those,
who merged with of transferred their infrastructure to other service providers – one could say that the
economic recession had no significant influence on the market structure (according to the number of
market participants). Figure 8 shows the dynamics of the number of market participants.




                                                                                                          12
                                                                                              Lithuanian Communications Sector 2010




                             115
   115




                                                     115




                                                                              113




                                                                                                      109




                                                                                                                            108
                                                                                                                  57
               54




                                                54




                                                                 54




                                                                                                                                            55
               15




                                        52
                                        15




                                                                15




                                                                                              52




                                                                                                                                       51
                                                           13




                                                                                    13


                                                                                         13




                                                                                                                 13




                                                                                                                                  13
                                   12




                                                                                         47




                                                                                                                                       12
                                                                48




                                                                                                            12
                                                                                                                 48
         11
              40


          2005                       2006                   2007                      2008                   2009                  2010

   Internet access        Mobile communication       Fixed communication            Leased lines   Television

Figure 8. The dynamics of the number of market participants in 2005–2010
Source: RRT



              When speaking of the changes of the structure of the electronic communications market and
evaluating the structure according to the revenues, one can see that the structure of the electronic
communications sector has retained the trend of change, which is observed for several years already
(see Figure 9). The growth trend remained in. the Internet access market, which grew by 1.8 percentage
points in 2010 and by 9.1 percentage points since 2005 and in the audiovisual and leased lines markets,
which grew by 4.1 and 1.2 percentage points correspondingly during the 2010.




  2010          11.8 %             7.4 %                        38.2 %                               19.2 %                   21.3 %

  2009           12.3 %        5.5 %                            39.1 %                             17.4 %                    23.5 %

  2008           12.8 %        3.8 %                            43.6 %                               14.6 %                  23.4 %

  2007            13.9 %       3.3 %                              46.6 %                               12.4 %                22.7 %


  2006             15.7 %           3.3 %                          45.9 %                               11.5 %               22.5 %

  2005              17.6 %              3.3 %                        46.8 %                                 10.1 %            21.1 %


              Fixed communication                                                   Provision of leased lines and physical optical fibre
              Audiovisual                                                           Mobile communication
              Internet access and other data transmission                           Networks interconnection

Figure 9. Distribution of the revenues of the electronic communications sector according to the markets,
2005–2010, in per cent
Source: RRT



              Mobile communication market share, which still remains the largest in the electronic
communications structure according to the revenues, reduced by 0.9 percentage point in 2010 and by 8.8
percentage points since 2005 within the total electronic communications sector revenues structure.
Compared to 2009, the revenues, received from provision of mobile communication networks and
services in 2010, reduced by 12.6 per cent. The growing market competition, having influence on the
reduction of service prices, also determines the reduction of the mobile communication revenues and
consequently the reduction of the mobile communication market share within the total market revenues
structure. It is probable that the mobile communication operators, taking into consideration the growing
demand for smartphones and tablet PCs, expect the future growth of revenues from the services of data


                                                                                                                                                 13
                                                                                   Lithuanian Communications Sector 2010

transmission over mobile communication networks. However the share within the revenue structure,
which may be occupied by such services, is evaluated differently: for instance, Omnitel UAB forecasts 30
per cent growth of the data transmission revenues, while other operators (Bit Lietuva UAB and Tele2
                                                                                                  1
UAB) are not so enthusiastic in evaluating the growth rate of such revenues . It is worth to note the fact
that the share of voice services revenues remains the largest (76.1 per cent) in the revenues structure of
the mobile communication market however it is reducing while the provision of data transmission services
is growing.
            In 2010 the revenues from fixed communications reduced by 14.8 per cent, however in the total
revenue structure the share of fixed communications underwent no essential changes and, as in the
previous year, reduced by one half of a percentage point. The fixed communication revenues reduced by
31.8 per cent since 2005 and their share within the total revenues structure of the communications sector
reduced by 5.8 percentage points.
            Compared to 2009, in 2010 the revenues from provision of Internet access and other data
transmission services reduced by 1.7 per cent and the share of Internet access and other data
transmission market within the total revenue structure, grew by 1.8 percentage points. During the last 5
years, the market have grown by 9.1 percentage points.
                                                                                        i
            In 2010 the revenues from provision of audiovisual services (wholesale and retail) grew by 20.8
per cent, by 1.8 percentage points within the total revenues structure. Compared to 2005, in 2010 the
share of the audiovisual services revenues within the total revenues structure grew by 3.9 percentage
points. Such growth of the audiovisual services market during the latter years most likely was determined
by the growing usage of pay-TV services and the forthcoming date of 29 October, 2012, when switchover
from analogue terrestrial television to digital terrestrial television happen.
            Although in 2010 the networks interconnection market share within the total electronic
communications sector revenues structure reduced the most, i. e. by 2.2 percentage points, during the
time period of 2005–2009 the networks interconnection market was growing, and started to shrink only in
the last year, after calls termination prices was reduced by RRT.
             During the time period of 2006–2010 the number of subscribers was most rapidly growing on the
Internet access services and pay-TV market: the number of subscribers of both Internet access and pay-
TV services grew twice and, in 2010, amounted to 879.6 and 638.3 thousand correspondingly. After the
public mobile communication market reached maturity, the number of active public mobile communication
subscribers remained stable. The insignificant reduction of the number of mobile communication
subscribers during the latter years resulted from the refusal of excessive SIM cards. The number of fixed
communication subscribers reduced by 7.4 per cent and at the end of the time period amounted to 733.7
thousand (see Table 2). At the end of 2010 the number of active public mobile communication
subscribers exceeded the number of fixed communications subscribers 6.7 times. In case similar trends
of growth of the Internet access and television markets remain in the future, the number of subscribers is
likely to continue to grow.




i
    Revenues from provision of radio and television services, advertising revenues not included

                                                                                                                     14
                                                                                Lithuanian Communications Sector 2010


Table 2. The number of subscribers in the electronic communications sector in 2006–2010, thousand
                                                2006               2007               2008                  2009                  2010

 Fixed communication                            792.4             799.4               784.9                 747.4             733.7

 Mobile communication                           4 718             4 921               5 023                 4 961             4 891

 Internet access                                417.5             581.9               709.8                 796.1             879.6

 Television (pay-TV)                            358.8             386.4               462.7                 599.3             638.3

Source: RRT



          When analyzing the average revenues per user (ARPU) (see Figure 10), it can be seen that in
2010 the Internet service providers received the largest monthly ARPU – LTL 41.8, i. e. LTL 5.8 less than
in 2009, and mobile communication operators received the smallest monthly ARPU – LTL 19.7, i. e. LTL
2.9 less than one year ago. Compared to 2009, in 2010 the ARPU, received for fixed communication
services also reduced by LTL 6.1 and amounted to LTL 40.3. The ARPU decrease trend remained
throughout the time period of 2006–2010, the largest decrease i. e. by LTL 17.5 was experienced by the
ARPU for the Internet access services, LTL 12.5 – for fixed communication services, LTL 5.8 – for mobile
communication services, however it is worth mentioning that the ARPU for pay-TV services grew during
the last 4 years and in 2010 amounted to LTL 24.9, i. e. LTL 6.6 more than in 2006.



   2010                40.3                  19.7                   41.8                          24.9

   2009                  46.4                       22.6                    47.6                           20.6

   2008                      50.0                       26.0                        50.5                          19.3

   2007                      50.8                          28.6                       50.6                          18.6

   2006                       52.8                         25.5                            59.3                            18.3

          0             20              40            60            80              100              120            140                  160
     Fixed communication             Mobile communication         Internet access          Pay-TV

Figure 10. The average monthly revenues per user in 2005–2010, LTL
Source: RRT




          The financial results of the major market players

          The electronic communications market, which was liberalized in 2003, paved the way for new
market participants and created the conditions for competition. In 2005 the consumers of mobile
communication voice services were satisfied with LTL 2 per minute price-list, connection, functioning only
in certain territories of the Republic of Lithuania, several television channels and quite frequently black
and white television and slow dial-up Internet communication at home. During the later years the market
participants had to overcome completely different challenges, not only how to find the ways for best
satisfaction of the consumers’ needs to receive the entire range of highest quality services at the lowest
price at only one terminal equipment, but also how to offer innovative solutions, to develop the demand
for new services and to adapt to the not so favourable economic situation in the country.


                                                                                                                                          15
                                                                                  Lithuanian Communications Sector 2010

             Although the real consequences of the economic recession manifested themselves only in 2010,
the major operators adapted differently on the reducing electronic communications market, which is
reflected in their financial results for 2010, presented in Table 3.


Table 3. The financial indicators of some electronic communications market participants in 2010
                                                                                           ii
                                Revenues, LTL million      The change, per cent     EBITDA , LTL million   The change, per cent
          TEO LT, AB                     773                          -5.2                  310                    -8.3
          Omnitel UAB                    604                      -16.3                         n/a                n/a
        Bit Lietuva UAB                 515.2                     -12.3                    166.3                  +11.4
           Tele2 UAB                    472.5                     -13.2                     162                   -15.7
Source: the operators’ websites



             TEO LT, AB, according to its representatives, properly coordinated its costs and managed to
remain profitable on the shrinking electronic communications market. In 2010 the net profit of the
company reached LTL 163 million, the EBITDA amounted to LTL 310 million and the EBITDA margin
reached more than 40 per cent. Although the amount of revenues from provision of the Internet services
to a certain extent reduced in 2010, compared to the previous year, the number of customers was
significantly growing, especially in the fourth quarter. During the year the number of users of fibre Internet
access grew 1.7 times, i. e. up to almost 104 thousand, which amounted to almost 30 per cent of the total
number of the users of the broadband Internet, provided by TEO LT, AB (346 thousand). The number of
the customers of the television services, provided by the company grew by 28.2 per cent and at the year-
end amounted to 131.2 thousand. Such an increase of the customer base and the growth of revenues
from provision of television and contact center services created the possibility for covering the reducing
revenues from the fixed communications activities and ensuring a relatively small change of revenues of
                                                                  2
TEO LT, AB (the revenues reduced by 5.2 per cent) .
             In 2010 Omnitel UAB earned LTL 604 million, i. e. 16 per cent less than in 2009. On its website
the company also states that it managed to retain a stable EBITDA margin, i. e. 33 per cent. According to
Omnitel UAB, the reduction of revenues in 2010 resulted from the reduced call termination charges, the
overall recession of the country’s economy and the continuing reduction of the prices of the services of
Omnitel UAB. On the other hand, the scopes of sales of equipment, i. e. smartphones and laptop
computers with wireless cellular modems grew by 24 per cent in 2010, thus creating the conditions for
                                                                                                                     3
increasing the revenues of Omnitel UAB from the provision of data transmission services in 2011 .
             The revenues of Bit Lietuva UAB, compared to other mobile communication operators,
underwent the smallest reduction in 2010, i. e. by 12.3 per cent and reached LTL 515.2 million, the
company’s EBITDA grew by 11.4 per cent. According to Bit Lietuva UAB, such indicators resulted from
the reduction of the calls termination prices, the prices of the measures, relating to the calls termination
services and the retail mobile communication service prices, which are among the lowest in Europe.
Although the overall mobile communication operators market reduced in 2010, the company successfully
developed the private users segment. The number of private subscribers grew by 3.2 per cent, i. e. from
1.014 up to 1.046 million and Bit Lietuva UAB increased the number of users of mobile Internet by 25
             4
per cent .



ii
     EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization

                                                                                                                            16
                                                                              Lithuanian Communications Sector 2010

         At the end of 2010 the revenues of Tele2 UAB exceeded LTL 472 million, i. e. the revenues were
13 per cent smaller than in 2009. The EBITDA last year reached more than LTL 162 million, the EBITDA
margin amounted to 34 per cent. According to Tele2 UAB, the reduction of revenues resulted from the
reduction of the calls termination prices by 40 per cent starting from the beginning of the year and the
further reduction of service prices due to competition. However the reduction of service prices helped to
attract new customers – the number of both private and business customers and thus, the consumption
           5
increased .




         Investments

         After the reduction of investments into the electronic communications sector, which occurred for
two years in a row, a certain revival can be observed in 2010: the market operators’ investments
amounted to LTL 311.1 million and, compared to the previous year, grew by 3.8 per cent (see Figure 11).


 3500     671.0                                                                                                        700
                                                                              461.0
                     387.8                                                                                             550
 2500                                                               350.2              375.1
                                310.0       273.0      276.8                                      299.5       311.1
                                                                                                                       400
 1500
                                                                                                                       250
                               2 028.6     2136.8     2 515.6    2 695.3     2 973.9   3 124.8    2 882.9    2 569.2
  500                                                                                                                  100
          2001       2002        2003       2004       2005         2006      2007      2008       2009       2010
           Total revenues of the electronic communications market
           Investments into the electronic communications network infrastructure

Note: Before 2004, when evaluating the electronic communications market, the revenues, received from provision of data
transmission, cable television and MMDS, radio and television programs transmission and wire radio services were not included.
Figure 11. The revenues of the electronic communications market and the investments into the infrastructure
in 2001-2010, LTL million
Source: RRT



         In 2010 the largest part of the operators’ investments was dedicated to development of fibre
networks, 3G mobile communication and Worldwide Interoperability Microwave Access (Wimax)
technology. Essentially all the investments were dedicated for the purpose of ensuring higher speed rate
Internet and data transmission services and meeting the future consumers’ expectations.
         In 2010 TEO LT, AB dedicated LTL 191 million for long-term investment (LTL 100 million in the
fourth quarter of 2010 alone). The greater part (79 per cent) of investment was for development of the
core and next generation fibre access networks (LTL 158 million). It was planned that in 2010 the
investment of TEO LT, AB into the fibre communications network, developed in fifty cities and towns of
Lithuania will amount to more than LTL 70 million. At the end of 2010 almost 30 per cent (100 thousand)
users of the broadband services, provided by TEO LT, AB connected to the Internet via fibre access (10
                                             6                                                                           7
percentage points more than in 2009) . According to the data, published by TEO LT, AB at its website , at
the end of 2011 the total investment into the next generation fibre communication access network,
developed for the time period of four years, will exceed LTL 325 million. In 2010 the remaining amount
was invested into the development of the information systems, renovation of buildings, transport, etc.
         In 2010 Omnitel UAB received its main revenues from sales of terminal equipment, i. e.
smartphones and laptop computers with wireless cellular modems, which, in order to provide the
services, need a high speed rate 3G mobile Internet, therefore in 2010 Omnitel UAB dedicated its
                                                                                                                             17
                                                                         Lithuanian Communications Sector 2010

investments to implementation of base stations, ensuring the 3G communication (270 locations) and
                                                            8
increasing the capacity of the aforementioned stations. .
          Tele2 UAB, which in 2009 invested the largest amounts during the whole history of its activities,
reached that in 2010 its customers in the major cities and more than ten smaller towns of Lithuania were
able to commence using the 3G communication and states that it is ready to commence developing the
fourth generation wireless communication network on the base of the LTE technology in Lithuania and will
                                                     9
strive for becoming the price leader in this area .
          It is likely that the development plans of LRTC AB, which were postponed in March of 2010, were
revived in November. At its website the company states that it has modernized its WiMAX communication
network and increased the average Internet speed rate, found the technical feasibilities for increasing the
high speed rate and got ready for further development of the network: the planned network development
investment is LTL 100 million, the consumers will be offered new convenient terminal equipments and the
                                                                            10
speed rate of which is even higher than the presently maximum 4G .
          At its website Bit       Lietuva UAB stated that in 2010 it increased the scopes of its investment,
which have surpassed the LTL 35 million.. Most investments are done into the further development of the
                                                                          11
3G mobile radiocommunication network and increase of its quality .
          According to the data of Statistics Lithuania, cumulative foreign direct investment (FDI) in the
Lithuanian information technology (IT) sector at the beginning of 2010 in Lithuania reached LTL 4 342.4
million, which amounted to 13 per cent of the total FDI in Lithuania. The largest investment in the sector
was made by Sweden (29 per cent), Denmark (21 per cent) and Latvia (19 per cent) (see Figure 12). The
largest share of FDI (91 per cent of the total investment into the IT sector) is made into the electronic
communications enterprises (see Figure 13).




 2010        29 %        19 %      21 %                   2010                          91 %



 2009          36 %             27 %      13 %            2009                          92 %



 2008     18 %        26 %         29 %
                                                          2008                          91 %



 2007     19 %                   65 %
                                                          2007                          90 %



 2006     17 %                   68 %
                                                          2006                          91 %

        Sweden                     Latvia
        Denmark                    The Netherlands               IT industry              IT trade
        Estonia                    Other countries
                                                                 Telecommunications       IT services

Figure 12. The main countries, investing into            Figure 13. The distribution of the foreign direct
Lithuania’s information technology sector in 2006–       investment    within     Lithuania’s   information
2010, per cent                                           technology sector in 2006–2010, per cent
Source: Statistics Lithuania                             Source: Statistics Lithuania




                                                                                                              18
                                                                                 Lithuanian Communications Sector 2010


         Summary


    In 2010 the Internet access, audiovisual and leased lines markets retained the trend of growth within
    the total structure of the electronic communications sector. The aforementioned markets grew by 1.8
    percentage point, 4.1 percentage points and 1.2 percentage point correspondingly.
    Compared to 2009, in 2010 the revenues, received from provision of mobile communication networks
    and services, reduced by 12.6 per cent (LTL 984.1 million), the revenues, received from provision of
    fixed communication – by 14.8 per cent and the revenues from provision of Internet access and other
    data transmission services reduced by 1.7 per cent, while the revenues, received from provision of
    audiovisual services (both wholesale and retail) grew by 20.8 per cent.
    In 2010 the number of subscribers of the Internet access services grew the most, i. e. by 10.5 per
    cent. At the end and of the year there were 879.6 thousand subscribers of the said services. The
    number of subscribers of pay-TV grew by 6.5 per cent and at the end of the year reached 638.3
    thousand. The number of active subscribers of public mobile communications remained stable and
    amounted to 4.9 million. The number of fixed communication subscribers reduced by 1.8 per cent and
    at the end of 2010 amounted to 733.7 thousand.
    In 2010 the highest monthly average revenues per user were received for the Internet services – LTL
    41.8, i. e. LTL 5.8 less than in 2009, the lowest – by mobile communication operators – LTL 19.7, i. e.
    LTL 2.9 less than a year ago. Although in 2010 the ARPU for the pay-TV services amounted to LTL
    24.9, i. e. LTL 4.3 more than one year ago.
    After the reduction of investments into the electronic communications market, which was observed for
    two years in a row, a certain revival was noted in 2010: the market operators’ investments amounted
    to LTL 311.1 million and, compared to 2009, grew by 3.8 per cent. The trend allows for optimistic
    expectation of the revival of the entire sector during the coming years.




1
 http://vz.lt/straipsnis/2010/11/10/Auksiniai_duomenu_perdavimo_kiausiniai_dar_nebyra?readcomment=1
2
  http://www.teo.lt/press/2587
3
 http://www.omnitel.lt/apie-omnitel/ziniasklaidai/pranesimai-spaudai/ketvirtadaliu-auge-irangos-pardavimai-2010/49623
4
  http://www.elektronika.lt/naujienos/verslas/27916/bite-augino-klientu-skaiciu-nors-rinka-traukesi/
5
  http://www.tele2.lt/mobiliojo_rysio_vartotojai_2010_m_daugiausia_kalbejo_tele2_tinkle.html
6
  http://www.teo.lt/press/2531
7
  http://www.teo.lt/press/2531
8
 http://www.ekonomika.lt/naujiena/mobilusis-rysys-nuo-istorijos-iki-4g-galimybiu-lietuvoje-ir-pasaulyje-2341.html?page=2
9
  http://www.tele2.lt/tele2_organizavo_pirma_viesa_4g_mobiliojo_interneto_pristatyma.html
10
   http://www.erdves.info/?news;id.2114
11
   http://www.elektronika.lt/naujienos/verslas/27916/bite-augino-klientu-skaiciu-nors-rinka-traukesi/




                                          2.1.2. Social and Economic Factors



          The rapid development of information technologies, observed throughout the last decade
cardinally changed the needs of residents and enterprises and their possibility to supply themselves with
computers, mobile telephones and develop their computer literacy. During the time period of 2001–2010

                                                                                                                           19
                                                                                                 Lithuanian Communications Sector 2010

possession of computers in households increased 6.3 times, the Internet use at home – more than 17
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 96.9 per cent in 2010, the Internet
use in enterprises increased almost one and a half times and the number of enterprises, having their own
                                                                    i
webpages or homepages increased 2.4 times . The economic recession to a certain extent slowed down
the rates of growth of possession of computers in households and the Internet use, however it is likely
that during the coming years, with the increase of individuals’ possibilities to pay for the services and 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. The most important issue remains the strengthening of
confidence in the cyber-space, determined by the increasing awareness of the threats to networks and
information security and ability to safeguard against the threats.




                  Households

                  Households with terminal equipment. As the main equipments, used for receiving electronic
communications services, remain computers (both desktop and laptop computers) and mobile phones.
Despite the complicated economic situation in the country and withdrawal of the exemption on income
tax, applied to individuals, purchasing a personal computer, from 01 January, 2009, the possession of
computers in households increased in 2010 however slower than in the previous years: according to the
data of Statistics Lithuania, during the time period of 2004–2008 the average growth of possession of
computers in households was 6 percentage points, in 2009 – 4.2 percentage points and in 2010 – 1.6
percentage point (see Figure 14).
                  According to the data of Statistics Lithuania, in 2000 in average one out of twenty households
had a computer at home, 29.0 per cent in 2005 and in 2010 – already 53.8 per cent of all the households
had a personal computer. Compared to 2009, in 2010 the ratio of the households with a personal
computer in urban and rural areas reduced very insignificantly: in 2010, the number of urban households
with a personal computer (61.3 per cent) was 1.57 times bigger than in rural areas (39 per cent). In 2009
the difference was 1.6 times bigger.
                                                                                                                                                          61.3 %
                                                                                                                                         59.5 %
                                                                                                                         54.1 %




                                                                                                                                                       53.8 %
                                                                                                    52.5 %




                                                                                                                                       52.2 %
                                                                                                                       48.0 %
                                                                                       46.9 %



                                                                                                42.0 %




                                                                                                                                                  39.0 %
                                                                                                                                  37.3 %
                                                                                   36.5 %
                                                                     36.4 %




                                                                                                                  34.5 %
                                                       11.2 %
                10.9 %




                                                      32.4 %



                                                                  29.0 %
     8.5 %




                                            6.6 %
                                  5.3 %



                                           25.7 %



                                                    25.0 %




                                                                                                         23.6 %
             3.0 %



                         15.2 %



                                          19.3 %




                                                                13.5 %




                                                                              17.9 %
                         12.0 %




        2001              2002             2003      2004         2005           2006              2007             2008            2009             2010

       All households             Urban     Rural
Figure 14. Computers in households in 2001–2010, per cent
Sources: Information Technologies in Lithuania 2007, Statistics Lithuania, Vilnius 2007; Information Technologies in Lithuania 2010,
Statistics Lithuania, Vilnius 2010




i
    The data of 2002–2010

                                                                                                                                                                   20
                                                                                                                                      Lithuanian Communications Sector 2010

              According to the data of Statistics Lithuania, 86.9 per cent of all Lithuanian households (1.6
percentage points more than in 2009) had a mobile phone in 2010.
              The possession of terminal equipment in households directly depends on household income. In
2010 the absolute majority of the households (96.4 per cent), whose monthly income in cash exceeded
LTL 3 001 had a personal computer, 95.6 per cent of households had Internet access. 20.6 per cent of
households, with monthly income up to LTL 1 000, had a personal computer and 23.3 per cent had the
Internet access (see Figure 15).




                                                                                                                                            91.2 % 90.1 %                                      96.4 % 95.6 %
                                                                                                   69.4 % 69.3 %
                                                     46.7 % 48.2 %
            20.6 % 23.3 %

               up to 1 000                           1 000–1 400                                     1 401–2 000                              2 001–3 000                                      3 001 and more

           Have personal computer                                       Have Internet access

Figure 15. The households, who have personal computer and Internet access at home according to their
monthly income in LTL in 2010, per cent
Source: Information Technologies in Lithuania 2010, Statistics Lithuania, Vilnius 2010



              Use of electronic communications services in households. The economic situation in the
country resulted in a slower use of the Internet in households, especially rural ones. According to the data
of Statistics Lithuania, 54.9 per cent of all households had the Internet access at home in 2010. The
number of households, who had the Internet access among urban households (62.2 per cent) was one
and a half times larger than that of rural ones (40.7 per cent).




                                                                                                                                                                                                             62.2 %
                                                                                                                                                                             61.5 %




                                                                                                                                                                                                    54.9 %
                                                                                                                                                                    54.7 %
                                                                                                                                                  53.5 %
                                                                                                                    50.4 %




                                                                                                                                         47.1 %




                                                                                                                                                                                      40.8 %




                                                                                                                                                                                                                      40.7 %
                                                                                                           40.3 %
                                                                                         40.2 %




                                                                                                                                                           32.9 %
                                                                                31.7 %
           8.7 %
   6.2 %




                                                                        3.6 %




                                                                                                                             22.6 %
                           10.6 %
                                    15.2 %




                                                      14.4 %
                                                               19.6 %




                                                                                                  16.4 %
                                             2.0 %
                   1.1 %




       2003                     2004                       2005                      2006                       2007                          2008                       2009                            2010
      All households               Urban                    Rural

Figure 16. Households with Internet access in 2003–2010, per cent
Sources: Information Technologies in Lithuania 2007, Statistics Lithuania, Vilnius 2007; Information Technologies in Lithuania 2010,
Statistics Lithuania, Vilnius 2010



              Comparing the indicators of Internet access in households in the EU Member States during the
latter years, a faster growth of the indicator was observed in Lithuania, as compared with the EU average:
in 2004–2010 the Internet access penetration in Lithuania grew by 8.2 percentage points and in the EU –
by 4.8 percentage points annually. According to the data of Eurostat, in 2010 the indicator of Internet
access in households in Lithuania, which had grown only by 1 percentage point since 2009, was lower
than the EU average, which reached 70 per cent – there were 61 Internet access units per 100
households in Lithuania (see Figure 17). Although the growth of the level of broadband Internet in


                                                                                                                                                                                                                               21
                                                                           Lithuanian Communications Sector 2010

households in Lithuania is to a certain extent lower than in the EU (during the time period of 2004–2010
the share of Lithuanian households, using the broadband Internet increased by 6.7 per cent at an
average while in the EU the said indicator grew by 7.7 per cent at an average), similar growth trends were
observed during the last years, which shows that the majority of the Internet users use the broadband
Internet both in Lithuania (54 per cent) and in other EU Member States (see Figure 18).
          The lack of need remained the main reason for not having Internet access at home in Lithuania in
     1
2010 . In other words, the main barrier for the growth of Internet penetration in Lithuania is the scope of
demand, i. e. the insufficient demand for these services.



     The Netherlands                                  91 %                                                                   83 %
                                                                        Sweden
                                                      90 %
          Luxembourg                                          The Netherlands*
                                                    88 %                                                                    80 %
             Sweden                                                    Denmark
                                                    86 %                                                                76 %
            Denmark                                                      Finland
                                                  82 %
            Germany                                                    The UK*
                                                 81 %                  Germany                                          75 %
              Finland
                                                 80 %              Luxembourg                                         70 %
             The UK
                                               74 %                     Belgium                                       70 %
              France
                                             73 %                                                                     69 %
              Austria                                                      Malta
                                             73 %                                                                    67 %
             Belgium                                                     France
                                             72 %                                                                64 %
              Ireland                                                   Estonia
                                             70 %                       Austria                                  64 %
               EU 27
                                             70 %                      Slovenia                                  62 %
                   Malta
                                           68 %                           EU 27                                 61 %
             Slovenia                                                                                          58 %
                                           68 %                          Ireland
              Estonia                                                                                          57 %
                                           67 %                           Spain
             Slovakia                                                                                           57 %
                                          63 %                           Poland
              Poland                                                                                          54 %
                                          61 %                         Lithuania
            Lithuania                                                                                         54 %
                                          61 %                  Czech Republic
      Czech Republic                                                                                          53 %
                                        60 %                            Latvia
               Latvia                                                                                     52 %
                                        60 %                           Hungary
             Hungary                                                                                      51 %
                                        59 %                             Cyprus
               Spain                                                                                      50 %
                                        59 %                           Portugal
                    Italy                                                                                49 %
                                      54 %                             Slovakia
              Cyprus                                                                                     49 %
                                                                            Italy
                                      54 %                                                             41 %
             Portugal                                                    Greece
                                   46 %                                                         26 %
              Greece                                                    Bulgaria
                                 42 %                                                          23 %
            Romania                                                    Romania
                               33 %
             Bulgaria
                                                                2008     2009       2010
   2008    2009       2010
                                                             * the data for 2010 are not available
Figure 17. Level of Internet access in households in         Figure 18. Households using the broadband Internet
the EU in 2008–2010, per cent                                in the EU Member States in 2008–2010, per cent
Source: Eurostat                                             Source: Eurostat



          According to the data of Statistics Lithuania, in 2010 60.5 per cent of persons aged 16 to 74 used
the Internet in Lithuania (58.1 per cent in 2009), including 94.2 per cent of persons aged 16 to 24, 83.4
                                                                                           2
per cent of persons aged 25 to 34 and 68 per cent of persons aged 35 to 44 .
          According to the data of Eurostat, in 2010 in the European Union 65 per cent of individuals
access the Internet regularly (at least once a week), while in Lithuania the Internet was used at least once
a week by 58 per cent of all the individuals (see Figure 19). However a part of individuals, who have




                                                                                                                               22
                                                                               Lithuanian Communications Sector 2010

never used the Internet still remains considerable in Lithuania: according to the data of Eurostat, in 2010
it reached 35 per cent, while it amounts to 26 per cent in the EU (see Figure 20).


                                                                              Sweden        7%
            Sweden                                          88 %                             12 %
                                                        76 %        The Netherlands         8%
 The Netherlands                                            88 %                                18 %
                                                       74 %                                 8%
                                                            86 %         Luxembourg                 29 %
           Denmark
                                                      73 %                   Denmark        9%
      Luxembourg                                            86 %                              14 %
                                                  63 %                                       11 %
            Finland                                        83 %               Finland             23 %
                                                  62 %                                        13 %
            The UK                                       80 %                 The UK                28 %
                                               54 %                                            17 %
            Belgium                                    75 %                  Germany                29 %
                                              53 %                                             17 %
            France*                                    75 %                  Slovakia                            42 %
                                                       74 %                   Belgium            18 %
           Germany                                                                                           39 %
                                                54 %                                             18 %
           Slovakia                                    73 %                   France*
                                          43 %                                                     22 %
            Estonia                                71 %                       Estonia                       36 %
                                             54 %                                                   23 %
             Austria                               70 %                        Austria                       40 %
                                           49 %                                                      26 %
             EU 27                               65 %                          EU 27                             43 %
                                        43 %                                                          27 %
           Slovenia                              65 %                          Ireland                                  55 %
                                       40 %                                                           28 %
             Ireland                            63 %                         Slovenia                              48 %
                                   31 %
                                                62 %                 Czech Republic                   28 %
              Latvia                                                                                                       63 %
                                     36 %
                                               61 %                             Latvia                    29 %
           Hungary                                                                                                  51 %
                                     34 %
              Malta                            60 %                             Spain                      32 %
                                     34 %                                                                           50 %
              Spain                           58 %                           Hungary                       32 %
                                    35 %                                                                                  60 %
           Lithuania                          58 %                             Poland                       35 %
                                   30 %                                                                                  58 %
  Czech Republic                              58 %                           Lithuania                      35 %
                                 26 %                                                                                     61 %
             Poland                          55 %                               Malta                       36 %
                                  29 %                                                                                   57 %
            Cyprus                         50 %                                   Italy                          41 %
                                 26 %                                                                                      62 %
               Italy                      48 %                                Cyprus                              45 %
                                 28 %                                                                                      64 %
           Portugal                       47 %                               Portugal                             46 %
                                  28 %                                                                                     63 %
           Bulgaria*                    42 %                                 Bulgaria*                              51 %
            Greece                       41 %                                 Greece                                52 %
                              18 %                                                                                               73 %
        Romania*                       34 %                                Romania*                                      57 %

    2005      2010                                                    2005     2010

* the data of 2005 are not available                               * the data of 2005 are not available
Figure 19. The share of individuals, who access the                Figure 20. The share of individuals, who have never
Internet regularly in the EU Member States in 2005                 used the Internet in the EU Member States in 2005
and in 2010, per cent                                              and in 2010, per cent
Source: Eurostat                                                   Source: Eurostat


           According to the data of Eurostat, in Lithuania internet access using the mobile phone via the
third generation mobile radio communication (UMTS) and laptop via wireless connection among
individuals are not so widely spread as in the European Union, however the demand for such services is
likely to grow with the popularization of smartphones and with the increasing need to be within reach in
any place at any time (see Figure 21).




                                                                                                                                    23
                                                                                                                                                                                                 Lithuanian Communications Sector 2010




                                                                                                                                                                                                                                                                             43 %
                                                                                                                                                                                                                                                                            40 %
                                                                                                                                                                                                                                                                         32 %
                                                                                                                                                                                                                                                                        30 %
                                                                                                                                                                                                                                                                        29 %
                                                                                                                                                                                                                                                                        30 %
                                                                                                                                                                                                                                                      28 %
                                                                                                                                                                                                                                            27 %
                                                                                                                                                                                                                                  23 %
        22 %
        7%

       20 %
       20 %




                                                                                                                                                                                                                                                                     20 %




                                                                                                                                                                                                                                                                     20 %
      19 %

      19 %
      18 %
      3%




     16 %
      6%
      6%
      5%




    15 %




                                                                                                                                                                                                                                                                   15 %
      4%




     4%
     4%
    14 %
     4%




   13 %




   13 %
    2%



   12 %

   12 %




   12 %




                                                                                                                                                                                                                                                    3%
                                                                                                                                                                                                                                                              12 %
    3%




    2%
  11 %
  11 %


    3%
   3%




  10 %
   2%
   3%




   2%
  1%

  1%




  9%




  9%
  6%



  5%




                                                                                                                                                                                                                                          6%
                                                                                      Malta
                                                                                              Latvia



                                                                                                                Slovenia




                                                                                                                                                                                                          Slovakia




                                                                                                                                                                                                                                                                            Sweden




                                                                                                                                                                                                                                                                                                                  Luxembourg
                                                 Cyprus
                                                          Czech Republic
                                                                            Hungary




                                                                                                                                                                                               Italy
   Greece



                        Bulgaria
                                     Lithuania




                                                                                                       Poland




                                                                                                                                                Spain

                                                                                                                                                        France


                                                                                                                                                                                    EU 27




                                                                                                                                                                                                                                                    Estonia

                                                                                                                                                                                                                                                               Austria


                                                                                                                                                                                                                                                                                      Ireland
                                                                                                                                                                                                                               Finland*
                                                                                                                           Portugal




                                                                                                                                                                                                                     The UK
                                                                                                                                                                  The Netherlands




                                                                                                                                                                                                                                          Germany
              Romania




                                                                                                                                      Belgium




                                                                                                                                                                                                                                                                                                        Denmark
      Via the mobile phone                                                 Via the laptop

* no data available
Figure 21. Access to the Internet by using a mobile phone and a laptop in the EU Member States in 2010, per
cent
Source: Eurostat



                    The purposes of using the Internet in Lithuania in 2010 remained the same as in 2009: most
frequently the Internet is used for communication (specified by 54 per cent of respondents), reading,
downloading online news, newspapers and magazines (52.3 per cent) as well as for searching for
information about goods and services (48.1 per cent). More and more residents use the e-banking
                                                                           3
services (36.8 per cent) .
                    The e-goverment services are also becoming more and more popular: according to the data of
Eurostat, in 2010 22 per cent of Lithuanian residents used the Internet for receiving and downloading
information from webpages of the state and public service institutions and for filling and sending official
forms (the EU average is 32 per cent). Among the EU Member States in 2010 the e-government services
were most actively used by the residents of Denmark (72 per cent), Sweden (62 per cent) and the
Netherlands (59 per cent) (see Figure 22).

                                                                                                                                                                                                                                                                                                                     72 %
                                                                                                                                                                                                                      62 %
                                                                                                                                                                                                                     59 %
                                                                                                                                                                                                                     58 %
                                                                                                                                                                                                                    55 %




                                                                                                                                                                                                                   52 %
                                                                                                                                                                                                                  47 %
                                                                                                                                                                                                                  46 %



                                                                                                                                                                                                                  4 6%
                                                                                                                                                                                                                 48 %
                                                                                                                                                                                                                 40 %
                                                                                                                                                                                                                 40 %
                                                                                                                                                                                                  37 %
                                                                                                                                                                                                                37 %
                                                                                                                                                     35 %
                                                                                                                                                    32 %
                                                                                                                                                    32 %
                                               31 %




                                                                                                                                                                                                               31 %
                                                                                                                                                                                                              29 %
                                              28 %
                                              28 %




                                                                                                                                                   32 %




                                                                                                                                                                                                              39 %
                                              27 %




                                                                                                                                                   27 %




                                                                                                                                                                                                             24 %
        7%




                                                                                                                                                  23 %
        7%




                                 Cyprus 22 %
                                            17 %




                                            19 %




                                                                                                                                                                                                            19 %
                                            21 %


                               Lithuania 22 %
                                Portugal 23 %




                                            18 %




                                                                                                                                                 18 %
                                            14 %

                          Czech Republic 17 %




                                            18%
                                           15 %
     13 %




                                           11 %


                                           14 %




                                           13 %
                                           12 %
                                           13%
                                           5%




                                    Malta


                                   Latvia




                                                                                                                                                                                                                                                               Luxembourg
                                     Italy
              Greece




                                                                                                                                                Spain




                                                                                                                                                                                    Slovakia




                                                                                                                                                                                                                               Slovenia


                                                                                                                                                                                                                                                    Estonia



                                                                                                                                                                                                                                                                            Finland



                                                                                                                                                                                                                                                                                                        Sweden
                        Bulgaria*




                                                                                                                                                                                               Germany*




                                                                                                                                                                                                                                          The UK
                                Hungary
                                  Poland




                                  Ireland




                                                                                                                                                                  EU 27




                                                                                                                                                                                                                     Austria
                                                                                                                                                                                                          France*




                                                                                                                                                                                                                                                                                      The Netherlands
   Romania*




                                                                                                                                                                                                                                                                                                                  Denmark*
                                                                                                                                                        Belgium




              2005                  2010

* the data of 2005 are not available
Figure 22. The use of the e-goverment services in the EU Member States in 2005 and in 2010, per cent
Source: Eurostat




                                                                                                                                                                                                                                                                                                                               24
                                                                                                                                                                                      Lithuanian Communications Sector 2010

                     The use of e-commerce for private purposes has also been increasing, although in terms of use
of the said services Lithuania is still behind the EU average (see Figure 23).




                                                                                                                                                                                                                        68 %
                                                                                                                                                                                                                        67 %
                                                                                                                                                                                                                        67 %
                                                                                                                                                                                                                       66 %
                                                                                                                                                                                                                      60 %
                                                                                                                                                                                                                      59 %
                                                                                                                                                                                                                      59 %
                                                                                                                                                                                                                     56 %




                                                                                                                                                                                                                    50 %




                                                                                                                                                                                                                   48 %
                                                                                                                                                                                                                  44 %
                                                                                                                                                                                                                  43 %
                                                                                                                          42 %



                                                                                                                                                                                                                  42 %
                                                                                                                          40 %




                                                                                                                                                                                                                 39 %
                                                                                                                         38 %
                                                                                                                         38 %




                                                                                                                                                                                                                 38 %
                                                                                                                         36 %
                                                                                                                        33 %
                                                                                                                       29 %
                                                                                                                      27 %
                                                                                                                       27%




                                                                                                                      25 %
                    24 %




                                                                                                                     24 %
                                                                                                                     5%
                   18 %




                                                                                                                    19 %
                    5%




                    5%



                    5%

                  18 %
                   4%




                                                                                                                   16 %
      4%




                  15 %




                                                                                                                   14 %
                 12 %

                 15 %


                 17 %




                 12 %
                  2%




                 17 %
                 11 %

                 6%
                 6%


                 7%


                 8%




                                                                                                                   7%
                                                                                                                   9%
                                                                  Latvia




                                                                                                                                                      Slovakia


                                                                                                                                                                           Malta




                                                                                                                                                                                                                                             Luxembourg
                                                                                                                                                                                                                                                          Sweden
                                                                                                                Slovenia*
                                                          Italy




                                                                                     Cyprus
                                                                                              Hungary




                                                                                                                            Czech Republic
                          Lithuania
                                      Greece




                                                                           Estonia




                                                                                                        Spain




                                                                                                                                             Poland


                                                                                                                                                                 Ireland




                                                                                                                                                                                             EU 27
                                                                                                                                                                                                     Austria


                                                                                                                                                                                                                         Finland
              Bulgaria*




                                                                                                                                                                                                               France*
                                               Portugal




                                                                                                                                                                                                                                                                                     The UK
                                                                                                                                                                                                                                   Germany




                                                                                                                                                                                                                                                                   The Netherlands
   Romania*




                                                                                                                                                                                   Belgium




                                                                                                                                                                                                                                                                                              Denmark
              2005                    2010
* the data of 2005 are not available
Figure 23. Purchase of goods and services for private purposes in the EU Member States in 2005 and in 2010,
per cent
Source: Eurostat



                     According to the data of Eurostat as of 2009, 48 per cent of Lithuania’s residents did not
purchase any goods or services on line due to the absence of the need to do that (the EU average is 17
per cent). The demand would emerge only upon shaping a favourable environment for purchasing for
private purposes and with growing confidence in the e-commerce (increase of awareness on the
possibilities of ordering goods or services and the security of networks and information). The
development of competition on Lithuanian courier services market, which is going to result in more
favorable postal items delivery conditions for consumers as well as the EU wide success of regulation of
postal items delivery tariffs would be among the important factors for encouraging of development of e-
commerce.
                     With the growth of use of electronic communications services and increase of the number of
networks and information security incidents, the Internet security becomes more important. According to
                                                          4
the data of Eurostat , the major part, i. e. 84 per cent of the EU consumers (in Lithuania the indicator
reached 79 per cent) used IT security software (anti-virus, anti-spam and firewalls) in 2010. Despite that
the computers of almost one third of all the users (31 per cent) were infected with viruses, which resulted
in loss of information or time. Among the European Union Member States computer virus attacks in 2010
were faced by most residents of Bulgaria (58 per cent), Malta (50 per cent) and Slovakia (47 per cent),
the smallest number of residents, who faced computer viruses, was in Austria (14 per cent), Ireland (15
per cent) and Finland (20 per cent). In Lithuania the indicator reached 34 per cent and was similar to the
EU average (31 per cent) (see Figure 24). In 2010 the highest number of users, who experienced abuse
of personal information sent on the Internet or other privacy violations was in Bulgaria and Spain (7 per
cent) and in Italy and Netherlands (6 per cent). In Lithuania there were only 2 per cent of such users.
During the same time period 3 per cent of EU users suffered financial loss due to data phishing,
fraudulent payment card use or pharming. The highest shares of such users were in Latvia (8 per cent),
                                                                                                                                                                                                                           5
the United Kingdom (7 per cent), Malta and Austria (5 per cent) (see Figure 25) .
                                                                                                                                                                                                                                                                                                        25
                                                                   Lithuanian Communications Sector 2010



                                                              Sweden                2%
          Austria    14 %                                                     1%
                                                               Finland              2%
           Ireland   15 %                                                    1%
                                                              Slovenia       1%
          Finland     20 %                                                   1%
                                                       Czech Republic        1%
        Germany       22 %                                                   1%
                                                               Cyprus               2%
 The Netherlands       23 %                                                   1%
                                                             Lithuania        1 %
                                                                                    2%
  Czech Republic       26 %                                                                   4%
                                                               Ireland              2%
     Luxembourg         28 %                                 Germany                     3%
                                                                                    2%
        Denmark         29 %                                   Poland         1%
                                                                                         3%
          Poland        30 %                                  Slovakia        1%
                                                                                         3%
         Sweden             31 %                              Belgium                    3%
                                                                                         3%
                                                               Greece               2%
          The UK            31 %                                                         3%
                                                               Austria                             5%
           EU 27            31 %                                                         3%
                                                                EU 27                    3%
         Belgium            32 %                                                              4%
                                                              Hungary               2%
            Spain           33 %                                                              4%
                                                               Estonia              2%
          Greece            34 %                                                              4%
                                                              Portugal              2%
                                                                                              4%
          Cyprus            34 %                                                         3%
                                                             Denmark                          4%
        Lithuania           34 %                                 Malta                             5%
                                                                                              4%
          France            34 %                               The UK                                        7%
                                                                                              4%
         Portugal            37 %                              France               2%
                                                                                                   5%
         Slovenia            37 %                         Luxembourg                     3%
                                                                                                   5%
                                                             Romania                2%
           Latvia             41 %                                                                 5%
                                                                Latvia                                            8%
          Estonia             42 %                                                                 5%
                                                                  Italy                       4%
             Italy             45 %                                                                     6%
                                                      The Netherlands                    3%
         Hungary               46 %                                                                     6%
                                                              Bulgaria        1%
         Slovakia              47 %                                                                          7%
                                                                Spain                         4%
                                                                                                             7%
            Malta                  50 %
         Bulgaria                    58 %               Privacy violations   Financial losses


Figure 24. The share of persons, whose computers     Figure 25. Individuals, who experienced privacy
were infected with viruses in the EU Member States   violations and financial loss due to networks and
in 2010, per cent                                    information security incidents in the EU Member
Source: Eurostat                                     States in 2010, per cent
                                                     Source: Eurostat



         According to the results of the annual survey of the country’s individuals’ opinion on networks
security, commissioned by RRT at the end of 2010, the most frequent networks and information security
incidents, faced by the individuals, remain computer viruses and spam (see Figure 26). 49 per cent of
respondents caught computer viruses and 29 per cent received spam.




                                                                                                                       26
                                                                                  Lithuanian Communications Sector 2010

                                  2.0 %
              Data phishing
                                  1.5 %

             Cracks into PC        2.7 %
                                   2.5 %
                                3.7 %
              Illegal content
                                3.7 %

                                               29.2 %
                      Spam
                                                                58.3 %

                                                           48.6 %
          Computer viruses
                                                                         77.1 %
   2009    2010

Figure 26. The networks and information security incidents, experienced by individuals in 2009–2010, per
cent
Source: RRT // Esaugumas



          61 per cent of individuals stated that they used antivirus software for data protection. Another
frequently used security tool, i. e. anti-spam – was specified by 13 per cent of respondents.



                                                8.0 %
                      Backup copies of data       16.1 %

                                Antispyware     6.0 %
                                                10.8 %

                                   Firewalls    9.0 %
                                                   18.0 %
                                                    21.0 %
   Updates of the used operational system
                                                         34.0 %
                                                 13.0 %
                                  Anti-spam
                                                   19.3 %
                                                                    61.0 %
                                  Anti-virus                                  91.4 %
      2009          2010

Figure 27. The networks and information security tools, used by individuals in 2009–2010, per cent
Source: RRT // Esaugumas




          Enterprises

          The trends of Internet use among enterprises in 2010 remained similar to those, observed in the
previous years: more than 96 per cent of Lithuanian enterprises used computers and the Internet in 2010
(see Figure 28). According to the Internet usage in enterprises, Lithuania reached the EU average in
2008, and since 2009 Lithuania surpasses the said indicator by 1 percentage point. The largest growth of
the Internet usage in enterprises among the EU Member States from 2005 till 2010 was in Bulgaria (by 22
percentage points), in Latvia (by 16 percentage points) and in Portugal (by 13 percentage points) (see
Figure 29).




                                                                                                                    27
                                                                                             Lithuanian Communications Sector 2010

     84.4 %              84.8 %           89.7 %     91.7 %         91.7 %               90.5 %       94.8 %                96.1 %        96.9 %

                                                                                                      92.7 %                95.0 %        96.2 %
                                                     85.2 %         87.5 %               88.4 %
                                          79.8 %
     65.5 %              68.5 %




                                                                                                                                           65.2 %
                                                                                                                              61.7 %
                                                                                                        54.4 %
                                                                                          47.4 %
                                                                     41.3 %
                                                       40.8 %
       26.8 %




                          32.0 %




                                           38.6 %
      2002               2003             2004        2005          2006                 2007          2008                  2009         2010

         Have a website or a homepage               Use computers              Use the Internet


Figure 28. The usage of computers and the Internet in Lithuanian enterprises in 2002–2010, per cent
Source: Information Technologies in Lithuania 2010, Statistics Lithuania, Vilnius 2010



                96 per cent of Lithunian enterprises use the Internet and almost two thirds (65.2 per cent) have
websites or homepages (the EU Member States’ indicator reaches 69 per cent) (see Figures 29 and 30).




         Finland                                            100 %                       Sweden                                             89 %
        Slovakia                                         98 %                          Denmark                                             88 %
 The Netherlands                                         98 %                            Finland                                           87 %
       Denmark                                          97 %                           Germany                                            84 %
        Slovenia                                        97 %                     The Netherlands                                        81 %
        Belgium                                         97 %                              Austria                                       80 %
          Austria                                       97 %                            Belgium                                        78 %
       Germany                                          97 %                             The UK                                       76 %
            Spain                                       97 %                      Czech Republic                                     74 %
         France*                                        97 %                            Slovakia                                     74 %
        Sweden                                         96 %                             Slovenia                                     73 %
    Luxembourg                                         96 %                         Luxembourg                                     70 %
         Estonia                                       96 %                              Estonia                                   70 %
          Poland                                       96 %                                EU 27                                   69 %
                                                       96 %                               Ireland                                 68 %
       Lithuania
                                                     95 %                                   Malta                                66 %
  Czech Republic
                                                    94 %                                  Poland                                 65 %
             Italy
                                                    94 %                               Lithuania                                 65 %
           EU 27
                                                    94 %                                   Spain                               62 %
            Malta
                                                    94 %                                     Italy                             61 %
        Portugal
                                                  92 %                                   France*                              58 %
          Ireland
                                                91 %                                     Greece                               58 %
         The UK
                                                91 %                                    Hungary                              57 %
           Latvia
                                               90 %                                       Cyprus                           52 %
         Greece
                                               90 %                                     Portugal                           52 %
        Hungary
                                             88 %                                          Latvia                        48 %
          Cyprus
                                          85 %                                          Bulgaria                  37 %
       Bulgaria*
                                   79 %                                                Romania*                  35 %
       Romania*
     2005         2010                                                            2005      2010

* the data of 2005 are not available                                          * the data of 2005 are not available

Figure 29. The Internet usage in EU enterprises in                            Figure 30. The share of enterprises, having
2005 and in 2010, per cent                                                    websites or homepages in the EU in 2005 and in
Source: Eurostat                                                              2010, per cent
                                                                              Source: Eurostat



                In 2010 the fixed broadband technologies were most widely used at enterprises of Spain (95 per
cent), France and Finland (93 per cent). In Finland most enterprises use mobile communication


                                                                                                                                                    28
                                                                                                                                                                                                                                      Lithuanian Communications Sector 2010

technologies for connecting to the Internet over broadband access (68 per cent). In Lithuania the share of
enterprises, using the Internet over broadband access is not so far behind the EU average: 78 per cent of
Lithuanian enterprises used fixed broadband technologies (the EU average is 85 per cent) and 20 per
cent used mobile broadband technologies (the EU average is 27 per cent) (see Figure 31).




               95 %
               93 %




               93 %
              91 %
              90 %
              89 %




              89 %




              88 %
             87 %




             87 %




             87 %
             85 %


             85 %




             85 %




             85 %




             84 %



             84 %
            83 %




            83 %
            80 %




           78 %




           78 %




           75 %
          71 %




         68 %
         66 %




         66 %
        61 %




       55 %
      49 %




      46 %
     43 %
    36 %
    36 %

    36 %
    35 %
     9%
     9%




   31 %
   29 %
  28 %

  28 %

  28 %
  27 %
  27 %
    6%
    8%




  25 %
 22 %
 20 %


 21 %
 11 %


 18 %

 19 %


 20 %
 12 %
                                                             Latvia




                                                                                                                          Luxembourg




                                                                                                                                                                                                                           Malta




                                                                                                                                                                                                                                                        Slovenia


                                                                                                                                                                                                                                                                              Slovakia




                                                                                                                                                                                                                                                                                                                                       Sweden
                                                 Cyprus



                                                                           Czech Republic
                                                                                                Italy




                                                                                                                                                        Hungary
  Greece



                        Bulgaria

                                     Estonia




                                                                                                            Lithuania



                                                                                                                                          Poland




                                                                                                                                                                                  EU 27




                                                                                                                                                                                                                                     France




                                                                                                                                                                                                                                                                   Spain


                                                                                                                                                                                                                                                                                            Ireland




                                                                                                                                                                                                                                                                                                                            Austria



                                                                                                                                                                                                                                                                                                                                                Finland
                                                                                                                                                                     Portugal




                                                                                                                                                                                                                                                                                                      The UK
                                                                                                                                                                                           Germany
                                                                                                                                                                                                      The Netherlands
            Romania




                                                                                                                                                                                                                                              Belgium




                                                                                                                                                                                                                                                                                                               Denmark
    Fixed broadband                                    Mobile broadband

Figure 31. The share of households, using the Internet over broadband access in the EU Member States in
2010, per cent
Source: Eurostat



                  According to the data of Statistics Lithuania, in 2009 Lithuanian enterprises mostly used the
Internet for receiving banking and financial services (92.9 per cent of enterprises) and for communication
with state institutions (95 per cent of enterprises).
                  The use of e-commerce services among Lithuanian enterprises has also been growing. In 2009
the share of Lithuanian enterprises’ turnover from electronic commerce amounted to 14 per cent and was
                                                                                                                                                   6
equal to the EU average (see Figure 32) . The highest turnover from e-commerce was in Ireland (24 per
cent) and Czech Republic (19 per cent).

                                                                                                                                                                                                                                                                                                                                                24 %
                                                                                                                                                                                                                                                                                                                                      19 %
                                                                                                                                                                                                                                                                                  18 %

                                                                                                                                                                                                                                                                                                 18 %

                                                                                                                                                                                                                                                                                                           18 %

                                                                                                                                                                                                                                                                                                                         18 %
                                                                                                                                                                                                                                                         17 %

                                                                                                                                                                                                                                                                    17 %
                                                                                                                                                                                                                                              16 %
                                                                                                                                                                                                  14 %

                                                                                                                                                                                                                        14 %

                                                                                                                                                                                                                                    14 %
                           4%




                                                                                                                                                                         13 %

                                                                                                                                                                                     13 %
                                                                                                                                                          12 %
                                                                                                                          Slovakia 11 %

                                                                                                                                           Spain 11 %
                                                                                                          Slovenia 10 %
              2%
   1%




                                                                                            Estonia 9 %
                                         Italy 5 %

                                                      Latvia 7 %

                                                                      Poland 8 %




                                                                                                                                                                                                                                                                                                 Sweden
   Cyprus




                                                                                                                                                                                                                                              Hungary
             Bulgaria




                                                                                                                                                                         France

                                                                                                                                                                                      Austria



                                                                                                                                                                                                                        Lithuania

                                                                                                                                                                                                                                    EU 27




                                                                                                                                                                                                                                                                                                           Finland




                                                                                                                                                                                                                                                                                                                                                Ireland
                                                                                                                                                          Portugal




                                                                                                                                                                                                                                                         The UK
                                                                                                                                                                                                Netherlands




                                                                                                                                                                                                                                                                                  Germany




                                                                                                                                                                                                                                                                                                                                   Republic
                           Romania




                                                                                                                                                                                                                                                                                                                         Belgium
                                                                                                                                                                                                                                                                    Denmark




                                                                                                                                                                                                                                                                                                                                    Czech
                                                                                                                                                                                                    The




Figure 32. The share of enterprises’ turnover from e-commerce in the EU in 2009, per cent
Source: Eurostat



                  According to the data of Eurostat, in 2010 22 per cent of Lithuania’s enterprises sold their goods
and services on the Internet (the EU-27 average is 14 per cent) and, according to the said indicator,
Lithuania ranked the fourth in the EU together with Germany and the Netherlands. The largest share of
enterprises, who sold their goods and services on the Internet in the EU was in Belgium (26 per cent),
Denmark (25 per cent) and Sweden (24 per cent) (see Figure 33). 26 per cent of Lithuania’s enterprises


                                                                                                                                                                                                                                                                                                                                                          29
                                                                                Lithuanian Communications Sector 2010

purchased goods and services on the Internet in 2010 (the EU average is 28 per cent) and thus, Lithuania
                   th
ranked the 12 among the EU Member States (see Figure 34).



          Belgium                                         26 %            Sweden                                                 53 %
                                                          25 %                                                                  51 %
          Denmark                                                         Belgium
                                                        24 %                                                               48 %
           Sweden                                                       Denmark*
                                                    22 %                                                                  45 %
 The Netherlands                                                           The UK
                                                    22 %                                                                   44 %
        Germany*                                                           Ireland
                                                    22 %                                                                 43 %
          Lithuania                                                     Germany*
                                                   21 %                                                             39 %
            Ireland                                                        Austria
                                                   20 %                                                           34 %
  Czech Republic                                                      Luxembourg
                                                 19 %                                                           33 %
          Portugal                                                 Czech Republic
                                            16 %                                                                32 %
           Finland                                                The Netherlands
                                            16 %                                                            28 %
             Malta                                                        Finland*
                                            15 %                                                            28 %
           The UK                                                           EU 27
                                          14 %                                                             26 %
            EU 27                                                        Lithuania
                                          14 %                                                           22 %
            Austria                                                       Portugal
                                                                                                         21 %
                                          14 %                              Spain
      Luxembourg
                                                                                                     20 %
                                         12 %                                Malta
            France
                                                                                                     19 %
                                         12 %                              France
            Spain
                                                                                                   17 %
                                     10 %                                  Estonia
          Slovenia
                                                                                                   17 %
                                     10 %                                 Hungary
           Estonia
                                                                                                   17 %
                                    9%                                        Italy
           Greece
                                                                                                   16 %
                                    8%                                    Slovenia
            Poland                                                                                14 %
                                    8%                                     Cyprus
          Hungary                                                                                 14 %
                                7%                                        Slovakia
           Cyprus                                                                             12 %
                                7%                                        Poland*
          Slovakia
                                6%                                        Greece*
             Latvia                                                                          9%
                                6%                                          Latvia
          Romania                                                                            7%
                               4%                                        Romania
               Italy                                                                    4%
                               4%                                         Bulgaria
          Bulgaria
   2008     2009        2010                                                2008      2009    2010

* the data of 2008 are not available                             * the data of Germany and Finland for 2008, the data of Denmark,
                                                                 Greece and Poland for 2009 and the data of Greece for 2010 are
                                                                 not available
Figure 33. The share of enterprises, who sold their              Figure 34. The share of enterprises, who purchased
goods or services on the Internet in the EU in                   goods or services on the Internet in the EU in 2008–
2008–2010, per cent                                              2010, per cent
Source: Eurostat                                                 Source: Eurostat



          With the growth of use of electronic communications services and for the purpose of ensuring
efficient prevention of crime in virtual space the use of networks and information security tools becomes
especially important. The results of the annual survey of Internet security of enterprises, commissioned by
RRT in December 2010, have shown that 92.04 per cent of enterprises use anti-virus software, almost
every second enterprise (42 per cent) makes backup copies of data and every fourth (25.2 per cent) uses
anti-spam (see Figure 35).




                                                                                                                                        30
                                                                                Lithuanian Communications Sector 2010

                                              12.5 %
                           Antispyw are        15.5 %
                                                 19.8 %
                               Firew alls
                                                     30.1 %
                                                   25.2 %
                              Anti-spam              30.3 %
                                                     30.0 %
 Updates of the used operational system               33.6 %
                                                          42.0 %
                 Backup copies of data
                                                             49.4 %
                                                                                92.4 %
                             Anti-virus                                          95.5 %
     2009       2010
Figure 35. The networks and information security tools, used by Lithuanian enterprises in 2009–2010, per
cent
Source: RRT // Esaugumas



         The most frequent networks and information security incidents, faced by enterprises in 2010,
were spam and computer viruses (see Figure 36). Spam was faced by 62 per cent of enterprises and
representatives of 49 per cent of the surveyed enterprises specified computer viruses as the biggest
threat. Compared to the results of analogical survey, performed in 2009, the number of enterprises, facing
computer viruses reduced by 2.3 percentage points and the number of enterprises, receiving spam – by
8.7 percentage points.



                                                      25.7 %
        Did not face any violations             14.8 %
                                            0.5 %
                     Data phishing          3.8 %
                                              2.0 %
                    Cracks into PC
                                              2.3 %
                                                                            61.1 %
                             Spam                                                69.8 %
                                                                      48.6 %
                 Computer viruses                                      50.9 %
     2009        2010

Figure 36 The cases of violations of networks and information security at Lithuanian enterprises in 2009–
2010, per cent
Source: RRT // Esaugumas




        Summary


   The rates of growth of supply with terminal equipment were not significant in 2010: the number of
   households, having personal computers grew by 1.6 percentage point up to 53.8 per cent, the number
   of enterprises – by 0.8 percentage point up to 96.9 per cent, the number of households, having the
   Internet access grew by 0.2 percentage point up to 54.9 per cent, the number of enterprises, using the
   Internet – by 1.2 percentage point up to 96.2 per cent.
   The continuous growth of use of the Internet over broadband access is observed among both
   households and enterprises. In 2010 54 per cent of households used the service (the EU average is
   61 per cent). 78 per cent of Lithuania’s enterprises used fixed communication technologies for



                                                                                                                  31
                                                                              Lithuanian Communications Sector 2010

    connecting to the Internet over broadband access (the EU average is 85 per cent), 20 per cent used
    mobile communication technologies (the EU average is 27 per cent).
    Although the share of Lithuania’s individuals, who use the Internet regularly (at least once a week)
    which reached 58 per cent in 2010, is not significantly lower than the EU average, the share of
    individuals, who have never used the Internet remains rather large, i. e. 35 per cent.
    The use of e-commerce has been growing among individuals however compared to the EU average,
    the services were not very popular in Lithuania in 2010. A different situation is observed in enterprises
    – in 2010 26 per cent of enterprises purchased goods and services on the Internet (the EU average is
    28 per cent) and 22 per cent sold goods and services on the Internet (the EU average is 14 per cent).




1
  Information Technologies in Lithuania 2010, Statistics Lithuania, Vilnius 2010
2
  Statistical Yearbook of Lithuania 2010, Statistics Lithuania, Vilnius 2010
3
  Information Technologies in Lithuania 2010, Statistics Lithuania, Vilnius 2010
4
    Nearly one third of internet users in the EU27 caught a computer virus, 7 February 2011, Eurostat //
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-07022011-AP/EN/4-07022011-AP-EN.PDF
5
    Nearly one third of internet users in the EU27 caught a computer virus, 7 February 2011, Eurostat //
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-07022011-AP/EN/4-07022011-AP-EN.PDF
6
  ICT usage in enterprises 2010, Data in focus 49/2010, Eurostat // http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-10-
049/EN/KS-QA-10-049-EN.PDF




                                                                                                                           32
                                                                                 Lithuanian Communications Sector 2010

                           2.2. Retail Electronic Communications Services


                                                      2.2.1. Voice Services


          Voice services are among the most important electronic communications services, as well as the
main source of revenues. Today neither private, nor social life of a person is imaginable without voice
services. However, observing the accelerating processes of development of technological possibilities
and convergence of services, it is likely that the concept of functionality of voice services, their
technologies and quality features may undergo further changes. However, without any doubt, voice
services will remain the main form of verbal communication.
          The present part of the Report provides the general overview of the size and structure of the
voice services market, measured by revenues and duration of calls, and a more detailed examination of
markets of voice services, provided over fixed and mobile communication networks, revealing the main
trends and their changes, which occurred during 2010.




          General market overview

          At the end of 2010 voice services were provided by 64 providers, including 13, providing public
mobile communications voice services and 51 providing public fixed communications voice services. The
providers of voice services amounted to 41.8 per cent of all the providers of electronic communications
services (153 providers).
          During the time period of 2006-2010 a reduction of both voice services markets (measuring by
revenues) and its share in the overall electronic communications market was observed (see Figure 37). In
2010 the revenues for the provision of retail voice services, received by all 64 providers of voice services
amounted to approximately one third in the overall structure of electronic communications revenues.
Compared with 2009, the voice services market share decreased by 4.4 percentage points. During 2010
the revenues of the voice services sector reduced by 21.2 per cent and amounted to LTL 857.8 million.



  1650          52.7 %                                                                                         60%
                                     49.7 %
                                                               45.8 %
                                                                                    37.8 %
  1100                                                                                              33.4 %     40%


    550                                                                                                        20%
                 1 420.7




                                      1 477.3




                                                                 1 362.4




                                                                                      1 089.2




                                                                                                     857.8




      0                                                                                                        0%
                2006                 2007                       2008                 2009           2010

      Revenues from voice services              The share in the electronic communications market

Figure 37. The dynamics of revenues from voice services, LTL million and the share of revenues from voice
services in the electronic communications market in 2006–2010, per cent
Source: RRT




                                                                                                                     33
                                                                                          Lithuanian Communications Sector 2010

         During the time period of 2006 – 2010 the revenues, received from the provision of mobile voice
services, amounted to the largest share of the total revenues for retail voice services (see Figure 38),
however the size of the share was reducing since 2007. During the time period of 2007 – 2010 the share
of revenues, received from the provision of mobile voice services reduced by 6.9 percentage points in the
total revenue structure, i. e. from 72.5 per cent to 65.6 per cent (in 2010). During the time period of 2007
– 2010 the total revenues from voice services reduced due to the decrease of revenues from both mobile
and fixed voice services. However, the revenues from mobile voice services reduced more rapidly than
the revenues from fixed voice services. In 2010 the revenues for mobile voice services were by 24.2 per
cent and the revenues for fixed voice services – by 14.8 per cent lower than the corresponding revenues,
received in 2009.



           418.0                        405.8
                                                                       392.2
                                                                                                       346.8
                                                                                                                            295.4
          1 002.7                      1 071.5                         970.2
                                                                                                       742.4
                                                                                                                            562.4


           2006                         2007                           2008                            2009                  2010

   Retail mobile voice services       Retail fixed voice services

Figure 38. The structure of the voice services sector according to the revenues for provision of mobile and
fixed services in 2006–2010, LTL million
Source: RRT



         In 2010 the voice services market, according to the duration of calls, originated by subscribers of
fixed and mobile communication service providers (including the calls, made by subscribers of Lithuanian
operators, using roaming services) grew further (see Figure 39). During 2003-2010 the duration of calls
grew 2.5 times - from 3 330.8 million minutes to 8 389.7 million minutes. Every year from 2003-2010 the
duration of the originated calls was higher than in the previous year. However, the rates of growth were
slowing down until 2009 and in 2010 they leaped again – up to 11.6 per cent.


 9000                   24.2%                                                                                                       25%

                                                                                                                                    20%
                                            15.5%          15.6%               14.0%
 6000                                                                                       12.3%                        11.6%      15%

                                                                                                               6.3%                 10%
 3000
              3 330.8




                            4 137.7




                                              4 779.5




                                                             5 524.0




                                                                                6 295.8




                                                                                             7 071.0




                                                                                                               7 519.5




                                                                                                                          8 389.7




                                                                                                                                    5%

    0                                                                                                                               0%
            2003            2004             2005           2006               2007          2008              2009      2010

        Traffic         Grow th


Figure 39. The dynamics of the size of the voice services market according to the duration of calls, million
minutes and the market growth rates, per cent in 2003–2010 m.
Source: RRT




                                                                                                                                     34
                                                                                   Lithuanian Communications Sector 2010

         When looking at the structure of the voice services market in 2003 – k 2010 according to the
duration of calls, it may be seen that in each year of the said period more and more calls were originated
on public mobile telephone communication networks and less – on public fixed networks. In 2010 the
traffic of originated voice calls on mobile networks amounted to 81.7 per cent of all voice calls (see Figure
40). Compared to 2009, in 2010 the duration of calls, originated on mobile networks grew by 15.7 per
cent and the duration of calls, originated on fixed networks reduced by 3.7 per cent.



 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


     Originated mobile communication voice calls traffic           Originated fixed communication voice calls traffic

Figure 40. The structure of voice calls sector according to the duration of calls in 2003–2010, million minutes
Source: RRT



         The decrease of revenues of the voice services market in 2010, even with the growth of the traffic
of originated calls, gives reasons to believe that the prices of services have reduced. The average price
per minute of a mobile call in 2010 reduced by 34.5 per cent and went down from 12.5 ct. to 8.2 ct. per
minute. The average price per minute of a fixed call reduced to a certain extent less, i. e. by 11.6 per cent
– from 21.8 ct. (in 2009) to 19.3 ct. per minute (in 2010). The reduction of revenues for mobile voice
services amounted to 24.2 per cent, while the duration of calls, originated on mobile networks grew by
15.7 per cent during the same period. On the fixed voice services market even the reducing prices failed
to result in a growth of the traffic of originated calls: in 2010 the revenues for fixed voice services reduced
by 14.8 per cent, while the duration of calls, made by fixed communication subscribers reduced by 3.7 per
cent.




         Mobile voice telephony services

         After the lengthy continuous growth, the number of mobile communication subscribers was
decreasing for the second year in a row; however the penetration was increasing after one year’s break
(see Figure 41). At the end of 2010 the number of active public mobile communication subscribers was
4.89 million, i. e. about 1.4 per cent less than in 2009. During 2010 the public mobile communication
penetration, in terms of active subscribers grew by 1.7 percentage point and at the end of 2010 there
were 150.7 subscribers per 100 residents.




                                                                                                                                    35
                                                                                               Lithuanian Communications Sector 2010

 6000                                                     139.4 %               146.2 %          149.9 %            149.0 %      150.7 %            160%
                                            127.9 %

 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
    0                                                                                                                                               20%
               2003       2004               2005          2006                  2007             2008                 2009       2010

        Number of subscribers               Penetration

Figure 41. The number of active public mobile communication subscribers, thousand and penetration, per
cent, in 2003–2010
Source: RRT



         The average revenue per user (hereinafter referred to as ARPU) for the retail public mobile
communication voice services in 2010 amounted to LTL 9.6, which is 23.2 per cent less than the
analogical revenues in 2009. The total mobile communication revenues (i. e. received not only for voice
services) per user in 2010 amounted to LTL 16.7 (i. e. 74.6 per cent bigger than the ARPU from voice
services) and, during the year, reduced by 11.6 per cent, which shows that the revenues for voice
services reduced more than the revenues for other mobile communication services (see Figure 42).




                   21.9                      23.5                            22.6
        17.7                         18.1                                                                       18.9
                                                                      16.1                                                                   16.7
                                                                                                    12.5
                                                                                                                                 9.6



           2006                         2007                             2008                                2009                     2010

        The ARPU for retail mobile communication voice services                             The ARPU for mobile communication services


Figure 42. The ARPU for retail mobile communication voice services and for mobile communication services
in 2006–2010, LTL
Source: RRT



         During 2010 subscribers of mobile communication operators originated 99.7 per cent of all the
mobile communication voice calls on the territory of the Republic of Lithuania and only 0.3 per cent of all
the calls were originated in foreign countries, when the subscriber of Lithuanian mobile communications
operator used roaming services. The duration of such calls grew throughout the time period of 2003 –
2010, with the exception of 2009. Although the roaming calls prices were reduced from 1 July,
2010 already for the third time and this encouraged more active use of roaming services (compared to
2009, in 2010 the duration of calls, originated by subscribers of Lithuanian mobile communications
operators, visiting foreign countries, grew by 8.33 per cent), the effect of the reduced prices was
outweighed by the reduced number of days, spent by the residents of the Republic of Lithuania in foreign
countries: in 2009 the said indicator reduced by 33.8 per cent and reached only 1600.1 thousand days, in




                                                                                                                                                       36
                                                                                     Lithuanian Communications Sector 2010
                                                                                       i
2010 the indicator was 10.0 per cent lower and reached 1440.9 days, the traffic of international calls
correspondingly amounted to 0.35 per cent of the total of the traffic, originated by subscribers of the
operators of the Republic of Lithuania in 2009 and 0.33 per cent of the traffic, originated in 2010.


    30                                                                                                                           30%
                                          19,1 %                        17,1 %
                                                         16,2 %                        15,1 %
                                                                                                                     8,3 %       15%
                            5,1 %

    20                                                                                                                           0%

                                                                                                     -17,9 %
                                                                                                                                 -15%
                13           13,7          16,3           18,9           22,1              25,5        20,9           22,6
    10                                                                                                                           -30%
              2003          2004           2005           2006           2007              2008        2009           2010
             Traffic       Change

Figure 43 The duration of calls, originated by Lithuanian mobile voice service users, visiting foreign
countries, million minutes and the traffic growth rate, per cent, in 2003–2010
Source: RRT



              The dynamics of the duration of the public mobile communication calls, originated on the territory
of the Republic of Lithuania in 2003 – 2010 shows the increasing demand for voice services among the
Lithuanian mobile communication users (see Figure 44). During 2010 15.7 per cent more mobile
communication calls were originated on the territory of the Republic of Lithuania than in 2009, the said
growth amounted to 6 833.2 million minutes. The trend of slow-down of the growth of duration of calls,
originated in the Republic of Lithuania during the time period of 2006 – 2009, when the traffic of mobile
calls, originated in Lithuania each year was decreasing by 5.6 percentage points on average, is over. The
6 percentage points growth was observed in 2010.



    7000                      25.7 %        24.3 %         27.4 %        22.0 %                                                   30%
                                                                                           16.9 %                     15.7 %
                                                                                                                                  20%
    3500                                                                                               9.7 %
                                                                                                                                  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
         0                                                                                                                        0%
                 2003         2004           2005           2006          2007              2008        2009          2010
             Traffic         Change

Figure 44. The dynamics of the traffic, originated on public mobile networks in the territory of the Republic of
Lithuania, million minutes and the traffic growth rates, per cent, in 2003–2010
Source: RRT



              The structure of public mobile traffic, originated on the territory of the Republic of Lithuania covers
the calls, terminated on the own network, on other public mobile networks, public fixed networks and
foreign operators’ networks.
              Viewing the structure of mobile traffic, originated on the territory of the Republic of Lithuania in
2010, it can be seen that the growth of use of public mobile voice services (see Figure 45) resulted from
the growth of volume of calls inside own network. 75.6 per cent of all the mobile calls were terminated on
the own network. During the year the duration of the said calls grew by 17.4 per cent, the duration of calls

i
    When the trips are organized and the services are provided by travel agencies or travel organizers. Source: Statistics Lithuania

                                                                                                                                       37
                                                                                                                                                                                         Lithuanian Communications Sector 2010

to other mobile networks grew by 12.2 per cent, the duration of calls to fixed networks grew by 4.3 per
cent and the duration of calls to foreign countries’ networks reduced by 6.2 per cent. The trend, when the
majority of all the calls, originated on mobile networks, are terminated on the own network, can be
explained by the pricing, applied by mobile operators, where lower prices are charged for the calls made
inside the own network than for the calls to other networks, or where several subscribers of the same
network are offered the possibility to make calls to each other free of charge. From 2003 to 2010 the
duration of calls, made inside the own network, grew by 25 per cent each year on average, however
during the time period of 2006– 2010 a continuous slow-down of growth of the duration of calls, made
inside the own network is observed. In 2010 the internal calls market grew by 5.7 percentage points.
                                                                         5 165.7
                                                               4 400.9
                                                     3 940.3
                                           3 372.5
                                 2 741.6
                       1 997.6
             1 575.7




                                                                                                                                                 1 487.9
                                                                                                                                       1 326.2
                                                                                                                             1 246.7
   1 107.4




                                                                                                                   1 051.0
                                                                                                           870.4
                                                                                                   807.8
                                                                                           662.1
                                                                                   520.7




                                                                                                                                                              143.0



                                                                                                                                                                                      104.5



                                                                                                                                                                                                              112.3
                                                                                                                                                                      108.8
                                                                                                                                                                              104.6


                                                                                                                                                                                              110.7
                                                                                                                                                                                                      114.9


                                                                                                                                                                                                                      117.1




                                                                                                                                                                                                                                     39.7



                                                                                                                                                                                                                                                          72.3
                                                                                                                                                                                                                                                                 81.5
                                                                                                                                                                                                                              36.8


                                                                                                                                                                                                                                            55.7
                                                                                                                                                                                                                                                   60.3



                                                                                                                                                                                                                                                                        66.5
                                                                                                                                                                                                                                                                               62.4
 Terminated on the own network                                                     Terminated on other mobile                                                       Terminated on fixed                                          Terminated on foreign
                                                                                    communication networks                                                        communication networks                                          operators'networks

      2003                                 2004                            2005             2006                        2007                               2008               2009                      2010

Figure 45. The dynamics of the public mobile traffic, originated on the territory of the Republic of Lithuania in
2003–2010, million minutes
Source: RRT



                   The calls, terminated on other mobile networks in 2010 amounted to 21.8 per cent of the entire
mobile traffic, originated on the territory of the Republic of Lithuania. The calls, terminated on fixed
networks amounted to 1.7 per cent of all the calls, originated on mobile networks. However, Lithuanian
mobile services users made even less calls to foreign operators'subscribers and the calls amounted to
approximately 1 per cent of all the calls, originated on mobile networks.
                   When examining the competitive aspects of the mobile retail voice services market, it makes
sense to examine the dynamics of the market shares of individual mobile service providers by measuring
the shares according to revenues and duration of calls. In 2010, as in 2009 mobile voice services were
provided by 13 undertakings: 4 operators (Omnitel UAB, Bit Lietuva UAB, Tele2 UAB, Mediafon UAB), 4
service providers, which did not have their own networks and 5 service retailers.
                   According to revenues and duration of calls, market shares, occupied by mobile voice services
providers, were distributed unevenly in 2010. The majority of revenues from voice services (including the
revenues from the calls, made by the subscribers, using roaming services), as in 2009, was received by
Omnitel UAB. The revenues amounted to 38 per cent from all the revenues, received from the provision
of retail mobile voice services, i. e. 7 percentage points less than in 2009. The market share, lost by
Omnitel UAB was shared by the other two operators: Tele2 UAB had 32 per cent, i. e. 3.1 percentage
points and Bit                                          Lietuva UAB - 27.4 per cent, i. e. 4.1 percentage points greater share of the
corresponding market than in 2009. Other service providers, providing retail mobile voice services in




                                                                                                                                                                                                                                                                                      38
                                                                                    Lithuanian Communications Sector 2010

other operators'networks, collectively received 2.6 per cent of all the revenues for mobile voice services
during 2010.
            In 2010 the majority of mobile calls (including the calls, originated and received by the
subscribers, visiting foreign countries) was originated by the subscribers of Tele2 UAB, which amounted
to approximately 41 per cent of the entire mobile voice services market (see Figure 46). During 2010 the
subscribers of Omnitel UAB originated 2 290.3 million minutes, i. e. 33.4 per cent of all the mobile
communication voice calls, originated during 2010, the duration of calls, originated by the subscribers of
Bit     Lietuva UAB amounted to 23.1 per cent (1 582.6 million minutes) and the remaining service
providers, providing retail mobile voice services in other operators'networks, shared 2.5 per cent of the
corresponding market. Compared to 2009, in 2010 Tele2 UAB market share of the mobile voice services
market, grew by 3 percentage points, Omnitel UAB relevant market share reduced by 2.9 percentage
points and Bit Lietuva UAB relevant market share grew insignificantly, i. e. by one half of a percentage
point.



     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   Bit Lietuva   Tele2    Other providers



Figure 46. The market shares, occupied by public mobile operators according to the duration of calls in 2006–
2010, per cent
Source: RRT



            Such difference of the structure of the mobile voice services market according to revenues and
duration of calls could be explained by different pricing, applied by operators. The average price of a
voice call, charged by Tele2 UAB (calculated as the relation between the revenues and minutes) was 6.4
ct. per minute (i. e. 3.1 ct. per minute lower than in 2009), the price, charged by Bit Lietuva UAB dropped
by 3.2 ct. per minute and reached 9.7 ct. per minute, the average voice call price, charged by Omnitel
UAB dropped most drastically in 2010, i. e. by 6.2 ct. per minute and amounted to 9.3 ct. per minute.
                                                                                      s
            In 2010 the largest shares of voice services market, occupied by Lithuania' mobile operators and
service providers, according to the duration of calls and the origin of the call (excluding the calls, made by
                                                     ii
the subscribers, visiting foreign countries) were shared by all the three major mobile operators. During
the year subscribers of Tele2 UAB mostly called within the network of Tele2 UAB (the calls made
between the subscribers in the same network), which amounted to 45.3 per cent of all the market of
internal calls (see Figure 47). It should be noted that the calls amounted to 83.4 per cent of all the calls,
originated on the network of Tele2 UAB. The subscribers of Omnitel UAB made 32.1 per cent of all the
internal calls, which amounted to 72.6 per cent of all the calls, originated on the network of Omnitel UAB
(1 655.9 million minutes). Bit Lietuva UAB took 21.4 per cent of the corresponding market. The largest


ii
 The data on the calls, made by Lithuanian mobile voice service users, visiting foreign countries are not structured according to the
call termination destination.

                                                                                                                                  39
                                                                                  Lithuanian Communications Sector 2010

share of calls, terminated on the networks of other operators of the Republic of Lithuania in 2010, as in
the previous years, were the calls, originated on the network of Omnitel UAB. During 2010 37.6 per cent
of all the calls, originated on Omnitel UAB network, were terminated on other mobile networks of the
Republic of Lithuania and 38 per cent were terminated on fixed networks. Calls to foreign operators’
networks were mostly made by subscribers of Bit Lietuva UAB – 39.3 per cent of the calls to foreign
countries were originated on the network of Bit Lietuva UAB (24.5 million minutes).



                Terminated on own network               32.1 %                21.4 %                     45.3 %            1.3 %

        Terminated on other mobile networks              37.6 %                    28.0 %                   27.9 %         6.6 %

               Terminated on fixed networks               38.0 %                   24.9 %                   33.0 %         4.0 %

 Terminated on foreign operators'networks               34.4 %                         39.3 %                     21.7 %   4.6 %

   Omnitel     Bit Lietuva   Tele2    Other providers


Figure 47. The market shares, occupied by public mobile communication operators according to the duration
of calls and the destination of calls in 2010, million minutes
Source: RRT



           The structure of the mobile voice services market is still not completely settled: the internal calls
market shares, taken by Omnitel UAB and Tele2 UAB, according to the duration of calls, retained the
same development trend, the market share of Bit Lietuva UAB, which was reducing from 2005 till 2009,
grew by 0.5 percentage point in 2010 (see Figure 48). During the time period from 2005 till 2010 the
market share of Tele2 grew the most (by 18.3 percentage points) and the market share of Omnitel UAB
reduced the most (by 21.5 percentage points). The market share of Bit Lietuva UAB decreased by 4.5
percentage points, i. e. 4.8 times slower than that of Omnitel UAB.



 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     Bit Lietuva   Tele2    Other providers

Figure 48. The shares of the market of internal calls, held by public mobile operators in 2005–2010, per cent
Source: RRT



           In 2010 the leader in terms of roaming services when the subscriber is in a foreign country was
Omnitel UAB with 40.7 per cent of the roaming services market share according to the duration of calls, i.
e. 16.4 percentage points less than in 2009. The roaming services market share, lost by Omnitel UAB
was shared by Tele2 UAB, Bit Lietuva UAB and other mobile communication service providers, whose
market shares grew, although unevenly. In 2010 the roaming services market share of Bit Lietuva UAB
grew the most (by 8.7 percentage points) and reached 39.3 per cent. Subscribers of Tele2 UAB, who

                                                                                                                               40
                                                                                                                  Lithuanian Communications Sector 2010

visited foreign countries in 2010, used 21.7 per cent of all the roaming minutes in 2010, i. e.
6.7 percentage points more than in 2009.
            Compared to 2009, in 2010 the subscribers of all the three largest mobile operators made more
calls per month on average (see Figure 49). The average duration of calls, made by one active subscriber
of Tele2 UAB (28.7 per cent) and Bit Lietuva UAB (14.3 per cent) per month grew most. As regards
Omnitel UAB the growth of this indicator was the lowest (8.6 per cent). Evaluating the average duration of
calls, made by one active mobile subscriber, in 2010 the subscribers of Bit Lietuva UAB, who made
most calls in 2006 – 2009, were surpassed by the subscribers of Tele2 UAB (130 minutes per month on
average). Comparing the change of the corresponding indicators of the three largest mobile operators of
Lithuania during the time period of 2006 – 2010, the number of minutes, used by one subscriber of Bit
Lietuva UAB per month grew by 17 per cent on average and the number of minutes, used by one
subscriber of Tele2 UAB per month – by 26.3 per cent each year. The duration of calls, originated by one
active subscriber of Omnitel UAB per month reduced each year until 2008, and, starting with 2009, it grew
again. However in 2010, as in 2009, one statistical subscriber of Omnitel UAB talked least per month
(98.4 minutes per month on average), compared to subscribers of the other two mobile operators.




                                                                                                                                                 140.8
                                                                                                                                         137.5
                                                                                                          130.0
                                                                   126.0




                                                                                                                                 126.8




                                                                                                                                                                                     116.8
                                                   109.3

                                                           111.4




                                                                                                                  105.0
                                                                                                  101.0
                              98.4




                                                                                                                                                                              99.5
                                            95.5
                       91.1




                                                                                                                                                                       89.8
  85.8




                                                                                                                          88.8
         83.5
                82.3




                                                                                           85.5




                                                                                                                                                                79.0
                                     69.0




                                                                                                                                                         69.5
                                                                                    64.5
                                                                             51.5




         Omnitel UAB                    Bit Lietuva UAB                              Tele2 UAB                        Other providers                     All the providers of
                                                                                                                                                         mobile communication
     2006              2007          2008             2009                 2010                                                                                 services


Figure 49. The average traffic, originated by one public mobile communication subscriber per month in 2006–
2010, minutes per month
Source: RRT



            When analyzing the ways of how the average voice services price, charged by mobile operators
influenced the volume of services, consumed by one active subscriber per month on average (according
to the duration and revenues), it may be observed that a subscriber of Tele2 UAB generated most calls
per month (130 minutes per month) for the lowest average voice call price, which reached 6 ct. per
minute (calculated as the relation between revenues and minutes). However a subscriber of Omnitel UAB
made 22 per cent less calls per month on average than a subscriber of Bit                                                                            Lietuva UAB, i. e. 98.4
minutes per month and 126 minutes per month correspondingly although the average price, charged by
Omnitel UAB was almost equal to that charged by Bit Lietuva UAB. In 2010 Bit Lietuva UAB received
the largest ARPU for retail voice services (LTL 12.3 per month). The ARPU, received by Omnitel UAB
(LTL 9.2 per month) was 25.2 per cent lower and that of Tele2 UAB (LTL 8.3 per month) was 32.2 per
cent lower than the ARPU of Bit Lietuva UAB. Such distribution shows that different operators’
subscribers choose the services according to different motives and the price is not necessarily the equally
important factor, encouraging consuming more or less.
            The choice of subscribers may also be evaluated by analyzing the flows of number portability
from a network of one operator into the network of another operator (see Table 4). During the time period
of 2006–2010 the number portability service within the mobile networks was used by 552.9 thousand


                                                                                                                                                                                             41
                                                                             Lithuanian Communications Sector 2010

subscribers. During 2010 the service was used by 123.4 thousand subscribers. As in 2009, the largest
share (54.1 per cent) of all the numbers, transferred during 2010 were those, transferred from the network
of Omnitel UAB, which amounted to 66.7 thousand numbers, 20.7 per cent of all the numbers were
transferred to other networks from the network of Bit Lietuva UAB (25.5 thousand), 22.5 per cent of all
the subscribers, who used the number portability service, transferred their numbers from the network of
Tele2 UAB (27.8 thousand numbers).


Table 4. The number portability flows between the public mobile operators in 2010, per cent
              2010              To Omnitel UAB          To Bit Lietuva UAB        To Tele2 UAB    To other networks
       From Omnitel UAB                                      41.3 %                  51.7 %            7.0 %
   From Bit Lietuva UAB              52.1 %                                          39.7 %            8.2 %
       From Tele2 UAB                57.3 %                  32.3 %                                    10.4 %
Source: RRT



          The highest number (51.7 per cent) of the network consumers of Omnitel UAB, who used the
number portability service in 2010, chose the services of Tele2 UAB. However, a significant part (41.3 per
cent) of subscribers of Omnitel UAB chose the services, offered by Bit Lietuva UAB. 52.1 per cent of
subscribers of Bit Lietuva UAB and 57.3 per cent of subscribers of Tele2 UAB, who decided to change
the operator, chose the network of Omnitel UAB. The vast majority of users (10.4 per cent), who
transferred their numbers from the network of Tele2 UAB and the largest number of users (4.7 thousand)
of Omnitel UAB chose to transfer their mobile number to another network, provided not by the major, but
by other mobile service providers.




          Fixed voice telephony services

          During 2010 the number of fixed telephone lines continued to reduce - by 1.8 per cent and the
penetration remained almost unchanged. In 2010 there were 22.6 fixed telephone lines per 100 residents
(see Figure 50).


 810                                                                                                            25%
              23.5 %        23.4 %            23.7 %              23.4 %
                                                                                    22.5 %        22.6%
 760                                                                                                            23%

              801.1          792.4            799.4               784.9              747.4         733.7
 710                                                                                                            21%
              2005           2006                2007             2008               2009          2010
        Number of lines    Penetration

Figure 50. The number of fixed telephony lines, thousand and fixed telephony lines penetration, per cent in
2005–2010 m.
Source: RRT



          The ARPU for both retail public fixed voice services and for all fixed telephone services continued
to reduce in 2010. The ARPU for retail public fixed voice services has decreased by 13.9 per cent during
the year. The revenues, received from all the fixed services from one subscriber per month, decreased by
13.2 per cent during the said period (see Figure 51).
                                                                                                                      42
                                                                                                                                    Lithuanian Communications Sector 2010




        44.5      44.7                                  42.3      432.0                             41.6      42.4                          38.7        39.6
                                                                                                                                                                                    33.3      34.4




              2006                                            2007                                         2008                                   2009                                 2010

     ARPU for retail fixed communication voice services                                                     ARPU for fixed communication services

Figure 51. ARPU for retail fixed communication voice services and for total fixed services in 2006–2010, LTL
Source: RRT



          Since 2005 the duration of calls, originated by public fixed services users (including the fixed
telephony voice services, provided over IP) reduced by 3.1 per cent each year on average. Compared to
2009, in 2010 the duration of fixed telephony calls reduced by 3.7 per cent and reached 1 533.7 million
minutes (see Figure 40).
          The structure of the public fixed telephony market (including the fixed telephony voice services,
provided over the IP), estimated by the duration of calls, includes the calls, terminated on own network,
public mobile networks, other public fixed networks and foreign operators'networks.
          In the structure of traffic, originated on the public fixed networks (including the fixed telephony
voice services, provided over IP) the largest share of all the originated consist of the calls, terminated on
the same network. In 2010 the said share amounted to 90.3 per cent of the market. The duration of fixed
calls covers the duration of local and national long-distance calls and the calls to short numbers (with the
exception of the calls with the pre-selected numbers 10XX). During 2010 the total traffic of fixed telephony
internal calls reduced by 4.4 per cent. The traffic to other networks, originated on public fixed
communication networks changed unevenly (see Figure 52). The duration of calls to other fixed networks
reduced most (by 11.4 per cent), the share of the said traffic within the total structure of calls, originated
on the fixed networks amounted to the non-significant 2 per cent in 2010. Worthy of note is the fact that
the duration of calls to foreign operators’ networks grew by 9.8 per cent in 2010, while during the time
period of 2006 – 2009 the said traffic reduced by 3.4 per cent each year. The traffic of fixed telephone
calls to the mobile networks grew by 5.5 per cent during the year and amounted to 4.3 per cent of all the
calls, originated on fixed networks.
    1 594.6




                                   1 447.3
               1 573.9




                                             1 384.3
   1 638.6


              1 507.7
                         1 504.0




                                                                                               5.5 %                                             - 11.4 %                                          9.8 %
                                                                 94.3
                                                          86.2


                                                                        83.7
                                                                               81.5




                                                                                                    66.2
                                                                                      76.9
                                                                                             62.8




                                                                                                                                                                             52.6
                                                                                                                                                                                    51.5
                                                                                                                                                                                           50.4


                                                                                                                                                                                                         51.8
                                                                                                                                                 35.4




                                                                                                                                                               45.4




                                                                                                                                                                                                  47.2
                                                                                                                                   26.6




                                                                                                                                                        31.4
                                                                                                                            18.9


                                                                                                                                          31.0
                                                                                                                     10.2




                                                                                                                                                                      54.3
                                                                                                              6.9




  Terminated on ow n netw ork                                Terminated on mobile                                 Terminated on other fixed                       Terminated on foreign
                                                           communication netw orks                                communication netw orks                          operators'netw orks

     2004                2005                          2006              2007                  2008                2009                   2010
Figure 52. Structural dynamics of traffic, originated on the public fixed communication market in 2004–2010,
million minutes
Source: RRT

                                                                                                                                                                                                                43
                                                                                                Lithuanian Communications Sector 2010


                        When analyzing the competitive aspects on the public fixed retail voice services market, it merits
evaluating the dynamics of market shares of the incumbent operator TEO LT, AB and other fixed services
providers according to revenues and duration of calls. In 2010 public fixed voice services were provided
by 51 undertakings. 34 undertakings specified that they provided public fixed communication services by
using the IP (including 16, providing the services of Nacionalinis Telekomunikacij                                       Tinklas UAB over
cable television and data communication networks).
                        32.7 per cent of all the revenues for the provision of retail communication voice services and 94.8
per cent of the revenues for the provision of retail fixed communication voice services in 2010 i. e. LTL
280.1 million, were received by TEO LT, AB. However, it should be noted that 95.7 per cent of the
revenues from the provision of retail IP telephony services were received by other providers of fixed
telephony voice services, who also shared the 27.6 per cent of all the revenues, received upon sales of
pre-payment cards, including the revenues for the public payphone calls.
                        In 2010 the subscribers of TEO LT, AB originated 1 468.9 million fixed telephony calls, which
amounted to 95.8 per cent of all the retail fixed telephony voice services and 17.4 per cent of all the fixed
and mobile telephony voice services, provided in 2010. The fixed telephony voice services market share
of TEO LT, AB, amounted to 96.2 per cent in 2009, 96.4 per cent in 2008 and 96.6 per cent in 2007. TEO
LT, AB was also the leader on the market of fixed telephony calls in the own network in 2010 (see Figure
53) and took 99 per cent of the market. Subscribers of other fixed service providers originated 33.9 per
cent of the international calls, which amounted to 19.6 per cent of the traffic of calls, originated by other
providers. Other service providers gained the major share of the fixed telephony calls to other fixed
networks market, which amounted to 64.4 per cent. Compared to 2009, in 2010 other fixed services
providers increased the share of the market of calls to mobile networks by 7.2 percentage points and
amounted to 19.7 per cent of all the calls, originated on fixed networks and terminated on mobile
networks.


                                     2010                            67.7 %                                     32.3 %
                        operators'
                       Terminated
            Terminated on foreign

                        networks




                                     2009                            67.7 %                                     32.3 %
                                     2008                            68.7 %                                     31.3 %
                                     2007                            66.1 %                                     33.9 %
                                     2010          20.9 %                                     79.1 %
             networks
             on fixed




                                     2009             26.0 %                                    74.0 %
                                     2008             26.9 %                                    73.1 %
                                     2007                   35.6 %                                     64.4 %
                                     2010                                         91.9 %                                      8.1 %
 Terminated


  networks
  on other
   mobile




                                     2009                                        89.5 %                                     10.5 %
                                     2008                                        87.4 %                                     12.6 %
                                     2007                                     80.3 %                                     19.7 %
                                     2010                                            99.2 %                                           0.8 %
         Terminated

          network
           on own




                                     2009                                            99.2 %                                           0.8 %
                                     2008                                            99.2 %                                           0.8 %
                                     2007                                            99 .0%                                           1.0 %
         TEO LT, AB                         Other providers

Figure 53. The dynamics of the market shares of providers of public fixed services according to the traffic of
the originated calls in 2007–2010, million minutes
Source: RRT




                                                                                                                                              44
                                                                   Lithuanian Communications Sector 2010

       Until 2010 the number portability service in fixed networks was used 16.8 thousand times. During
2010 the service was provided 2.8 thousand times, in 2009 – 1.5 thousand times. The largest amount of
numbers was transferred to the networks of Mediafon UAB, Eurocom SIP UAB, CSC Telecom UAB, TEO
LT, AB and Nacionalinis Telekomunikacij Tinklas UAB.
        To summarize the conclusion can be made that TEO LT, AB remains the leader in most
segments of the fixed telephony voice services market and alternative fixed services operators attempt to
compete with TEO LT, AB by providing the IP telephony services.




        Summary

   At the end of 2010 voice services were provided by 64 providers, including 13, providing public mobile
   communications voice services and 51 providing public fixed communications voice services.
   The revenues of the voice service market in 2010 decreased by 21.2 per cent, but the originated calls
   traffic was growing by 11.6 per cent.
   At the end of 2010 mobile penetration in Lithuania reached 150.7 subscribers per 100 residents, i. e.
   1.7 percentage point less than in 2009. At the end of 2010 there were 22.6 fixed telephony lines per
   100 residents, i. e. 0.1 percentage points more than in 2009.
   More than one half of the mobile services ARPU, which reached LTL 16.7 came from the revenues
   from mobile voice services (LTL 9.6) whereas the ARPU in the area of fixed services (LTL 34.4) was
   almost equal to the revenues from retail fixed voice services (LTL 33.3).
   When evaluating the competitive aspects of the voice services market, it should be noted that most
   mobile telephony calls (41 per cent) in 2010 were originated by Tele2 UAB and most revenues (38 per
   cent) for the mobile telephony voice calls were received by Omnitel UAB. The fixed telephony voice
   calls, originated by TEO LT, AB in 2010 amounted to 94.8 per cent of all the retail fixed telephony
   voice services and 32.7 per cent of all the provided fixed and mobile telephony voice services
   according to the duration.




                                           2.2.2. SMS and MMS




        Short message service – SMS

       Shortly after the emergence of mobile communication, short message service (SMS) was
considered a supplementary function of a mobile phone. Today SMS has become one of the most
popular services, provided by mobile operators and its functionality changed significantly. Short
messaging is more and more frequently used not only for communication, but also for paying for services,
in public opinion polls and for donation of money. Business enterprises use SMS for reaching their target




                                                                                                      45
                                                                              Lithuanian Communications Sector 2010

markets in a cheaper and a more efficient way. The main reason for SMS becoming more popular can be
the fact that people tend to read and reply to a received SMS right after receiving it.
          In 2010 the short message service remained popular in Lithuania, although the number of SMS,
sent during the year was 8.6 per cent smaller than in 2009 (see Figure 54). The inside network
messages, i. e. those sent and received by the subscribers of the same mobile network, amounted to
91.2 per cent of all the messages, sent during the year. During every month of 2010 one active mobile
subscriber sent 144 short messages on average, i. e. 11 SMS less than in 2009. It is likely that the SMS
messages gave way to the voice calls, which became cheaper and electronic messages, the sending of
which has been becoming more and more popular as the result of the increased demand for
smartphones.




                                                    9 033.6        9 373.3         9 372.6        9 235.5          8 439.7
                       1 387.6      4 939.4
       897.1


       2003            2004              2005        2006           2007            2008           2009             2010

Figure 54. The dynamics of the number of SMS, send on the public mobile communications market in 2003–
2010, million
Source: RRT



          Compared to 2009, during 2010 the revenues, received from the SMS service, reduced by
27.2 per cent and amounted to LTL 95.3 million or to 9.7 per cent of the total mobile service revenues
(see Figure 55). During the time period of 2005-2010 the said share of the structure of the mobile service
revenues underwent insignificant changes, the biggest change occurred in 2010, when the market share
of SMS revenues reduced by 1.9 percentage point in the total structure of the mobile communication
revenues.


 150                                                                                                                       20%
                                 11.4%                               11.1%              11.6%
 100           10.1%                              10.3%                                                     9.7%
                                                                                                                           10%
  50
               119.1             140.9             143.1             151.0              131.0               95.3
   0                                                                                                                       0%
               2005              2006              2007              2008               2009                2010

          SMS revenues              The share in the structure of mobile communication revenues

Figure 55. The revenues, received for the sent SMS, LTL million (w/o the VAT) and the share of the revenues
in the total structure of mobile communication revenues in 2005–2010, per cent
Source: RRT



          Every year from 2007 till 2010 the largest amount of SMS was sent by the subscribers of
Tele2 UAB (see Figure 56). During 2010 the subscribers of Tele2 UAB sent 3.35 billion SMS (8.5 per cent
less than in 2008), which amounted to 39.7 per cent of all the SMS, sent during 2010. Bit Lietuva UAB
ranked the second according to the number of SMS, send from its network (31 per cent). The subscribers
of Bit Lietuva UAB sent 2.62 billion of short messages during 2010, i. e. 4.5 per cent more than in 2009.

                                                                                                                             46
                                                                      Lithuanian Communications Sector 2010

Omnitel UAB was the only operator, whose market share, according to the number of SMS, compared to
2009, in 2010 reduced by 4 percentage points and amounted to 29 per cent and the number of sent SMS
reduced by 19.7 per cent and amounted to 2.45 billion SMS. During the time period of 2006–2010 the
market shares, occupied by Omnitel UAB and Bit Lietuva UAB, according to the number of SMS, each
year reduced by 1.3 and 1.1 percentage points correspondingly, while the average annual growth of the
market share of Tele2 UAB amounted to 2.3 percentage points.



 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              Bit Lietuva UAB       Tele2 UAB        Other service providers

Figure 56. The structure of the markets of sent SMS, according to the number of SMS in 2005–2010, per cent
Source: RRT



         Looking at the average number of SMS sent by a subscriber per month, it may be seen that in
2010, as in 2009, the largest number of short messages was sent by one subscriber of Bit Lietuva UAB,
which is 208 short messages per month on average (by 2 SMS less than in 2009). One subscriber of
Omnitel UAB sent 105 messages per month on average (by 23 SMS less than in 2009). One subscriber
of Tele2 UAB sent 155 SMS per month on average (by 9 SMS less than in 2009).




         Multimedia messaging service – MMS

         The popularity of multimedia messaging service (MMS) in mobile networks, according to the
number of sent MMS, was growing till 2007. Later the market fluctuations were not significant. After two
years of insignificant reduction of the MMS market, i. e. 2008 and 2009, the year 2010 saw a revival of
the MMS market, since in 2010 7.9 per cent more MMS were sent, compared to 2009. However, taking
into consideration the fact that the change of the number of sent MMS is not significant for a third year in
a row, no significant changes on the market are likely in the future.


         During 2010 almost 6 million MMS were sent in total (5.5 million in 2009) (see Figure 57). In 2010
one active mobile service subscriber sent 0.102 MMS per month on average, i. e. each tenth active
subscriber sent one multimedia message per month. In addition, 88.7 per cent of all the senders and
recipients of MMS, sent during 2010, were subscribers of the same mobile network.




                                                                                                         47
                                                                            Lithuanian Communications Sector 2010

 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
 2003     141.5

Figure 57. The number of MMS, sent on the mobile communication market in 2003–2010, thousand
Source: RRT



         During 2010 the largest number of multimedia messages was sent by the subscribers of mobile
operator Tele2 UAB (3.75 million MMS). The market share of the said operator grew by 5.4 percentage
points during the year and amounted to 62.9 per cent. The subscribers of Omnitel UAB sent one fifth of all
the multimedia messages, send during 2010. The share of the multimedia messaging market of Omnitel
UAB, measured according to the number of sent MMS, reduced by 2.8 percentage points and the market
share of Bit Lietuva UAB reduced by 2.9 percentage points from 18.9 per cent (in 2009) down to 16 per
cent (in 2010).
         During 2010 LTL 1.35 million of revenues was received for the sent MMS messages, i. e. 1.2 per
cent more than in 2009 (see Figure 58). Despite the fact that the largest number of multimedia messages
was sent by subscribers of Tele2 UAB, the largest share (47.5 per cent) of the revenues, received from
the provision of MMS services during 2010, was received by Bit Lietuva UAB, whose subscribers sent
the smallest amount of multimedia messages (957 thousand MMS).




                                                1,33                 1,24             1,33            1,35
                         0,96
        0,56

        2005             2006               2007                     2008             2009            2010

Figure 58. The revenues, received for the sent MMS in 2005–2010, LTL million
Source: RRT



         Summary


   Compared to 2009, the revenues, received during 2010 from the sent SMS, reduced by 27.2 per cent
   and amounted to LTL 95.3 million. Totally 8.44 billion SMS was sent during 2010, i. e. 8.6 per cent
   less than in 2009. It is likely that the SMS messages gave way to the voice calls, which became
   cheaper and electronic messages, the sending of which has been becoming more and more popular
   as the result of the increased demand for smartphones.
   The subscribers of Tele2 UAB sent the largest amount, i. e. 39.7 per cent of all the SMS, sent during
   the year, which amounted to 3.4 billion SMS. In 2010 the smallest (29 per cent) share of the SMS
   market was held by Omnitel UAB and the subscribers of Bit Lietuva UAB sent 31 per cent of all the
   SMS
   Each month of 2010 one active mobile service subscriber sent 144 SMS on average. The largest
   average amount of short messages, 208 messages per month, was sent by one subscriber of Bit

                                                                                                              48
                                                                             Lithuanian Communications Sector 2010

      Lietuva UAB. One subscriber of Omnitel UAB sent 105 messages per month on average. One
      subscriber of Tele2 UAB sent 155 SMS per month on average.
      During 2010 almost 6 million MMS was sent in total (5.5 million in 2009), i. e. each tenth active
      subscriber sent 1 multimedia message per month.
      During 2010 the largest number (62.9 per cent) of multimedia messages was sent by the subscribers
      of public mobile operator Tele2 UAB.
      During 2010 LTL 1.35 million of revenues was received from the sent MMS messages, i. e. 1.2 per
      cent more than in 2009. The largest amount of the revenues was received by Bit                  Lietuva UAB
      (47.5 per cent).




                           2.2.3. Internet Access and Other Data Transmission Services




             At present nobody has any doubts that computer and Internet skills are necessary almost in
every area of life – for learning, working, socializing and leisure. The Internet users not only keep
communication or learn the news (according to the data of Statistics Lithuania, those are the main
                                       1
purposes of the Internet use ), but also widely use the Internet for electronic banking, receiving the health
care information, management of transportation systems, education and interfacing equipment, such as
smart grid, wireless heart monitors, emergency services, signaling systems, vehicles telemeasurement,
keeping the inventory and, certainly, for leisure and entertainment. In the opinion of Neelie Kroes, the
member of the European Commission, responsible for the Digital Agenda, the European information and
communication technologies are of vital significance to development of economy and the overall
wellbeing. The technologies and rapid Internet change our life in the same way it was changed by
                                                                                       2
development of power and transportation networks in the previous century . The said changes are also
experienced in Lithuania. Eight years ago fibre communication was used only by several thousand of
Lithuania’s residents and today the said technology is already the prevailing one. The future of electronic
communications, relating to the Internet services, especially those provided over fibre lines is being
predicted by the number of consumers, who receive the Internet services over fibre lines, which is
increasing even in the times of economic recession.




             General market overview

             At the end of 2010 there were 108 Internet services providers in Lithuania, in 2009 there were
109. The total revenues, received by the market players from the provision of the Internet services
                                   i
reached LTL 406.4 million in 2010 and, compared to 2009, reduced by about 1.5 per cent. The revenues
from the provision of retail Internet services amounted to LTL 368 million (90.6 per cent of all the



i
    All revenues, prices and ARPU indicated without the VAT in this Report

                                                                                                               49
                                                                              Lithuanian Communications Sector 2010

revenues, received for provision of Internet access) and, compared to the previous year
(LTL 378.7 million), reduced by 2.8 per cent.



   450                                                                                                                20%
                                                                                                           15.8 %
                                                                                              14.3 %
                                                                  10.5 %        12.3 %                                15%
   300                                               9.8 %
                                       8.9 %
                         7.3 %                                                                                        10%
              6.0 %
   150
                                                                                                                      5%
              120.8      156.7         213.3         264.9        313.0          384.1         412.5       406.8
     0                                                                                                                0%
              2003       2004          2005          2006             2007       2008          2009            2010

         The Internet access services market revenues             The share on the electronic communications market

Figure 59. The revenues of the Internet access services market, LTL million and their share on the electronic
communications market, per cent in 2003–2010
Source: RRT




         TEO LT, AB remained the largest provider of Internet services in 2010. Figure 60, illustrating the
distribution of revenues from retail Internet access services according to the providers, shows that
TEO LT, AB received 41.4 per cent of all the revenues and the indicator, compared to 2009, remained
almost unchanged. The market shares, held by other market participants also remained unchanged or
changed very insignificantly.




                                                 TEO LT, AB                               LRTC
                                                   41.4 %                                 5.0 %


                                                                                         Balticum TV
                                      Others
                                                                                            4.3 %
                                      13.0 %

                                                                                         Dokeda
                                           Omnitel                                        2.8 %
                                           11.0 %
                                                                                           Viginta
                                                                                           2.5 %
                                                                                          Penki Kontinent
                                                                         Baltnetos       Komunikacij Centras
                                                                       Komunikacijos           2.6 %
                                                        Bit Lietuva        3.8 %
                                                           10.0 %

Figure 60. The market shares of the retail Internet service providers according to revenues in 2010, per cent
Source: RRT




         In 2010 the number of the Internet subscribers grew by 10.5 per cent, the number of consumers,
using the Internet access increased by 83.5 thousand and at the end of the year there were
879.6 thousand Internet subscribers in Lithuania. With the increase of the number of subscribers of



                                                                                                                           50
                                                                       Lithuanian Communications Sector 2010

Internet access services, the Internet penetration grew by 3.2 percentage points in 2010 and reached
27.1 per cent (see Figure 61)



   900                                                                                         27.1 %   30
                                                                                     23.9 %
                                                              17.3 %      21.2 %
   600                                                                                                  20
                                                 12.3 %
                                  7.6 %
   300                  5.1 %                                                                           10
              2.5 %
                        173.6     257.4           417.5       581.9       709.8     796.1      879.6
              86.8
     0                                                                                                  0

              2003      2004       2005           2006        2007        2008       2009      2010
          Number of subscribers           Penetration

Figure 61. The number of the Internet access services subscribers, thousand and penetration, per cent in
2003–2010
Source: RRT




         The continuously growing penetration and the small reduction of the Internet access revenues (by
1.5 per cent), compared to the overall drop of the electronic communications market revenues (10.7 per
cent) shows that it is one of the priority directions of development of the electronic communications
market, which attained significant attention even in the times of economic recession for the purpose of
retaining the existing and attracting as more new consumers as possible.
         According to the data of Statistics Lithuania, in 2010 54.9 per cent of all Lithuanian households
                                                          3
had the Internet access at home (54.7 per cent in 2009) and 88 per cent of all the households, which had
the Internet access at home or 48.5 per cent of all households used broadband communication.
Compared to 2009, the use of broadband communication at households grew by 3.1 per cent. The
respondents, who do not use the Internet, specified the absence of need (72.2 per cent), equipment being
too expensive (17.1 per cent) or the Internet service itself being too expensive (16.5 per cent). Therefore,
apart from encouraging of laying of next generation access networks, social education and improvement
of the financial situation of residents are the main areas of encouraging of broadband communication
penetration.
         In 2010 there remained a prominent trend of change of technologies. Fibre communication
remains the main technology, used for provision of the Internet for a second year in a row: at the end of
2009 the number of subscribers who were provided retail broadband communication services over fibre
lines was 254.6 thousand and in the beginning of 2010 there were 307.7 thousand, i. e. during the year
the number of lines increased by 21 per cent, and during the time period of six years it grew 23 times (in
2005 there were only 12.9 thousand). The xDSL technology, which was most widely spread for a long
period of time remained popular however, it continued to give way to other technologies: according to the
data of the end of 2010 the xDSL technology was used by 213.2 thousand subscribers, which is 6 per
cent less than at the end of 2009 (227.8 thousand). The volumes of Internet services, provided over
wireless communication lines, also continued to grow: at the end of 2009 69.5 thousand subscribers
connected to the Internet by using the said method and at the end of 2010 there were 87.5 thousand. The
number of wireless connections grew by 26 per cent during the year. Since 2005 the number of such
subscribers grew almost 5 times. The use of cable television, local area networks (LAN) and leased lines
technologies continued to decrease in 2010.

                                                                                                            51
                                                                                           Lithuanian Communications Sector 2010

                Since the total number of the Internet subscribers continues to grow, the conclusion can be made
that the subscribers actively choose the advanced next generation technologies, allowing for receiving
broadband services of a higher quality and speed rate, not restricting the freedom of movement. The
                                       ii
data, provided in Figure 62 show the ways the use of different broadband technologies changed during
the last six years.



      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       Cable TV networks         W ireless communication lines      Mobile communication        Leased lines


Figure 62. Distribution of subscribers according to the technologies, used for receipt of retail broadband
services (including mobile communication) in Lithuania in 2005–2010, per cent
Source: RRT




                At the end of 2010 the monthly average revenues per user, receiving Internet services (including
                                                                                    iii
all ways of connection), amounted to LTL 36 (LTL 39 in 2009) . The largest amount of revenues from one
subscriber per month was received from a subscriber, connected over leased lines, i. e. LTL 752.5 (LTL
804 in 2009), over wireless lines - LTL 33 (LTL 37 in 2009), over mobile networks (by using a computer) -
LTL 31.5 (LTL 36 in 2009), over xDSL lines - LTL 44 (LTL 46 in 2009), over fibre lines - LTL 34 (LTL 33 in
2009), over local area networks (LAN) - LTL 30 (LTL 39 in 2009), over cable television networks –
LTL 28.5 (LTL 31 in 2009) and over switched lines - LTL 19.5 (LTL 21 in 2009). Although the price of the
Internet communication, provided by all the technologies, charged from the users, was lower than in
2009, the demand for different services changed unevenly. The trends show that the price is not the only
or the main factor, determining the choice of one or another technology.
                At the end of 2010 13 Internet service providers had direct international Internet communication
channels (not via other Internet access providers of Lithuania). The total speed rate of the direct
international Internet communication channels at the end of 2010 reached 93787 Mbps, and, compared to
                                                                        th
2009, grew almost two times. At the end of the 4 quarter of 2010 the largest international channels’
speed rate was provided by TEO LT, AB (48 300 Mbps), Bit Lietuva UAB provided to a certain extent
lower speed rate (22 528 Mbps), the Information Technologies Development Institute of Kaunas
University of Technology ensured 5 120 Mbps speed rate, the subsidiary of Lattelekom SIA –
5 495 Mbps.
                The study of the Internet use by the country’s residents, commissioned by RRT and performed at
the end of 2009 showed that 80 per cent of the respondent household users of the Internet services were
satisfied with the received Internet speed rate. When evaluating the future needs, 21 per cent of the

ii
      The evaluation of technologies usage was performed according to the number of subscribers, using different technologies
iii
      The average revenues per user according to different technologies were evaluated according to the quarterly data.

                                                                                                                                          52
                                                                               Lithuanian Communications Sector 2010

respondents stated that they are going to need a higher Internet speed rate in the nearest future. The
demand for a higher speed rate is also evidenced by the change of distribution of subscribers, connected
to the Internet according to the Internet download speed rate in 2006 – 2010, shown in Figure 63.



 2010 0.7 %        15.1 %                      41.5 %                                             42.6 %

 2009     10.9 %                23.1 %                               39.1 %                                  26.8 %

 2008            22.2 %                          32.5 %                                26.6 %                    18.6 %

 2007                  33.0 %                                   34.9 %                                 32.0 %

 2006                         43.6 %                                          35.4 %                            21.0 %

    from 144 to 512 Kb/s      from 512 Kb/s to 2 Mb/s     from 2 Mb/s to 10 Mb/s *       more than 10 Mb/s

* The percentage of subscribers, provided 2 Mbps and higher Internet download speed rate in 2006 and 2007
Figure 63. Distribution of subscribers, connected to the Internet according to the download speed rate in
2006–2010, per cent
Source: RRT




         Broadband access

         With the change of the consumers’ needs, the technological structure of broadband
communications also underwent significant changes in Lithuania, i. e. it remained favourable for
competition and further market development until the present day. At the commencement of development
of the infrastructure, i. e. with the emergence of the possibility to connect computers by a network, first of
all the existing infrastructure, i. e. telephone lines were used. With the growth of the demand, the DSL
technology was invented, which, until 2009, covered approximately one half of broadband access units
and allowed for browsing the Internet with a relatively high speed rate and talk on the telephone at the
same time. Apart from the conventional technologies, used for provision of broadband communication,
such as xDSL, cable television networks, LAN and fixed wireless lines, in 2007 the 3G and 3.5G mobile
radiocommunication technologies were commenced to be used in Lithuania. The development and
implementation of new technologies were determined by the growing consumers’ demand and the offered
packages of newer and interaction friendly services. The wish to use the new services, requiring a higher
speed rate, determined the need for development of the fibre infrastructure, which rapidly changed the
local copper networks.
         At the end of 2010 99.8 per cent of all the Internet subscribers chose the broadband
                                                                 4
communications technologies (99.7 per cent in 2009) . At the end of 2010 878.4 thousand subscribers
used broadband technologies and, during the year, the number of subscribers grew by 10.7 per cent
(there were 793.9 thousand in 2009). At the end of 2010 the broadband Internet access penetration
reached 27.1 per cent, i. e. it was 3.3 percentage points higher than in 2009 (see Figure 64).




                                                                                                                          53
                                                                         Lithuanian Communications Sector 2010

 900                                                                      21.1 %     23.8 %         27.1 %       30%
                                                                17.1 %
                                                      12.0 %                                                     20%
 600
                                        6.9 %
            1.9 %        3.8 %                                                                                   10%
 300
                                                                                                                 0%
            66.8                        234.1         406.1     576.0      706.0     793.9          878.4
   0                      129.0                                                                                  -10%
            2003          2004          2005          2006      2007       2008       2009          2010

            The number of subscribers             Penetration

Figure 64. The number of subscribers of broadband services (including mobile communication), thousand
and the penetration, per cent in 2003–2010
Source: RRT



         According to the distribution of subscribers by different broadband technologies used, in 2010
77.9 per cent out of the total number of the Internet subscribers used fixed broadband technologies and
22.1 per cent were connected over the mobile broadband network by a computer (in 2009 the proportions
were 79.9 and 20.1 per cent correspondingly).
         The number of subscribers, connected to the Internet over broadband through mobile telephone
networks by using a computer, who paid for the Internet services according to payment plans, applied to
those, using the Internet by a computer, continued to grow. As of 31 December, 2010 the total number of
such subscribers was 194.4 thousand and during the year it increased by 21.4 per cent. In 2010 the
services were provided over the networks of three operators (Omnitel UAB, Bit Lietuva UAB and
Tele2 UAB).
         During 2010 the number of subscribers, using fixed broadband communication technologies grew
by 7.9 per cent and at the end of the year reached 684.1 thousand (633.8 thousand in 2009). Viewing the
fixed and mobile broadband penetration separately, in 2010 the penetration of Internet access, provided
over fixed broadband in Lithuania was 22.1 per cent (19 per cent in 2009 and 17.6 per cent in 2008) and
the penetration of broadband communication, provided over mobile networks reached 6 per cent (4.8 per
cent in 2009 and 3.5 per cent in 2008).
                                                                                                             5
         The data of Broadband Access in the EU Report, prepared by the European Commission , shows
that in the middle of 2010 25 000 fixed broadband communication lines were connected in the EU-27,
which is even less than in 2009 (32 401 lines were connected in 2009, 47 000 in 2008). The said
reduction trend is also observed in Lithuania (see Figure 65).




  2010                            138                              94

  2009                      120                                  121

  2008                                          225                                           130

    Fixed       Mobile


Figure 65. The number of new broadband subscribers, connected during one day in 2008–2010, units
Source: RRT




                                                                                                                      54
                                                                   Lithuanian Communications Sector 2010

          Speaking of the fibre infrastructure in Lithuania, the Rural Area Information Technology
Broadband Network (RAIN), implemented during the time period of 2005 – 2008, must be mentioned. The
fibre infrastructure, developed when implementing the Project reached the settlements, in which more
than 300 000 inhabitants of the country reside. In order to reduce the digital divide between the urban and
rural areas, in December 2009 the second phase of RAIN development was commenced, planned to be
completed before March 2013. It is planned that when implementing the RAIN–2 project 4 500 km of fibre
lines will be laid, and they will reach 770 settlements. Upon completion of the RAIN–2 project, the
possibility to use broadband communication will be provided to 98 per cent of the residents of rural areas
of the country and public sector institutions. The Figure below shows how the infrastructure of the RAIN
                                                                                                     6
and RAIN-2 projects, used for provision of broadband services, is being developed (see Figure 66) .




   Municipality centers
   Subdistricts centers
    Infrastructure, developed when implementing RAIN–2

    Infrastructure, developed when implementing RAIN

    The infrastructure, leased from operators

Figure 66. Coverage of the RAIN network
Source: Vš Pla iajuostis Internetas




          Fixed broadband

          As of 31 December, 2010 the total revenues, received from fixed broadband users, amounted to
LTL 299.9 million, i. e. 4.6 per cent less than in 2009 (LTL 314.4 million). Approximately 50 per cent of the
revenues were received by TEO LT, AB.
          In 2010 the fixed broadband penetration continuously grew: compared to 2009, the growth
amounted to 2.1 percentage points and reached 21.1 per cent (see Figure 67).


                                                                                                          55
                                                                                                                                                                                                                                                                       Lithuanian Communications Sector 2010



      900                                                                                                                                                                                                                                                                                             21.1%   30%
                                                                                                                                                                                                                                                                              17.6%          19.0%
      600                                                                                                                                                                                                                          15.1%                                                                      20%
                                                                                                                                                                                      10.9%
                                                                                                                                             6.9%
      300                                                                                  3.8%                                                                                                                                                                               590.1          633.8    684.1   10%
                                     1.9%                                                                                                                                                                                          507.6
                                                                                           129.1                                                                                       368.7
                                     66.8                                                                                                234.1
                  0                                                                                                                                                                                                                                                                                           0%
                                      2003                                                 2004                                              2005                                       2006                                        2007                                      2008           2009     2010
                                        Number of subscribers                                                                                                                              Penetration

Figure 67. The number of subscribers, using fixed broadband technologies, thousand and the penetration,
per cent in 2003–2010
Source: RRT


                                                                                                                                                                                                                      7
                            According to the data of the Point Topic , the fixed broadband penetration in individual EU
Member States at the end of 2010 shifted from 15.4 to 41.2 per 100 residents (see Figure 68). Although
the broadband penetration in Lithuania has been continuously growing, according to the total fixed
broadband penetration Lithuania is still behind the EU average (according to the data of the European
                                                                                                                                                                                                                                                                                8
Commission, at the end of 2010 the indicator reached 26.7 per cent ).
        40.8 %

                        38.9 %

                                        38.6 %

                                                             38.0 %

                                                                                 34.7 %

                                                                                                  33.8 %

                                                                                                                   33.1 %

                                                                                                                                   32.9 %

                                                                                                                                                   32.9 %

                                                                                                                                                                    32.3 %

                                                                                                                                                                                     30.0 %

                                                                                                                                                                                                       26.7 %

                                                                                                                                                                                                                       26.2 %

                                                                                                                                                                                                                                     25.6 %

                                                                                                                                                                                                                                                    25.3 %

                                                                                                                                                                                                                                                                    24.8 %

                                                                                                                                                                                                                                                                                                             24.5 %

                                                                                                                                                                                                                                                                                                            22.6 %
                                                                                                                                                                                                                                                                                    Czech Republic 20.1 % 22.1 %

                                                                                                                                                                                                                                                                                         Lithuania 19.0 % 21.1 %

                                                                                                                                                                                                                                                                                          Portugal 18.2 % 20.1 %

                                                                                                                                                                                                                                                                                                         18.9 %
                                                                                                                                                                                                                                                                                          Romania 13.6 % %

                                                                                                                                                                                                                                                                                                      15.0 %

                                                                                                                                                                                                                                                                                                     13.9 %
                                                                                                                                                                                                                                                                                                      15.4
 Denmark 39.6 %

                  Malta 33.7 %

                                 Estonia 31.6 %

                                                  The Netherlands 36.3 %

                                                                           Sweden 35.0 %

                                                                                           Finland 31.4 %

                                                                                                            Belgium 30.9 %

                                                                                                                             France 31.5 %

                                                                                                                                             The UK 30.8 %

                                                                                                                                                             Germany 30.4 %

                                                                                                                                                                              Slovenia 27.6 %

                                                                                                                                                                                                Ireland 25.4 %

                                                                                                                                                                                                                 Latvia 19.6 %

                                                                                                                                                                                                                                 EU 24.8 %

                                                                                                                                                                                                                                              Spain 22.6 %

                                                                                                                                                                                                                                                             Austria 23.0 %

                                                                                                                                                                                                                                                                              Italy 22.8 %
                                                                                                                                                                                                                                                                                                   18.9 %




                                                                                                                                                                                                                                                                                          Hungary 16.8 %



                                                                                                                                                                                                                                                                                                   12.4 %

                                                                                                                                                                                                                                                                                                   12.4 %
                                                                                                                                                                                                                                                                                          Slovakia
                                                                                                                                                                                                                                                                                           Greece




                  2009                              2010                                                                                                                                                                                                                                    Poland

Figure 68. Fixed broadband penetration per 100 residents in the EU Member States in 2009–2010
Source: Point Topic, European Commission



                            When observing the changes of the technologies, used for provision of fixed broadband access in
Lithuania, the following trends, prevailing for already five years, may be distinguished:
                                                                                                                                                                                                                                                                                                 9
                           According to the data of the European Commission of July 2010 , xDSL remains the
dominating Internet service provision technology in Europe and, on the average, covers 78 per cent
of all the subscribers of the Internet services, provided by fixed broadband (see Figure 69). Among the
EU Member States the technology is the most popular in Greece, where almost all the Internet
communication is provided by using the xDSL technologies and the least popular in Romania (28 per
cent).




                                                                                                                                                                                                                                                                                                                    56
                                                                                                                                                                                              Lithuanian Communications Sector 2010




                                                                                                                                                                                                                                                                                          100 %
                                                                                                                                                                                                                                                                                  98 %
                                                                                                                                                                                                                                                                         95 %
                                                                                                                                                                                                                                                                92 %
                                                                                                                                                                                                                                                      89 %
                                                                                                                                                                                                                                         82 %
                                                                                                                                                                                                                                 80 %
                                                                                                                                                                                                                        79 %
                                                                                                                                                                                                                78 %
                                                                                                                                                                                                      75 %
                                                                                                                                                                                            71 %
                                                                                                                                                                                  69 %
                                                                                                                                                                       60 %
                                                                                                                                           59 %
                                                                                                                                                     59 %
                                                                                                             55 %
                                                                                                                       55 %

                                                                                                                                55 %
                                                                                                    51 %
                                                                                            50 %
                                                                                 45 %
                                                              43 %
                                                                        43 %
                                                    42 %
                                   38 %
                       33 %
            32 %
  28 %




                                                                        Latvia

                                                                                 Slovakia
                                                                                            Malta




                                                                                                                       Sweden




                                                                                                                                                                       Slovenia




                                                                                                                                                                                                                                         Luxembourg
                                   Czech Republic
                                                    Hungary




                                                                                                                                                                                                                                                                Cyprus



                                                                                                                                                                                                                                                                                  Italy
            Bulgaria
                       Lithuania




                                                              Estonia




                                                                                                    Poland




                                                                                                                                                                                  Austria
                                                                                                                                                                                            Ireland
                                                                                                                                                                                                      Finland
                                                                                                                                                                                                                EU 27


                                                                                                                                                                                                                                 Spain




                                                                                                                                                                                                                                                                         France



                                                                                                                                                                                                                                                                                          Greece
                                                                                                                                Portugal




                                                                                                                                                                                                                        The UK
                                                                                                                                                     The Netherlands




                                                                                                                                                                                                                                                      Germany
  Romania




                                                                                                             Belgium




                                                                                                                                           Denmark
Figure 69. The share of xDSL lines within the fixed broadband infrastructure as of July 2010, per cent
Source: European Commission



                   The share of Internet access broadband over local area networks (LAN) and cable
television networks (CTV) is decreasing. The Internet services, provided over LAN lines at the end of
2010 amounted to 3.6 per cent of all the services, provided over fixed communication, i. e. 24 815 LAN
lines were used (27 487 in 2009, i. e. during the year the number of lines reduced by 9.7 per cent).
Compared to 2005, the number of lines reduced 1.9 times. The share of subscribers, receiving the
Internet services over cable television networks, within the fixed broadband market structure reduced
from 21.2 per cent at the end of 2005 down to 7.1 per cent at the end of 2010. Among the main reasons
for reduction of the Internet access, provided by cable television networks is the reconstruction of cable
television networks, performed by the cable television operators, where the coaxial cable lines are
replaced by fibre lines, which provide the possibility to both browse the Internet and view high definition
television.
                   Broadband over wireless communication lines gain more popularity. The number of
subscribers, who received the Internet services over wireless access lines, grew by 4.1 percentage
points: from 7.6 per cent at the end of 2005 up to 13 per cent at the end of 2010. The growth mostly
resulted from the increase of the number of subscribers, connected to the Internet by using the WiMax
technology, which is not considered the classical fixed broadband technology. First of all, the WiMax
technology is intended for provision of broadband services by substituting and replacing the already
existing WiFi technology. The broader and more efficiently used frequency channels allow for reaching
higher speed rates and operating distances than in case of the WiFi technology by providing high quality
                                                                                                                        10
services both to close and remote users . In 2010 141.6 times more subscribers connected to the
Internet over wireless lines by using the WiMax technology comparing to 2008 and 2.5 times more than
in 2009, and the total number of subscribers, connected to the Internet over wireless lines, compared to
2009, in 2010 grew by 27.6 per cent (3.6 times compared to 2006) (see Figure 70).




                                                                                                                                                                                                                                                                                                   57
                                                                                  Lithuanian Communications Sector 2010

  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 technology         WiFi technology      Other wireless technologies

* The wireless technologies are not distinguished
Figure 70. The number of subscribers, connected to the Internet over wireless communication lines (with the
exception of public mobile telecommunication networks) in 2006–2010
Source: RRT


           It is likely that in the future the popularity of the services, based by wireless technologies is going
to increase, which is shown by the rapidly growing demand for smartphones, tablet computers and other
mobile communication equipment. The said trend determines not only the advancement of mobile
communication technologies and their convenience to consumers but also the practical benefit, since
mobile communication spares both time and money.
           Fibre lines became the dominating infrastructure for the provision of Internet services in
Lithuania. Although the xDSL remains the most widely spread broadband access technology in Europe
with 100 million lines, the market share of the said technology has been reducing since the faster fibre
architecture and cables are commenced to be used. Lithuania is no exception: in 2009 fibre lines
(hereinafter referred to as FTTx) became the main broadband communication technology and at the end
of 2010 45 per cent of all the fixed broadband subscribers used fibre lines for connecting to the Internet
and the share of fibre lines within the fixed broadband infrastructure grew by 4.8 percentage points
compared to the previous year.
           In 2010 the Internet services in Lithuania were provided both by the Fibre to the Home (FTTH)
and Fibre to the Building (FTTB) technologies. At the end of 2010 there were 307.7 thousand fibre lines in
Lithuania. From 2005 till 2010 the number of FTTx lines grew 23.8 times and in 2010 the growth
amounted to 21 per cent (see Figure 71).



   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     FTTH and FTTB

Figure 71. Distribution of the number of local fibre lines according to the FTTH and FTTB in 2005–2010, units
Source: RRT




                                                                                                                           58
                                                                                                                                     Lithuanian Communications Sector 2010

                  The structure of investors into fibre lines also changed during several years. In 2005 almost all
the fibre lines were laid by small operators. As shown in Figure 72, TEO LT, AB also started its active
development activities on the market during the last three years.




                                                                                                                                                          75 %                           66 %
                  91 %                                                                  84 %                             80 %
                                                       88 %

                                                                                                                                                          25 %                           34 %
                   9%                                  12 %                             16 %                             20 %
         2005                                  2006                                     2007                             2008                             2009                           2010
     TEO LT, AB                     Other service providers

Figure 72. The distribution of the subscribers, connected to the Internet over fibre lines according to the
providers of retail broadband services in 2005 – 2010, per cent
Source: RRT



                  Lithuania, being among the leading states in terms of development of broadband networks, is
also noted in the global context. In 2010 Lithuania was more than once mentioned in international
sources as the country, which is among the ones most rapidly developing the next generation fibre
access lines not only in Europe, but in the whole world.
                  According to the data of IDATE, in 2010 Lithuania, according to the coverage ranked the second
in Europe: 78 per cent of households had the possibility to connect to the Internet over fibre lines.
                                                                                                                                                                                                       11
Andorra ranked the first one, in which all the households (100 per cent) had such a possibility . The
intensive implementation of new technologies provides Lithuania the possibility to take the leading
position in the EU according to the fibre penetration.
       22.6 %


                    13.6 %


                                13.6 %


                                           12.3 %




                                                                                                                                                                        1.7 %
                                                                                                                                                              1.8 %




                                                                                                                                                                                              1.6 %
                                                                                                                                                                                   1.7 %
 21.0 %


                 12.9 %


                             12.0 %


                                         11.2 %




                                                                                                                                                                        1.6 %




                                                                                                                                                                                              1.6 %
                                                                                                                                                                                   1.3 %




                                                                                                                                                                                                         1.3 %
                                                                                                                                                              1.5 %
                                                        9.2 %
                                                       8.7 %


                                                                   5.7 %
                                                                   7.5 %

                                                                             7.8 %
                                                                             7.1 %
                                                                                        2.5 %
                                                                                        6.9 %

                                                                                                  5.3 %
                                                                                                  6.2 %
                                                                                                             5.0 %
                                                                                                             5.8 %
                                                                                                                         1.4 %
                                                                                                                         4.1 %

                                                                                                                                     3.2 %
                                                                                                                                     3.4 %

                                                                                                                                                3.0 %
                                                                                                                                                3.2 %




                                                                                                                                                                                                        0.0 %
                               Norway
                   Sweden




                                           Slovenia


                                                        Slovakia




                                                                                         Latvia




                                                                                                                                                                                               Italy


                                                                                                                                                                                                            Turkey
   Lithuania




                                                                    Russia




                                                                                                   Estonia


                                                                                                              Bulgaria




                                                                                                                                      Finland




                                                                                                                                                               France
                                                                                                                          Portugal




                                                                                                                                                Netherlands




                                                                                                                                                                                   Republic
                                                                                                                                                                         Romania
                                                                              Denmark




                                                                                                                                                                                    Czech
                                                                                                                                                    The




                June 2010                             December 2010

Figure 73. The share of households, having broadband Internet access over fibre lines in the European
countries, per cent
Source: FTTH Council Europe, IDATE



                  At the end of 2010 Lithuania, upon reaching almost 23 per cent fibre penetration, surpassed
Sweden (14 per cent), Norway (14 per cent) and Slovenia (12 per cent). On the worldwide level Lithuania
is ranked the sixth according to the said indicator: it is surpassed by such countries as South Korea,
Japan, Hong Kong, the United Arab Emirates and Taiwan. According to the fibre lines penetration growth
                                         nd
in Europe, in the 2                           quarter of 2010 Lithuania ranked the third (2 per cent) after Latvia (4.4 per cent) and
Portugal (2.2 per cent) and among the Eastern European states Lithuania, according to the growth of the
number of households, connected to the Internet via fibre lines ranked the second (33 per cent) after


                                                                                                                                                                                                                     59
                                                                      Lithuanian Communications Sector 2010

Latvia, in which the indicator reached 61 per cent12. However one should not forget that higher growth
rates are displayed by the states, where the fibre communication is only in the initial phase of
development. For instance, the Great Britain and Germany are at the bottom of the list according to the
number of Internet consumers, using fibre communication.
        Such differences between the European states can be explained by a greater dynamism of the
Eastern Europe and more favourable environment for implementation of technologies, determined by the
previous absent well-developed infrastructure and the wish to invest into new more advanced
technologies, as well as the labor force and technology implementation costs, low in the view of the
                                                                         13
Western European investors, which encourage the investment flows .
                                                        14
        According to the data of Frost & Sullivan , the fibre data communication networks are most
rapidly developed in the countries, where the alternative wire data communication technologies (for
instance, xDSL), due to different reasons, were implemented slower or failed to become popular.
According to Frost & Sullivan, Lithuania is, without any doubt, the leader in the area of implementation of
FTTH and FTTB in the European Union and the strong domination of fibre networks in the Baltic States,
for the most part, is encouraged by the large Scandinavian telecommunications operators, entrenched on
the local markets. The latest solutions, implemented in the Scandinavian countries are also introduced in
Lithuania, Latvia and Estonia. In Lithuania almost all the new wire networks are laid by using fibre cables.
Compared to the trends in other EU Member States, the telecommunications companies, operating in
Lithuania are certain that the traditional wire (copper) networks are obsolete and not suitable for
satisfaction of today’s, not to mention the future needs of consumers. In addition, it is added that the
investments into the FTTH and FTTB technologies are going to become the main advantage of the fixed
broadband providers when competing with mobile broadband communication.
        The rapidly developing next generation technologies also change the consumers’ needs and
possibilities, which are revealed by analyzing the priorities when choosing the Internet speed rate. In
2010 the speed rate, higher than 10 Mbps became the most popular choice of consumers in Lithuania for
the first time (41.7 per cent chose the said speed rate, in 2009 it was chosen by 25.8 per cent of
consumers, in 2008 by 14.6 per cent). The Internet services of the speed rate from 2 to 10 Mbps, which
were predominant for a long period of time, already rank the second: at the end of 2010 the said speed
rate was used by 40.9 per cent of subscribers (37.7 per cent in 2009).




                       From 2 Mbps to 10 Mbps
                               40.9 %                                  10 Mbps and more
                                                                            41.8 %




                       From 512 Kbps to 2
                             Mbps
                            14.9 %                                 Up to 144 Kbps
                                                                        0.9 %
                                            From 144 to 512 Kbps
                                                   1.5 %

Figure 74. Distribution of fixed broadband subscribers according to the download speed rate at the end of
2010, per cent
Source: RRT




                                                                                                         60
                                                                              Lithuanian Communications Sector 2010

        In 2010 the use of the Internet of the speed rate of from 144 to 512 Kbps decreased the most, i.
e. approximately 10 times, both according to the number of real subscribers and the percentage of the
Internet access, provided by all the technologies. In addition the use of the speed rate up to 144 Kbps
reduced significantly – it is used only by a symbolic number of users, i. e. 0.9 per cent. The number of
consumers, using the average speed rate (from 512 Kbps to 2 Mbps) also decreased.



              10 Mbs and more                                            41.7 %
                                                       25.8 %
     from 2 Mbps to 10 Mbps                                          40.9 %
                                                                  37.7 %
     from 512 Kbps to 2 Mbps                15 %
                                                    22.3 %
                                   1.5 %
  from 144 Kbps to 512 Kbps            10.5 %
                                  0.9 %
               up to 144 Kbps   3.8 %

       2009             2010

Figure 75. Distribution of fixed broadband subscribers according to the data communication download speed
rate in 2009–2010, per cent
Source: RRT



        The possibility to choose the 10 Mbps speed rate Internet was provided to the consumers by the
rapidly laid fibre lines. The xDSL lines were mostly used for receiving the speed rate of from 2 to 10 Mbps
and from 144 to 512 Kbps (see Figure 76). The Internet of the lowest speed rate was mostly provided by
cable television networks.




            10 Mbps and more    4.8 %                                         89.6%                                            2.1 %

     from 2 Mbps to 10 Mbps                             61.2 %                                15.1 %         5.4 %    13.2 %   4.9 %

    from 512 Kbps to 2 Mbps                32.4 %                        28.9 %                     22.2 %             11.7 % 4.2 %

  from 144 Kbps to 512 Kbps                           55.8 %                               17.6 %       6.4 %        11.5 %    7.9 %

              up to 144 Kbps 2.2 %      19.9 %                                    69.4 %                                       5.1 %

     xDSL         Wireless communication lines       Cable TV networks        FTTx         LAN

Figure 76. The distribution of fixed broadband subscribers, connected to the Internet by using different
technologies according to the data communication download speed rate at the end of 2010, per cent
Source: RRT


        The modern technologies provide the possibility not to limit to the 10 Mbps speed rate. The figure
shows how the Internet speed rate, chosen by consumers, changed during the time period of 2008–2010.




                                                                                                                                61
                                                                                       Lithuanian Communications Sector 2010


       23.5 %
                               25.2 %
                                                     30.9 %
                                                                              37.7 %
       33.3 %
                               30.7 %                                                                39.6 %                 40.8 %
                                                     25.8 %
                                                                              22.3 %
                                                                                                     14.8 %
                                                                                                                            14.9 %

       QII 2008            QIV 2008                  QII 2009            QIV 2009                    QII 2010              QIV 2010
        up to 144 Kb/s                           from 144 to 512 Kb/s                        from 512 Kb/s to 2 Mb/s
        from 2 Mb/s to 10 Mb/s                   from 10 Mb/s to 30 Mb/s                     from 30 Mb/s to 100 Mb/s
        more than 100 Mb/s
Figure 77. The distribution of the subscribers, connected to the Internet by using broadband fixed
communication technologies according to the speed rate in 2008–2010, per cent
Source: RRT




         Mobile broadband

         As of 31 December, 2010 the total revenues from mobile broadband activities amounted to LTL
984.1 thousand and, compared to 2009, decreased by 12.6 per cent, among which the largest share, i. e.
36.5 per cent, was received by Omnitel UAB.
         When looking at the number of subscribers, connected to the Internet over the mobile broadband
networks, it can be seen that from the end of 2006 till the end of 2010 the number grew about 6 times and
at the end of 2010 reached 194.4 thousand (see Figure 78). Compared to 2009 the number grew by
21.4 per cent. The said subscribers connected to the mobile Internet by using a computer and paid for the
Internet services according to the mobile Internet payment plans. In 2010 the services were provided over
the networks of all the three mobile operators, i. e. Omnitel UAB, Bit Lietuva UAB and Tele2 UAB.



 200                                                                                                                                    8%
                                                                                                                            6,0 %
 150                                                                                             4,8 %        5,3 %                     6%
                                                                  3,5 %          4,4 %
 100                                 2,0 %          2,4 %                                                                               4%
         1,1 %         1,4 %
  50                                                                                                                                    2%
                       48,1             68,4         80,2         115,9          146,0           160,1        174,7         194,4
          37,4
   0                                                                                                                                    0%
       2nd half of   1st half of   2nd half of    1st half of   2nd half of    1st half of    2nd half of   1st half of   2nd half of
         2006          2007          2007           2008          2008           2009           2009          2010          2010
          Number of subscribers                  Penetration

Figure 78. The number of subscribers, using mobile broadband technologies, thousand and penetration, per
cent in 2006–2010
Source: RRT



         At the end of 2010 56.7 per cent of mobile broadband subscribers used the services, provided by
Omnitel UAB (59.5 per cent in 2009), 41.5 per cent – by Bit Lietuva UAB (40.1 per cent in 2009) and 1.8
per cent used the services, provided by Tele2 UAB (0.4 per cent in 2009).
         It is important to mention the fact that three years ago the number of subscribers of broadband
communication, provided over mobile networks, in the total structure of broadband subscribers was less
than one tenth and in 2010 such subscribers already amounted to 22 per cent of all the broadband
subscribers of Lithuania (see Figure 79). The growth of the number of subscribers was influenced by the
attractiveness of the services to the consumer and the increase of sales of smartphones and laptop
computers with mobile Internet modems, which created the conditions for use of mobile data. Thus the


                                                                                                                                         62
                                                                            Lithuanian Communications Sector 2010

development of base stations of Universal Mobile Telecommunications System (UMTS) is continued. In
2010 Lithuanian mobile operators registered 182 UMTS base stations (and signed 9 stations out) and 174
GSM/DCS mobile radiocommunication base stations (and signed 25 stations out). Before 31 December,
2010 totally 2986 GSM/DCS mobile radiocommunication base stations and 1076 UMTS base stations
were registered totally (see Table 5).


                                                                      Table 5. The dynamics of mobile communication
                                                                      base stations in 2009–2010, units
       2010           22%                      78%
                                                                                           2009    2010    The change
       2009          20 %                     80 %

                                                                        GSM / DSC
       2008         16 %                     84 %                                          2 837   2 986    + 5.2 %
                                                                         stations

       2007       12 %                      88 %                          UMTS
                                                                                           903     1 076    + 19.2 %
                                                                         stations
       2006      9%                        91 %

                                                                          Totally          3 740   4 062    + 8.6 %
            Mobile technologies          Fixed technologies
                                                                      Source: RRT
Figure 79. Distribution of broadband subscribers according
to the technologies used in 2006–2010, per cent
Source: RRT


                In 2010 all the three mobile network operators performed the development of the Third
Generation (3G) networks (all the operators received licenses to use radio frequencies in the
corresponding radio frequency band at the end of 2006). The mobile network operators developed 3G
and 3.5G networks, increased the speed rates of the mobile Internet services, also undertook the tests of
the next generation 4G (LTE) communications
                Referring to the data of the Broadband Access in the EU Report, prepared by the European
Commission in November 2009 and in November 2010, the average mobile broadband Internet
                                  iv                                                                  15
penetration in the EU-26 in July 2009 was 4.2 per cent (2.8 per cent in January 2009) . At the end of
                                                              16
2010 the EU average grew up to 6.1 per cent . The mobile broadband penetration in Lithuania grew from
4.4 to 5.2 per cent.
                                                      16.7 %
                                                     14.0 %
                                                     13.4 %
                              Portugal 10.8 % 12.1 %
                                Ireland 8.3 % 10.8 %
                                   Italy 4.7 % 8.5 %
                                                7.5 %
                                                6.9 %
                                               6.5 %
                                     EU 4.2 % %
                                              5.4 %
                              Slovakia 4.5 % %
                             Lithuania 4.4 % %
                             Germany 3.2 4.4 %
                              Hungary 3.8 4.2 %
                                France 1.93.7 %
                                            3.6 %
                                            3.3 %
                                            3.1 %




                                               6.1
                                  Malta 1.8 %%
                              Bulgaria 1.0 %%

                              Belgium 1.6 %%




                              Slovenia 2.5 %%
                               Greece 1.6 %%
                   2.0 %




                                              5.4
                                              5.2




                                         12.6 %

                                Austria 13.8 %
                   1.5 %
         Cyprus 0.5 %




                                         1.4 %

                                         2.1 %


                               Czech 3.2 %

                                             %

                                             %

                                             %



                                         1.5 %




                                         4.7 %

                                         4.9 %

                                         3.2 %




                             Denmark 6.3 %
                 1.3 %




                                           2.6
                 0.8 %




                                           2.3

                                           2.3




                                           2.3
                                           2.1
          Latvia

     Luxembourg




                              Sweden
                               Estonia




                                Poland



                                  Spain
                               The UK
                              Republic




                           Netherlands
                             Romania




                               The




                July 2009              July 2010

Note: Only the special data communication cards or modems were included when calculating
Figure 80. Mobile broadband penetration as of July 2009 and July 2010, per cent

iv
     Except Finland

                                                                                                                   63
                                                                        Lithuanian Communications Sector 2010
Source: European Commission




         Broadband quality parameters

         According to the data of Netindex, testing the whole world’s Internet speed rate and other
network parameters, received in cooperation with SpeedTest.Net at the end of 2010, Lithuania ranked the
third among the world’s countries according to the Internet data communication download speed rate
                                                                                              17.
among households and the second according to the data upload speed rate (see Table 6)


                                                                                                      st
Table 6. The top ten of the countries according to the upload and download speed rate in the 1 quarter of
2011
                                                                                                    Data upload
 Position              Country        Data download speed      Position           Country
                                                                                                      speed
 1                South Korea               31.9 Mbps          1              South Korea            22.5 Mbps
 2                     Sweden               27.3 Mbps          2                  Lithuania          18.1 Mbps

 3                 Lithuania                25.3 Mbps          3                   Latvia            13.7 Mbps
 4                     Romania              23.9 Mbps          4                  Moldavia           11.2 Mbps
 5              The Netherlands             23.6 Mbps          5                  Romania            11.2 Mbps
 6                      Latvia              22.4 Mbps          6              Switzerland            11.1 Mbps
 7                     Moldavia             19.2 Mbps          7                  Bulgaria           9.6 Mbps
 8                Switzerland               18.5 Mbps          8                   Japan             8.7 Mbps
 9                     Bulgaria             17.6 Mbps          9                  Denmark            8.6 Mbps
 10                    Belgium              17.4 Mbps          10                  Ukraine           7.4 Mbps
Source: Netindex.com



         The same company evaluated the way the promise index of the subscribers, who conclude
Internet service provision contracts is satisfied in different countries. Lithuania is among the world’s top
ten countries, best satisfying the promise index, it ranks the fifth.
         The rapid implementation of new technologies in Lithuania was also noticed by the Economist
Group, a world renowned analyst group. In the Digital Economy Rankings Report, published by the
                                                                                                       18
Economist Group in cooperation with the specialists of the IBM Institute for Business Value , Kaunas
was included into the top five of the world’s cities, having the highest quality of broadband
communication, together with three Japanese cities (Yokohama, Nagoya and Soporo) and Seoul, the
capital of South Korea.
                                                                             19
         In addition, in the report of the Global Broadband Quality Study , performed by Oxford University
for several years in a row and analyzing the countries’ readiness to satisfy the consumers’ expectations to
receive high quality innovative services in the future, i. e. the countries’ being “ready for tomorrow” (see
Figure 81), in 2010, as in 2009, Lithuania was ranked together with the world’s most advanced countries,
such as South Korea, Japan and Sweden and fell among 14 world’s countries, which reached the highest
level of readiness for tomorrow. The results of the study are based by 40 million broadband Internet
speed rate quality tests, performed in 72 world’s countries.




                                                                                                                  64
                                                                               Lithuanian Communications Sector 2010
 Ready for tomorrow       Comfortably       enjoying    Meeting the needs of       Behind        today’s   Basic
                          today’s applications          today’s applications       application threshold   applications

 Korea                    Switzerland                                              Qatar
 Japan                    The USA                       Spain                      China                   Peru
 Latvia                   Czech Republic                Australia                  Argentina               Nigeria
 Sweden                   Hungary                       Ireland                    Bahrain                 Kenya
 Finland                  Belgium                       Malta                      Mexico                  Angola
 Bulgaria                 France                        New Zealand                Tunisia
 Germany                  Slovakia                      Italy                      Costa Rica
 Hong Kong                Norway                        Turkey                     South Africa
 Romania                  Estonia                       Chile                      Malaysia
 Lithuania                Luxembourg                    Israel                     Pakistan
 The Netherlands          Austria                       Ghana                      India
 Portugal                 Singapore                     Thailand                   Morocco
 Denmark                  Poland                        Saudi Arabia               Columbia
 Iceland                  Slovenia                      Cyprus                     Philippines
                          Russia                        Brazil                     Indonesia
                          Greece                        United Arab Emirates       Jordan
                          Ukraine                                                  Egypt
                          Canada                                                   Viet Nam
                          Taiwan                                                   Algeria




Figure 81. Countries’ readiness to satisfy consumers’ expectations to receive high quality innovative services
in the future
Source: Saïd Business School, Oxford University, 2010




         Other data transmission services (excluding Internet)

         The present part of the report provides an overview of the data transmission services (with the
exclusion of the Internet access services), provided by using VPN, IP, Frame Relay, Ethernet, Ethernet
VLAN and other technologies. At the end of 2010 the services were provided by 15 service providers, in
2009 there were 14.
         Compared to 2009, in 2010 the total revenues from data transmission services reduced by
1.8 per cent and amounted to LTL 64.9 million (LTL 66.9 million in 2009) (see Figure 82). After the
sudden reduction of the number of subscribers, who were provided retail data transmission services in
2009, in 2010 the number grew by 6.1 per cent and at the end of the year reached 13.9 thousand (see
Figure 82). The fact that the number of subscribers grew, although the total retail data transmission
revenues reduced, shows the services’ price decrease..



    25                                                                63.5               66.9              64.9       80
                                                    53.7
    20                           45.4                                                                                 60
               37.5
    15
                                                                                                                      40
    10                                                                20.7
                                                    12.5                                 13.1              13.9       20
     5         5.4                7.3
     0                                                                                                                0
             2005               2006              2007                2008              2009               2010
          Number of subscribers              Revenues

Figure 82. The revenues from retail data transmission services, LTL million and the number of subscribers,
provided retail data transmission services, thousand in 2005–2010
Source: RRT




                                                                                                                           65
                                                                                    Lithuanian Communications Sector 2010

            In 2009 the main players on the data communication market remained the same: TEO LT, AB,
                                                                                                                                           v
Bit Lietuva UAB, Omnitel UAB and Infostrukt ra V and another market player – Lietuvos Energija AB
has expanded. In 2010 the data communication services retail market share of TEO, AB, according to
revenues, grew by 5.3 percentage points (see Figure 83), although the company‘s revenues dropped
from LTL 39.3 million (in 2009) down to LTL 36.1 million. The corresponding market share of Infostrukt ra
V grew by 4.1 during the year, the said enterprise‘s revenues also grew from LTL 9.9 million to LTL 12.3
million. The market shares of Omnitel UAB and Bit Lietuva UAB reduced correspondingly by 3.2 and 1.7
percentage points and amounted to LTL 4.6 million and LTL 5.2 million. The latter two operators were
surpassed by Lietuvos Energija AB, whose market share, for the first time, experienced significant growth
and reached 9.2 per cent or almost LTL 6 million.




    2010                                 64.1 %                                 7.0 % 8.0 %             18.9 %          9.2 %      2.2 %

    2009                                 58.8 %                                    11.2 %      9.7 %         14.8 %        5.4 %

    2008                             52.7 %                                  14.7 %          11.2 %      11.2 %         10.3 %

    2007                           49.3 %                                 15.9 %            13.2 %      8.8 %         12.8 %

    2006                           49.1 %                                16.1 %             14.9 %         7.7 %       12.2 %

    2005                          47.2 %                                  20.1 %               15.7 %        5.5 %      11.5 %
       TEO LT, AB      Omnitel UAB       Bit Lietuva UAB      Infostrukt ra V      Lietuvos Energija UAB      Others

* since the 4th quarter of 2010 the services are provided by Data Logistics Center UAB, a subsidiary of Lietuvos Energija AB

Figure 83. The structure of the retail market of the data communication services according to the revenues in
2005–2010, per cent
Source: RRT




            Summary

       In 2010 the total market players’ revenues from provision of Internet services reached LTL 406.4
       million and, compared to 2009, reduced only by 1.5 per cent and amounted to 15.8 per cent of all the
       electronic     communications          services’    revenues.      The revenues, received                 from     other     data
       communication services, dropped by 3 per cent.
       In 2010 the total Internet revenues from the subscribers, using fixed broadband technologies,
       amounted to LTL 299.9 million, i. e. 4.6 per cent less than in 2009.
       In 2010 the number of Internet service subscribers grew by 10.5 per cent and, at the end of the year,
       reached 879.6 thousand. At the end of 2010 878.4 thousand subscribers used broadband
       technologies, i. e. 10.7 per cent more than in 2009 (793.9 thousand). At the end of 2010 the
       broadband penetration reached 27.1 per cent, i. e. 3.3 percentage points more than in 2009.
      In 2010 77.9 per cent of the total number of Internet subscribers (i. e. 684.1 thousand) used fixed
      broadband technologies for receipt of the Internet services and 22.1 per cent (i. e. 194.4 thousand
      subscribers) connected over mobile networks by using a computer. The penetration of Internet access,
      provided over fixed broadband communication in Lithuania was 21.1 per cent and the penetration of
      broadband communication, provided over mobile telecommunication networks reached 6 per cent.

v
    Since the 4th quarter of 2010 the services are provided by Data Logistics Center UAB, a subsidiary of Lietuvos Energija AB

                                                                                                                                      66
                                                                                Lithuanian Communications Sector 2010

     At the end of 2010 307.7 thousand subscribers, i. e. 21 per cent more than in 2009, received retail
     broadband services over fibre lines, which amounted to 35 per cent of all the broadband lines.
    The volumes of Internet services, provided over wireless lines continued to grow: at the end of 2010
    87.5 thousand subscribers connected to the Internet by using the said method, the number of wireless
    connections grew by 26 per cent during the year.
    The most popular, i. e. higher than 10 Mbps speed rate was chosen by 41.7 per cent of consumers.
    The use of the speed rate of from 144 to 512 Kbps reduced the most, i. e. approximately 10 times, in
    terms of both real number of subscribers and the percentage of the Internet access, provided by using
    all the technologies.
    At the end of 2010 Lithuania, according to the data download speed rate at households was ranked
    the second among the world’s countries and the third according to the upload speed rate.
    During 2010 the revenues, received from provision of other data transmission services, dropped by
    1.8 per cent and amounted to LTL 64.9 million.
    During the year the number of subscribers, to whom other data transmission services are provided,
    grew by 6 per cent and, at the end of 2010, reached 13.9 thousand.




1
  Information Technologies in Lithuania 2010 // Statistics Lithuania, Vilnius 2010.
2
  http://ec.europa.eu/information_society/newsroom/cf/item-detail-dae.cfm?item_id=5789
3
  Information Technologies in Lithuania 2010 // Statistics Lithuania, Vilnius 2010.
4
  The subscribers, receiving the Internet services at public mobile telecommunications terminal equipment (WAP) are not included.
5
   European Commission Communications Committee Working document: Broadband access in the EU: situation at 1 July 2010,
Brussels,            21st            November,           2010,         DG           INFSO/C4,        COCOM10-29             FINAL.
http://ec.europa.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=6502
6
  http://www.placiajuostis.lt/index.php?option=com_content&view=article&id=11&Itemid=11
7
  Broadband statistics for December 2009, December of 2010, prepared by Point Topic.
8
   European Commission Communications Committee Working document: Broadband access in the EU: situation at 1 July 2010,
Brussels, 21st November, 2010, DG INFSO/C4, COCOM10-29 FINAL.
9
  http://ec.europa.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=6502
10
    http://www.erdves.lt/?lt=1156419444
11
   IDATE,           FTTH/B            Panorama,          European         Union         (36)      at       December           2010,
http://www.ftthcouncil.eu/documents/studies/Market_Data_December_2010.pdf
12
  IDATE,            FTTH/B            Panorama,          European         Union         (36)      at       December           2010,
http://www.ftthcouncil.eu/documents/studies/Market_Data_December_2010.pdf
13
           EIU,      http://viewswire.eiu.com/index.asp?layout=ib3Article&pubtypeid=1162462501&article_id=1937885978&rf=0         ;
http://iq.lt/technologijos/lietuva-sviesolaidzio-lydere-europoje/
14
  http://www.eurocomms.com/features/7437-limited-access-to-incumbents-infrastructure-drives-ftthb-subscriber-growth-in-cee-report
15
    European Commission, Communications Committee Working document: Broadband Access in the EU: situation at 1July 2009,
Brussels,             18            November            2009,         DG            INFSO/C4,        COCOM09-29              FINAL
http://ec.europa.eu/information_society/eeurope/i2010/docs/interinstitutional/cocom_broadband_july09.pdf
16
    European Commission, Communications Committee Working document: Broadband Access in the EU: situation at 1July 2009,
Brussels,             18            November            2009,         DG            INFSO/C4,        COCOM09-29              FINAL
http://ec.europa.eu/information_society/eeurope/i2010/docs/interinstitutional/cocom_broadband_july09.pdf
17
    http://netindex.com/download/; http://netindex.com/upload/.
18
    Digital Economy Rankings 2010. Beyond e-readiness. A report from the Economist Intelligence Group.
http://graphics.eiu.com/upload/EIU_Digital_economy_rankings_2010_FINAL_WEB.pdf
19
    http://www.sbs.ox.ac.uk/Documents/broadband%20study/Third%20annual%20broadband%20study%202010.pdf




                                                                                                                               67
                                                                      Lithuanian Communications Sector 2010

                                          2.2.4. Television Services




        General market overview


        Although the ways or receipt of information have undergone significant changes – more and more
information is received by employing modern means of electronic communications, such as fixed and
mobile Internet, the significance of television in people’s everyday life remains enormous. The new
technologies (HD, 3D, mobile television and the new technology television screens) allow for enjoying “a
                                                             1
sharp and vivid image of the cinema theatre quality” . The new digital equipment opens a broader
programs spectrum than the presently existing one.
        Today one can watch his favourite team playing or a favourite band’s music video not only on a
TV or a PC screen, but also on mobile devices, i. e. tablet computers and smartphones. In addition, one
can use the said possibilities in any place around the world, in case the Internet access is available at the
location.
        In 2010 both free-of-charge and pay-TV services were provided in Lithuania. The pay-TV
services were provided over cable television, multichannel multipoint distribution system (MMDS),
Internet Protocol Television (IPTV), digital terrestrial television (DVB-T), satellite television networks and
the free-of-charge television was provided over analogue and digital terrestrial television networks. It is
                                    s
worth to note that in 2010 Lithuania' residents could view 14 free-of-charge (not coded) digital television
programs: 12 of them were broadcasted by Lithuanian broadcasters and 2 were re-broadcasted by
TEO LT, AB.
        It is not easy to obtain accurate data on the number of free-of-charge television users, since
usually one household has more than one TV set and receives television services by more than one way.
RRT collects the data only about pay-TV subscribers (the data of 2009-2010 are provided in Table 7).
Assuming that one television subscriber is equal to one household, it can be stated that at the end of
                             s
2010 53 per cent of Lithuania' households, i. e. the same number as in 2009, used free-of-charge
television services and correspondingly 47 per cent of households used pay-TV services (other than the
analogue terrestrial television or free-of-charge digital terrestrial television services).
                                                          s
        The Usage of the Digital Television by the Country' Residents Survey, commissioned by RRT in
December 2010, showed that 45 per cent of respondents used free-of-charge television services, 52 per
                                                                                              2
cent paid for the television services and 3 per cent had both free-of-charge and pay-TV , which means
that more than half of households of the country paid for television services, i. e. for the desired content
and its diversity. According to the data of RRT, at the end of 2010 there totally were 638.3 thousand
subscribers (i. e. approximately 47.2 per cent of all the households), using pay-TV services (including
those, provided over cable TV and MMDS networks, IPTV, DVB-T and satellite television).




                                                                                                           68
                                                                                  Lithuanian Communications Sector 2010

Table 7. The number of subscribers of pay-TV services and its change, per cent, during 2009–2010
                                                                                  2009                  2010             The change
                                                                                                                         compared to
                                                                                                                        2009, per cent
 The number of subscribers of cable TV:                                          399 102             404 976                +1.5
 - analogue television subscribers                                               372 468             361 629                  -3
 - digital television subscribers                                                26 634              43 347                 +38.6
 The number of subscribers of MMDS:                                              21 148              20 005                 +5.7
 - digital television subscribers                                                21 148              20 005                 +5.7
 The number of subscribers of DVB-T                                              46 712              63 695                 +26.7
 The number of subscribers of satellite television                               74 541              78 873                 +5.5
 The number of subscribers of IPTV                                               57 839              70 681                 +18.2
 Total:                                                                          599 342             638 230                +6.1
Source: RRT



          When observing the number of subscribers of the pay-TV services and its change during 2010
(see Table 7), is can be seen that the number of subscribers of DVB-T increased the most, i. e. by
26.7 per cent. Compared to 2009, the DVB-T grew by 2.2 percentage points in the total pay-TV services
structure and, compared to 2008 – almost twice (see Figure 84). The number of subscribers of IPTV
ranked the second according to the growth rate and, during the year, grew by 18.2 per cent. In 2010 the
share of subscribers of IPTV in the total structure of pay-TV services grew by 1.4 percentage point. In
2010 the number of subscribers of MMDS grew insignificantly, during the year it grew by 5.7 per cent, by
0.4 percentage point in the total structure of television services, satellite television grew in a similar way, i.
e. by 5.5 per cent and in the total structure it remained unchanged and amounted to 12.4 per cent. The
biggest changes were observed in the area of distribution of cable television subscribers, although the
total number of subscribers grew by 1.5 per cent in 2010 (that was influenced by the significant increase
of the number of subscribers of digital cable TV – during the year it grew by 38.6 per cent), in the total
structure of pay-TV services the number of subscribers of CTV reduced by 3.1 percentage points,
compared to 2009, and by 18.2 percentage points, compared to 2008.



 2010                                       63.5 %                                       3.1 % 10.0 %          12.4 %          11.1 %


 2009                                         66.6 %                                        3.5 % 7.8 %          12.4 %            9.7 %


 2008                                                   81.7 %                                                   4.5 % 5.4 %        8.4 %


     Cable television         MMDS        DVB – T        Satellite television*     IPTV



*Note. RRT commenced collecting the data on subscribers of satellite television since the 3rd quarter of 2009.
Figure 84. Distribution of subscribers of pay-TV according to the transmission platforms in 2008–2010, per
cent
Source: RRT



          According to the data of RRT, compared to 2009, in 2010 the pay-TV revenues, received from
cable television, MMDS, IPTV, DVB-T and satellite television service provision, grew by 25.1 per cent, i.
e. from LTL 127.2 million up to LTL 159.1 million. Figure 85 presents the distribution of revenues,
received from the subscribers for the television services during 2010 according to the transmission

                                                                                                                                      69
                                                                          Lithuanian Communications Sector 2010

platforms. The distribution of revenues is same as distribution of subscribers: the largest part of the
revenues was earned by cable television services, satellite television took the second position and the
third position was taken by IPTV.
          The largest share of pay-TV revenues (24.5 per cent) was earned by Viasat AS (provider of
satellite television services). TEO LT, AB (the company provides both IPTV and DVB-T services) took the
second position (24.3 per cent) and the third position was occupied by Mikrovisatos TV UAB (provider of
analogue and digital cable television and MMDS television services) (7.3 per cent .



                                                     MMDS
                                                     3.7 %
                                         IPTV
                                        12.2 %

                                   DVB-T
                                   10.6 %


                                                                                           Cable TV
                                                                                            49.4 %


                              Satellite TV
                                24.0 %


Figure 85. Distribution of pay-TV revenues according to the transmission platforms in 2010, per cent
Source: RRT



          Distribution of pay-TV subscribers in Lithuania corresponds to the trends in world pay-TV
                                                                          3
markets. According to the data of consulting company IDATE , cable television (both analogue and
                                                                             s
digital) still remains to be the main form of television in most of the world' countries. However, as the
cable TV market becomes more and more saturated, a larger growth of both the number of subscribers of
and the revenues from IPTV and digital terrestrial television is forecasted in the future. Satellite television
takes the second position in terms of use, IPTV occupies the third and digital terrestrial television services
– the fourth position in the pay-TV segment (see Figure 86).



                                                                                     5.9
  2013*                                      489.2                                                   174.9          60.6
                                                                      4.6
 2009**                                440.1                                         122.3                   28.8
                                                                    4.4
   2008                              426.7                                     107.3             19.3
                                                                4.0
   2007                              416.9                                    95.8            11.8
                                                              3.7
   2006                             404.4                             84.7             5.4

       Cable TV       DVB-T           Satellite TV   IPTV

* forecast
** estimate
Figure 86. Distribution of subscribers of pay-TV in the world according to the used type of television in 2006–
2013, million households
Source: IDATE



          As regards the pay-TV development trends, it is also worth noting that bundled offers, in which
television services are also included, are getting more and more popular around the world. Bundled offers

                                                                                                                    70
                                                                    Lithuanian Communications Sector 2010

are two or more service packages, provided by one operator or service provider for one price. The price is
stated in one bill.
         At the end of 2010 bundled offers were provided by 15 service providers in Lithuania: 12 offered
Double-play and 4 enterprises - Triple-play bundled offers (3 companies provided both Double and Triple
play bundled offers). In 2010, as in 2009, double-play bundled offers were mostly used. During the year
the number of subscribers, using Double-play bundled offers, grew by 28.5 per cent and reached 98 382.
As shown in Table 8, the largest share (61.3 per cent) of the users of Double-play bundled offers were the
subscribers, using the bundled offer "Broadband and television". The number of such subscribers was
60.4 thousand, however, compared to 2009, it reduced by 9.1 per cent. The number of subscribers, using
the bundled offer "Mobile telephony and Internet" grew almost four times, i. e. up to 38.1 thousand
(similar growth was observed in 2009). In the total share of Double-play bundled offers users these users
amounted to almost 38.7 per cent, i. e. 25 percentage points more than in 2009. Such rapid and
continuous growth of this offer could be explained by the increased demand for smartphones and tablet
computers, which encourages the use of mobile data. The number of subscribers of the bundled offer
"Fixed telephony and television" was the smallest – 27 per cent, during the year the indicator reduced
almost twice. Although in 2010 the number of users of Double-play bundled offers increased, the usage of
Triple-play bundled offer "Fixed telephony, broadband and television" reduced 2.5 times (down to
856 subscribers).



Table 8. Subscribers, using bundled offers in 2009–2010
                                                           2009              2010             The change,
                                                                                            compared to 2009
     The total number of subscribers, using Double-play   76 535             98 382             +28.5 %
                      bundled offers
                - Fixed telephony and broadband            154                143                -7.1 %
                   - Fixed telephony and TV                 70                 27                -61.4 %

                      - Broadband and TV                  66 376             60 369              -9.1 %

               - Mobile telephony and broadband            9 935             38 087            +3.8 times

Source: RRT



         Analogue television


         Analogue terrestrial television. The results of the Usage of the Digital Television by the
       s
Country' Residents Survey, commissioned by RRT in December 2010, showed that the analogue
terrestrial television is used by 45 per cent of respondents and the said form of television was most widely
spread in district municipalities. Residents of the following municipalities mostly used the said form of
television: Panev žys district (79 per cent), Kupiškis district (76 per cent), Rietavas district (75 per cent),
Šilut district (74 per cent), Alytus district (74 per cent), Mol tai district (74 per cent) and Taurag district
(70 per cent). The said type of television was less popular in the largest cities (Vilnius – 16 per cent,
Kaunas – 21 per cent, Klaip da – 14 per cent, Šiauliai – 19 per cent) and municipalities of Visaginas
(16 per cent) and Akmen district (20 per cent).
         Analogue cable television. 49 undertakings were providing analogue cable television services
at the end of 2010. During the year the number of analogue cable television subscribers went down by
3 per cent and reached 361.6 thousand (372.5 thousand in 2009). The revenues of the analogue cable
                                                                                                               71
                                                                              Lithuanian Communications Sector 2010

television market also reduced by LTL 1 million and reached LTL 71.2 million. The largest number of
subscribers belonged to Vinita UAB (18 per cent analogue cable television subscribers) and Balticum TV
UAB (13 per cent) (see Figure 87).



                                                        Vinita UAB AVVA UAB
                                    Viginta UAB Group      18 %      3%     Kabeliniai ryši tinklai
                                            8%                                      UAB
                                                                                     9%
                                                                                 Lignita UAB
                                        Telerena UAB                                  2%
                                             4%
                                                                                Rygveda UAB
                                Mikrovisatos TV UAB                                 5%
                                        9%
                                                                                Others
                                                Init UAB
                                                                                21 %
                                                   8%
                                                      Balticum TV UAB
                                                             13 %



Figure 87. The structure of the analogue cable television market according to the number of subscribers in
2010, per cent
Source: RRT




        Digital television


         According to Paragraph 28 of the Model of Implementation of Digital Television in Lithuania,
approved by the Government of the Republic of Lithuania by Resolution No. 1492 of 25 November, 2004
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.
         According to the data of RRT, in the beginning of the year the analogue terrestrial television was
chosen by 46.6 per cent of subscribers, at the end of the year – by 41.3 per cent, i. e. the number of
subscribers reduced by 5.3 per cent. The number of subscribers of digital terrestrial television grew by 8.7
per cent: from 10 per cent in the beginning of the year to 18.7 per cent at the end of the year. The number
of subscribers of cable television reduced insignificantly – from 40.2 per cent to 37.9 per cent. The
numbers of subscribers of satellite television and IPTV grew by 1.2 and 0.9 per cent correspondingly.



                                                                                                           41,3%
                                                                                                                   46,6%
   Digital terrestrial television                                   18,7%
                                                      10,0%                                           37,9%
                                                                                                          40,2%
            Satellite television                 8,3%
                                               7,1%
                                   1,2%
                                 0,3%
                          Other  0,3%
                                0,1%
    2010 January          2010 December
Figure 88. Reception of television programs in 2010, per cent
Source: RRT




                                                                                                                    72
                                                                    Lithuanian Communications Sector 2010

         The survey showed that the oldest participants of the survey, the respondents with lower
education and representatives of rural areas and those receiving less income are most reluctant to refuse
the analogue terrestrial television. The data of the survey also provide the possibility to make the
conclusion that the analogue reception of TV signal is less frequently used in the major cities than on the
remaining territory of Lithuania. The smallest number of people using analogue terrestrial (air) way for
receiption of the signal is in the major cities: 14 per cent in Klaip da, 15.5 per cent in Vilnius and 19 per
cent in Šiauliai.
         The survey was also aimed at learning the degree of the society’s awareness and readiness for
transition to the digital terrestrial television. The data of the survey show that the date of switch-over from
the analogue terrestrial television at the end of 2010 was known by 74 per cent of respondents (in 2009
only 41 per cent knew the date). 94 per cent of the respondents knew that in order to receive digital signal
one needs to have a special television set or a Set-top-box. Both urban and rural residents were equally
well informed.
         26 per cent of respondents could pay up to LTL 50 for set-top-box purchasing; the said amount
was more frequently mentioned by people with lower education, the lowest income group members,
unemployed persons, retired persons, students, pupils and housewives. 19 per cent could dedicate from
LTL 51 to LTL 100 for purchasing the additional equipment, 14 per cent – from LTL 101 to LTL 200. The
respondents with the higher education, those with the highest income, medium and top level managers
and small business persons often stated that they already own a television set, able to receive a digital
signal or a set-top-box.
         The results of the survey showed that the residents wish to receive the information on the
transition to the digital television by television (specified by 65 per cent of respondents), on the Internet
(44 per cent), in the press (34 per cent) and on the radio (15 per cent).
         According to the data of RRT, the use of digital pay-TV grew by 21.9 per cent during 2010 and at
the end of the year 276.7 thousand subscribers used the television (226.9 thousand in 2009), which
amounted to 43.3 per cent of all the subscribers of pay-TV or 20.5 per cent of all households. The most
popular form of digital pay-TV remains satellite television, which was used by 28.5 per cent of all
subscribers, IPTV is not far behind – it is used by 25.6 per cent of subscribers. Figure 89 provides the
data on the ways the choice of viewers of digital pay-TV changed during the time period of the last two
years.


                                                                        Cable TV
                    Cable TV
                                                                         15.7 %
                     11.7 %                                                                    IPTV
                                      IPTV
           MMDS                      25.5 %                                                   25.6 %
           9.3 %                                                MMDS
                                                                7.2 %




           DVB-T
           20.6 %
                                    Satellite TV                     DVB-T
                                      32.9 %                                               Satellite TV
                                                                     23.0 %                  28.5 %
 2009 m.                                                  2010 m.



Figure 89. The distribution of digital pay-TV subscribers according to the transmission platforms, per cent


                                                                                                              73
                                                                                    Lithuanian Communications Sector 2010
Source: RRT



            Evaluation of the digital pay-TV market according to the revenues shows that in 2010 the
revenues from the provision of digital pay-TV services reached LTL 87.8 million, which amounted to 55
                                                  4
per cent of the total pay-TV revenues . Compared to 2009, in 2010 the revenues grew by 60 per cent
(LTL 55 million was received in 2009, which amounted to 43.3 per cent of the total pay-TV revenues). The
distribution of the revenues, received from digital pay-TV activities according to the operators is presented
below.




                                                      TEO LT, AB,    Viasat AS
                                                        40.8 %        43.5 %




                                                   Others                      Balticum TV UAB
                                                   7.4 %                             3.9 %
                                                            Mikrovisatos TV UAB
                                                                    4.4 %

Figure 90. The distribution of revenues from the digital pay-TV activities according to the operators in 2010,
per cent
Source: RRT



            Digital terrestrial television. At the end of 2010 the DVB-T pay-TV services by using the
MPEG-4 standard were provided in Lithuania by TEO LT, AB and Balticum TV UAB.
            At the end of 2010 63.7 thousand subscribers used the said type of television (46.7 thousand in
2009). During the year the number of subscribers grew by 36.4 per cent. At the end of the year the
revenues from the DVB-T activities reached LTL 16.95 million and, during the year they grew two times
(from LTL 8.6 million in 2009). 99.9 per cent of revenues were received by TEO LT, AB.




                                                                                                        58 722      63 695
                                                                   46 712         50 611     53 973
                      34 301         38 019        40 659
       26 410

      QIV 2008       QI 2009        QII 2009      QIII 2009      QIV 2009         QI 2010   QII 2010   QIII 2010   QIV 2010

Figure 91. The dynamics of the number of DVB-T pay-TV subscribers in 2008-2010
Source: RRT



            Digital cable and multichannel multipoint distribution system television. At the end of 2010
the digital television services over cable television and MMDS networks were provided by 18 service
providers (18 provided the services over cable television networks and 3 over MMDS networksi). The
digital cable television was broadcasted by using the DVB-C standard and for MMDS broadcasting the


i
    Three providers offered both digital cable television and MMDS services.

                                                                                                                        74
                                                                            Lithuanian Communications Sector 2010

operators chose DVB-C and DVB-T standards. The MMDS, provided by wireless technologies, which is
an alternative to cable television, was available to the residents of the major cities of Lithuania. It is worth
to note that the MMDS operators broadcast their programs only in the digital format.
           At the end of 2010 the number of subscribers of digital cable television reached 43.4 thousand
(26.6 thousand in 2009) and grew by 63 per cent during the year, the number of subscribers of the digital
MMDS services reduced to a certain extent and at the end of the year reached 20 thousand
(21.1 thousand in 2009) (see Figure 92).




                                                                                                      38 739   43 347
                                                                          26 634   29 319   32 322
                                         19 965     21 391       22 766
                                18 745
  13 129      14 155   16 359

                                19 246   21 285     21 353       21 222   21 148   20915    20 525    19 904   20 005
   418        15 093   15 382

 QI 2008     QII 2008 QIII 2008 QIV 2008 Q1 2009 QII 2009 QIII 2009 QIV 2009 QI 2010        QII 2010 QIII 2010 QIV 2010

    Digital MMDS subscribers      Digital cable TV subscribers

Figure 92. The number of digital cable television and digital MMDS subscribers in 2008–2010
Source: RRT



           The growing number of digital cable television subscribers has been accompanied by the revenue
growth which in 2010, compared to 2009, grew by 53.3 per cent and reached LTL 7.4 million (in 2009 the
revenues amounted to LTL 4.8 million). In 2010 the revenues from the digital MMDS activities reached
LTL 5.9 million and, compared to the revenues, received in 2009, they dropped by 13 per cent (in 2009
the amount of revenues was LTL 6.8 million).
           Satellite television. In terms of the number of subscribers satellite television is the leading form
of digital TV on the Lithuanian digital pay-TV market. It is transmitted from the Sirius-4 satellite, covering
the entire territory of the Lithuania. Viasat AS is the only enterprise in Lithuania, which broadcasts and
rebroadcasts satellite television in digital format. At the end of 2010 the company had approximately
78.9 thousand subscribers, i. e. since the end of 2009 their number grew by 6 per cent.
           Among the main advantages of satellite television is the significantly larger capacity for
broadcasting HDTV channels. Although the HDTV, which is becoming more and more popular in
Lithuania can be transmitted over cable, IPTV and DVB-T networks, the transmission of HDTV over the
said networks is still very limited (i. e. relatively smaller number of HDTV channels can be transmitted)
due to the limited number of radio frequencies/channels, necessary in order to be able to transmit HDTV
television. Viasat AS rebroadcasts three HDTV channels.
           IPTV. At the end of 2010 8 companies, including TEO LT, AB, Penki Kontinent Komunikacijos
Centras UAB, Transteleservis UAB, Miesto tinklas UAB, Alpha Komunikacijos-1 UAB, Horda UAB,
Kavamedia UAB and Dokeda UAB provided IPTV services in Lithuania. IPTV services were available to
the residents of the major cities and districts of Lithuania. The said television is special not only because it
provides the viewer with a lot of possibilities to enjoy top quality image, but also because it allows to
receive a lot of supplementary services, such as virtual video rental, virtual cinema theatre, personal
channels, personal video recorder, TOD, which provides the possibility to record the desired show,


                                                                                                                        75
                                                                           Lithuanian Communications Sector 2010

electronic mail, the possibility to control TV set by a smartphone or a tablet computer and many other
possibilities.
                                                    5
           According to the IDATE evaluation , IPTV, differently from the cable and satellite television,
together with the terrestrial digital television, has big possibilities and potential to develop in all the world’s
regions (including Europe) and this fact should become prominent during the time period of the coming
several years in terms of both the received revenues and the number of subscribers. The operators make
big efforts in order to find the optimum way of laying and using the fibre, since the FFTx lines allow for
integrating the Internet and television services into one service package.
           During the last year the number of IPTV users in Lithuania grew by 22 per cent, i. e. from
57.8 thousand at the end of 2009 to 70.7 thousand at the end of 2010 (see Figure 93). The largest share
(96 per cent) of the IPTV subscribers belongs to TEO LT, AB and 2.2 per cent – to
Penki Kontinent Komunikacij Centras UAB. The growing number of IPTV subscribers in 2010 resulted
in the increase of revenues, received from the provision of IPTV services, which grew from LTL
15.1 million in 2009 to LTL 19.4 per cent in 2010, i. e. by 28.5 per cent.




                                                                                                           65 898       70 735
                                                                           57 839       60 327   62 737
                                          46 170        49 151    52 583
                                 41 104
              28 267    33 218
  23 253

  QI 2008     QII 2008 QIII 2008 QIV 2008 QI 2009       QII 2009 QIII 2009 QIV 2009 QI 2010      QII 2010 QIII 2010 QIV 2010

Figure 93. The number of subscribers of IPTV television in 2008–2010
Source: RRT




           High definition television

           In Lithuania high definition television (HDTV) can be transmitted over DVB-T, cable, IPTV and
satellite networks.
           In 2010 TEO LT, AB, which has the largest number of DVB-T and IPTV subscribers in Lithuania,
offered HDTV services to the subscribers of both types of television services. The subscribers of DVB-T
were offered three HDTV channels: "National Geographic Channel HD", "Discovery HD Showcase“ and
“Eurosport HD“. Starting from the middle of December 2010 the channels can be viewed by subscribers
                                       s
of both Vilnius and Kaunas. The company' IPTV subscribers were able to view four HDTV channels:
                                                                                                                    6
"National Geographic Channel HD", "Discovery HD Showcase", “Eurosport HD" and “History HD“ . TEO
LT, AB acquired the right to rebroadcast the said channels over DVB-T and IPTV networks after winning
the tenders for rebroadcasting of HDTV programs, organized by the Radio and Television Commission of
Lithuania.
           Viasat AB, the company, providing television services over satellite, broadcasted "National
Geographic Channel HD", "MTVN HD" and “Viasat Premier League HD” programs over a HDTV channel.
                                                                                    7
           According to the data, provided in publicly accessible sources , other television service providers
offered their viewers the already mentioned and other HDTV programs, such as "I-Concerts HD", "Bebe



                                                                                                                           76
                                                                               Lithuanian Communications Sector 2010

TV HD", "Rush HD", "HD1", "MyZen TV HD", "Luxe TV HD", "Arte HD", "ZDF HD", "Astra Promo HD",
"Anixe HD", "Mezzo Live HD", etc.




         Summary

    Summarizing the development of television market in Lithuania, it needs to be said that in 2010 the
    growth of the number of pay-TV subscribers (including the digital television subscribers) reached
    6.5 per cent and reached 638.3 thousand.
    47 per cent of respondents used free-of-charge television services, 4 per cent had both free-of-charge
    and pay-TV.
    The most popular pay-TV form at the end of 2010 was cable television, which was chosen by 63 per
    cent of all pay-TV subscribers, satellite television took the second position (12.4 per cent) and the third
    position was held by IPTV television (11 per cent).
    With the growth of the number of pay-TV subscribers, the revenues, received by the providers of pay-
    TV services also increased: compared to 2009, in 2010 the revenues grew by one fourth, i. e. from
    LTL 127.2 million to LTL 159.1 million.
    Viasat AS (satellite television provider) had the largest share of pay-TV revenues, i. e. 24.5 per cent,
    TEO LT, AB (the company, providing both IPTV and DVB-T services) ranked the second (24.3 per
    cent) and Mikrovisatos TV UAB (provider of analogue, digital cable and MMDS television) was the
    third (7.3 per cent).
    The residents become more aware of the switching off of analogue television on 29 October, 2012: at
    the end of 2010 the information was known to 74 per cent of residents, 94 per cent of respondents
    were aware of the need to have a special television set of a digital television set-top-box in order to be
    able to receive the digital signal.
    During 2010 the use of digital pay-TV grew by 21.9 per cent and at the end of the year the television
    was used by 276.7 thousand subscribers, which amounted to 43.3 per cent of all the pay-TV
    subscribers or 20.5 per cent of all households.




1
  http://www.technologijos.lt/n/pranesimai_spaudai/straipsnis-7392/straipsnis?name=straipsnis-7392&l=1&p=1
2
  http://rrt.lt/lt/apzvalgos-ir-ataskaitos/rrt-uzsakymu-atliktu-ph6r.html
3
 IDATE, TV 2010. Markets & Trends. Facts & Figures. http://www.idate.org/en/Free-download/Free-download_73_.html
4
  In 2010 the total revenues from television activities amounted to LTL 159.1 million
5
  IDATE, TV 2010. Markets & Trends. Facts & Figures.
6
  http://www.teo.lt/teo_pasaulio_straipsniai/2011-01/2507
7
    The data of television providers: http://www.gala.lt/skaitmenine/kanalai/kanalai_40; http://www.viasat.lt/tv-kanalai/national-
geography/; http://www.balticum.lt/?lt=1253600888, http://web.sugardas.lt/index.php?cid=135213




                                                                                                                              77
                                                                     Lithuanian Communications Sector 2010


                    2.3. Wholesale Electronic Communications Services


                                          2.3.1. Wholesale Access


        Wholesale access is the service, where the undertaking, having its own electronic
communications network, provides another undertaking with the possibility to use its network
infrastructure (for instance: local lines, dark fibres, ducts) for the provision of retail electronic
communications services. The importance of the services for development of broadband services was
also stressed by the European Commission in its Recommendation of 20 September, 2010 on regulated
access to Next Generation Access Networks by establishing the objective of encouraging infrastructure
based competition and development of the Next Generation Access (hereinafter referred to as NGA)
networks, i. e. parallel access networks. Only one service of access to the local line was provided on the
territory of the Republic of Lithuania in 2010, i. e. the fully and partially unbundled access to the local
metallic twisted pair line, however the services of fully unbundled access to the local fibre line or fully
unbundled access to the local shielded or unshielded twisted pair line were not provided.
        The growth of the revenues of the said market and the provided access was observed since
2005, when the data on wholesale access were commenced to be collected. The number of points of
unbundled access grew three times (292 points of access were provided in 2006, 862 in 2010), the
revenues from provision of wholesale Internet access also grew almost three times (in 2005 the revenues
reached LTL 13 million and in 2010 – already LTL 38.3 million), the number of provided fibres grew
almost five times (489 fibres were provided in 2006, 2369 in 2010). The only reduction, as regards the
wholesale access service, is observed in the area of provision of xDSL access services. Taking into
consideration the technological competition, determining the development of the operators’ own access
networks, based by other technologies and the overall reduction of the number of xDSL lines the number
of wholesale xDSL points of access, provided during the time period of 2005–2010, reduced more than in
half.



        Unbundled access

        The fully and partially unbundled access to the local metallic twisted pair line in the Republic of
Lithuania can be provided by the operators, controlling the access network, composed of local metallic
twisted pair lines. Only one operator, i. e. TEO LT, AB, has a well developed, in terms of geographical
coverage, local metallic twisted pair lines network, covering the entire territory of the Republic of
Lithuania. By Order No. 1V-818 of the Director of RRT of 17 July, 2006, TEO LT, AB was recognized as
the undertaking with significant power on the wholesale unbundled access to the metallic twisted pair line
market in 2006 and was the only undertaking in the Republic of Lithuania, obliged to provide the service
of fully and partially unbundled access to the local metallic twisted pair line to other operators.
        TEO LT, AB provided the wholesale services of fully and partially unbundled access to the local
metallic twisted pair lines to two service providers, i. e. Baltnetos Komunikacijos UAB and
Infostrukt ra V . At the end of 2010 the total number of provided points of access was 862, including


                                                                                                        78
                                                                                 Lithuanian Communications Sector 2010

695 fully and 167 partially unbundled points of access to the local metallic twisted pair line (see
Figure 94).


 QIV 2010                                               695                                                   167
 QIII 2010                                             685                                                   159
 QII 2010                                             661                                                 150
  QI 2010           143                                         539
      2009         121                                    494
     2008*                               478
    2007*                              443
     2006*                    292
     The number of points of fully unbundled access, provided by TEO LT, AB
     The number of points of partially unbundled access, provided by TEO LT, AB
* In 2006-2008 TEO LT, AB included the number of points of partially unbundled access into the number of provided points of fully
unbundled access to the local line.
Figure 94. The number of points of fully and partially unbundled access to the local metallic twisted pair lines,
provided by TEO LT, AB in 2006–2010, units
Source: RRT



          As shown by Figure 94, until 2009 TEO LT, AB provided fully unbundled access to local metallic
twisted pair lines, including partially unbundled access. After the said services were separated starting
from 2009, the company provided four times more points of partially unbundled access compared to the
points of fully unbundled access. In 2010 the structure changed again, i. e. in the 2nd quarter of 2010 the
number of points of fully unbundled access grew (from 143 to 661) and the number of points of partially
unbundled access reduced 3.6 times (from 539 to 150), which could be explained by the campaign on
encouraging sales of fully unbundled access service to wholesale customers, executed by TEO LT, AB in
February 20101. Compared to 2009, in 2010 the total number of points of unbundled access to local
metallic twisted pair lines grew by 40.1 per cent.
          In September 2010 TEO LT, AB also renewed its reference offer and reduced the monthly
charges for the fully unbundled access to the local metallic twisted paid line and the charges for partially
                      2
unbundled access (see Table 9). The number of provided points of access, which increased by 40.1 per
cent in 2010 shows the flexibility of demand in terms of the price, however, despite that, no new service
users were attracted.


Table 9. The standard prices of the unbundled access to the local metallic twisted pair line, provided by
TEO LT, AB in 2010, LTL w/o the VAT
                      The charge for
                                              Implementation         Monthly
    Name of           investigation of                                               Disconnection        The charge for the visit
                                              charge, LTL w/o      charge, w/o
    service        technical feasibilities,                                       charge, w/o the VAT        and diagnostics
                                                 the VAT            the VAT
                     LTL w/o the VAT
 From 01 April, 2009 to 27 September, 2010
 Fully                    215.22                  202.56               24                 65.41                    25.42
 unbundled
 access
 Partially                215.22                   204.6              18.84               65.41                    25.42
 unbundled
 access
 From 28 September, 2010
 Fully                       50                     150                18                 65.41           The charge for the visit
 unbundled                                                                                                and diagnostics (fault
 access                                                                                                   elimination) is applied
 Partially                   50                     150               16.50               65.41           according to the tariffs,
 unbundled                                                                                                established    by    the
 access                                                                                                   company
Source: The access services standard offer of TEO LT, AB


                                                                                                                                79
                                                                               Lithuanian Communications Sector 2010


         Internet access

                                                                 i
         In 2010 wholesale Internet access services were provided by 8 providers, whose revenues,
received during the year from provision of wholesale Internet access, reached LTL 38.3 million (see
Figure 95), i. e. almost three times more than in 2005 and 13.6 per cent more compared to 2009.




         13.0                                                                               33.7                38.3
                              17.3                 18.4                 25.3

         2005                 2006                2007                  2008                2009                2010


Figure 95. The revenues from provision of wholesale Internet access in 2005–2010, LTL million
Source: RRT




         When analyzing the structure of the market according to the revenues, received by the providers
of wholesale Internet services, at the end of 2010 Satgate UAB had the largest share of revenues –
69.5 per cent (17 percentage points more than in 2009). Taking into consideration the increased share of
revenues of Satgate UAB on the wholesale Internet access market, compared to the last year, the market
share, occupied by other market participants reduced – the market share of TEO LT, AB reduced by
11.4 percentage points and amounted to 18 per cent, the share of revenues of Nacionalinis
Telekomunikacij        Tinklas UAB and LATTELECOM SIA each reduced by 3 percentage points
correspondingly. With the emergence of several new market participants, the share of revenues of the
said providers grew by 1 percentage point (see Figure 96).




                                                          Satgate UAB
                                                            69.5 %




                             Nacionalinis                                  LATTELEKOM SIA
                       telekomunikacij tinklas                                  3.9 %
                                                                        Others
                                UAB                   TEO LT, AB        2.8 %
                               6.0 %                    17.8 %


Figure 96. The distribution of the revenues from the provision of wholesale Internet access services
according to the providers in 2010, per cent
Source: RRT



         According to the information available to RRT, at the end of 2010 the wholesale xDSL access
services to other Internet access providers were provided by TEO LT, AB. The said service was used by
10 undertakings. At the end of 2010 TEO LT, AB sold 1 282 wholesale xDSL points of access, i. e. 20.1


i
  The wholesale Internet access service is defined as provision of bitstream and/or wholesale access to the local line to other
providers of Internet services, who, on the basis of the said services, provide their own services to their end users.

                                                                                                                           80
                                                                       Lithuanian Communications Sector 2010

per cent less than in 2009, to other Internet access providers. From 2005 to 2010 the number of
wholesale xDSL points of access, provided by TEO LT, AB, reduced more than two times, i. e. by 52.2
per cent (see Figure 97). Such a situation is likely to have emerged as the result of the technological
competition on the market, which encourages operators to develop their own access networks, based by
other technologies, for instance, local fibre lines.




        2 681                               2 363              2 217
                          2 155
                                                                                1 606          1 282

        2005              2006               2007              2008             2009            2010


Figure 97. The number of wholesale xDSL access, provided by TEO LT, AB in 2005–2010, units
Source: RRT




        Dark fibre

        As of 31 December, 2010 11 service providers were engaged in provision of dark fibre access
services. The dark fibre access service providers started providing RRT with information on the provided
                                               th
access numbers and revenues since the 4 quarter of 2006. From this period to the end of 2010 the
number of provided dark fibre access grew 4.8 times and reached 2 369 (see Figure 98). The rate of
growth of the number of dark fibre, provided in 2010 was not as rapid as during the previous three years,
however, compared to 2009, it grew by almost 5 per cent.




                                                                            2 257              2 369
                                                       1 848
                                  891
          489

         2006                     2007                 2008                  2009              2010

Figure 98. The number of provided dark fibre in 2006–2010, units
Source: RRT




        When analyzing the distribution of the number of the provided dark fibres by providers (see
Figure 99) one may see that from 2006 till the end of 2010 the market share, occupied by TEO LT, AB,
reduced by 5.9 percentage points, i. e. from 51.9 to 46.0 per cent and although, compared to 2008, in
2009 the share of TEO LT, AB grew by 7.7 percentage points, compared to 2009, in 2010 it reduced by
1.9 percentage point.




                                                                                                         81
                                                                                 Lithuanian Communications Sector 2010


          48.1 %                    37.2 %                                                52.1 %                     54.0 %
                                                               59.9 %

          51.9 %                    62.9 %                                                47.9 %                     46.0 %
                                                               40.2 %

           2006                      2007                       2008                       2009                      2010
    TEO LT, AB      Other service providers

Figure 99. The structure of the number of dark fibre access, according to the number of lines in 2006–2010,
per cent
Source: RRT



          Total revenues, received from dark fibre access at the end of 2010 amounted to LTL 19.7 million,
which is a 5.7 per cent decrease in a year. Figure 100 presents the distribution of revenues by providers.
Except for TEO LT, which generated 48.7 per cent of the total market revenues (3 per cent less than in
2009), the leader in terms of the received revenues was Skaidula UAB (30.8 per cent of the total
revenues, 4.1 percentage points more than in 2009), another leader was Pla iajuostis Internetas Vš
(14.6 per cent of the total revenues, 1.3 percentage point more than in 2009).



   2010                           48.7 %                                        30.8 %                    14.6 %      3.5 %   2.4 %

   2009                             51.7 %                                       26.7 %                  13.3 %       7.3 %   1.0 %

 2008**                                 59.8 %                                            23.3 %            10.0 %    4.9 %   2.0 %

   2007                                      64.4 %                                                 33.6 %                    2.0 %


     TEO LT, AB          Skaidula UAB          Pla iajuostis Internetas Vš       Lietuvos Energija AB*        Others

* Lietuvos Energija AB commenced providing its services since the 3rd quarter of 2010. Since the 4th quarter of 2010 the services are
provided by Data Logistics Center UAB, a subsidiary of Lietuvos Energija AB.
** Pla iajuostis Internetas Vš commenced providing its services since the 2nd quarter of 2010.
Figure 100. The market shares of dark fibre access services in terms of revenues in 2007–2010, per cent
Source: RRT




          Access to ducts

          The operators, wishing to provide retail broadband or voice services, can lay their own access
network and implement their own ducts or purchase the wholesale service of access to ducts from
another operator. Referring to Article 39 of the Law on Electronic Communications and the Rules for the
Installation and Use of Electronic Communications Infrastructure, approved by Order No. 1V-562 of the
Director of RRT of 10 June, 2005 (Official Gazette Valstyb s Žinios, 2005, No. 76-2786), the persons,
owning electronic communications and other appropriate infrastructure, must provide it for common use,
provided the conditions, provided in the said rules, are satisfied.
          Historically the ducts are usually owned by the incumbent providers of pubic communications
networks, therefore they have a possibility to rapidly develop their NGA networks, by using the available
duct infrastructure. Taking into consideration that the duct implementation costs (incurred when laying the
ducts, installing the manholes, etc.) are disproportionately high compared to the costs, incurred when
jointly using the existing ducts, the European Commission, for the purpose of encouraging the


                                                                                                                                 82
                                                                                     Lithuanian Communications Sector 2010

infrastructure based competition and efficient investment into the development of the NGA networks,
encourages common use of the existing infrastructure and avoiding the inefficient overlapping.
                                                                              nd
          According to the data of RRT, at the end of the 2                        quarter of 2010 there was 655 098 km of
ducts on the market, 97.8 per cent of which was owned by TEO LT, AB (98.2 per cent in 2008).
TEO LT, AB is the only provider of broadband and voice services, having a well-developed, in terms of
wide territorial coverage, access to ducts. Since 1 April, 2010 TEO LT, AB provided the access to
                                                                                                                     3
electronic communications service providers at the standard prices, specified in Table 10 . Compared to
the last change of prices, which occurred on 14 October, 2008, one can see, that the monthly charge for
lease of space in 1 km of ducts has reduced by LTL 4. In addition the discount system, depending on the
amount of laid ducts, measured in kilometers, was changed (see Table 11).



Table 10. The standard prices, LTL w/o the VAT of access to ducts, provided by TEO LT, AB in 2008–2010
                                 Charge                                                      Standard prices (LTL)
                                                                                                     560.00
 The one-off charge for investigation of technical conditions for lease                         since 01-04-2010
 of space in ducts and the provision of information, in case the length
                                                                                                     560.00
                     of the ducts is 1 km or less
                                                                                        (from 14-10-2008 till 01-04-2010)
                                                                                                   0.56*L(m)*
 The one-off charge for investigation of technical conditions for lease
                                                                                                since 01-04-2010
 of space in ducts and the provision of information, in case the length
                                                                                                   0.56*L(m)*
                    of the ducts is more than 1 km
                                                                                        (from 14-10-2008 till 01-04-2010)
                                                                                                      96.00
                                                                                                since 01-04-2010
        The monthly charge for lease of space in 1 km of ducts
                                                                                                     100.00
                                                                                        (from 14-10-2008 till 01-04-2010)
* L(m) – the length of the investigated duct, m
Source: the data of TEO LT, AB

Table 11. Applied discounts of access to ducts, provided by TEO LT, AB in 2008–2010, per cent
                     Discounts from 01-04-2010                                    Discounts from 14-10-2008 till 01-04-2010
                                      Discount depending on the                                       Discount depending on the
      The length of ducts, km                                             The length of ducts, km
                                       length of ducts, per cent                                        length of ducts, per cent
               9 km                               2%
                                                                                50–59 km                          2%
             60–69 km                             4%
                                                                                60–69 km                          4%
             70–79 km                             6%
                                                                                70–79 km                          6%
             80–99 km                             8%
                                                                                80–89 km                          8%
            100–199 km                            10 %
                                                                                90–99 km                          9%
             200–299                              12 %
                                                                              100 and more                        10 %
           300 and more                           14 %
Source: the data of TEO LT, AB




          Summary

     Compared to 2009, in 2010 the number of unbundled access lines, provided by TEO LT, AB, grew by
     40 per cent and reached 862. As in the previous year, in 2010 TEO LT, AB provided the said access
     to two undertakings: Baltnetos Komunikacijos UAB and Public Enterprise Infostrukt ra.
     Compared to 2009, the revenues, received from the provision of wholesale Internet access services
     grew by 13.6 per cent and reached LTL 38.3 million.
     At the end of 2010 the total revenues from the dark fibre access service provision activities amounted
     to LTL 19.7 million, i. e. reduced by 5.7 per cent during the year.




                                                                                                                                    83
                                                                                  Lithuanian Communications Sector 2010

     Providers of electronic communications services of the Republic of Lithuania most frequently use the
     access to ducts, provided by TEO LT, AB.




1
  http://www.rrt.lt/lt/verslui/konkurencijos-prieziura/standartiniai-pasiulymai/prieigos-pasiulymai.html
2
  http://www.teo.lt/sites/default/files/VERSLAS/Paslaugu_teikejams/Atsieta_prieiga/LLU_naujas_3_priedas.pdf
3
 http://www.teo.lt/sites/default/files/VERSLAS/Paslaugu_teikejams/Infrastruktura/Vieta_RKKS_2%20priedas%20ir%20jo%203%20pr
iedelis.pdf




                                       2.3.2. Networks Interconnection Services


          The demand for networks interconnection services is shaped by the operators, who wish to
provide their subscribers with the possibility to be able to communicate with the largest number of other
operators’ subscribers possible. The networks interconnection services consist of call origination, call
transit and call termination on both public mobile and fixed networks, as well as the roaming mobile
services, provided to subscribers of foreign public mobile service providers, visiting the Republic of
Lithuania.




          General market overview

          In 2010 the networks interconnection market remained among the most significant parts of the
electronic communications market. The market, which underwent rapid growth from 2003 till 2008, in
2009 and in 2010 reduced by 7.3 and by 18.8 per cent correspondingly. The reduction of the networks
                                i
interconnection revenues could have resulted from the reduction of both fixed and mobile call termination
prices (see Figures 106 and 107). The revenues from networks interconnection activities in 2010
amounted to LTL 549.5 million (see Figure 101). At the end of 2010 the networks interconnection market
share in the overall structure of the revenues of the sector amounted to 21.4 per cent of all the electronic
communications sector revenues and compared to 2009, reduced by 2.1 percentage points. The
networks interconnection market, which in 2009 reduced to the same extent as the entire electronic
communications market, experienced a much more significant reduction in 2010.




i
  The network interconnection revenues are the revenues, received for provision of services of origination, transit and termination of
calls on both public mobile networks and public fixed networks to other operators and from foreign public mobile service providers
for the calls, made by their subscribers, visiting the Republic of Lithuania and using roaming services.

                                                                                                                                  84
                                                                          Lithuanian Communications Sector 2010

 750                                            22.5 %         22.7 %        23.4 %         23.5 %                    25%
                                    21.1 %                                                                21.4 %
                      18.9 %
 500     18.0 %                                                                                                       20%

                                                                673.8         730.3          676.8
                                    531.6        607.5                                                     549.5
 250                                                                                                                  15%
         364.6        400.4

   0                                                                                                                  10%
         2003          2004          2005           2006        2007           2008          2009          2010
         Networks interconnection revenues             The share in the total electronic communications market revenues

Figure 101. The dynamics of the network interconnection market revenues, LTL million, and its share in the
structure of the total electronic communications market revenues, per cent, in 2004–2010
Source: RRT



        In terms of revenues in 2010 the total networks interconnection market share, collectively
occupied by the large public mobile communication operators (Omnitel UAB, Bit Lietuva UAB and Tele2
UAB) and incumbent - public fixed operator (TEO LT, AB) amounted to 83.2 per cent and amounted to
LTL 517.3 million (see Figure 102). In 2009 the corresponding market share was 4.3 percentage points
larger and reached 88 per cent. In 2010 the mobile operators each had 20 per cent of the networks
interconnection market on average: Omnitel UAB and Tele2 UAB each had 20.2 per cent, Bit Lietuva
UAB had 19.5 per cent of the market. In 2010 TEO LT, AB received the largest amount of revenues for
networks interconnection services (23.3 per cent), which amounted to LTL 127.1 million. Other networks
interconnection service providers had 16.8 per cent of all the revenues for networks interconnection
services. It should be noted that more than one half, i. e. 10.9 per cent out of 16.8 per cent of the market
share of other networks interconnection service providers was occupied by Mediafon UAB. In 2010 the
networks interconnection market shares, occupied by mobile operators reduced to a similar extent, each
operator’s share reduced by 30.4 per cent on average. The market share, occupied by TEO LT, AB grew
the most, i. e. by 5.3 percentage points, the market share, collectively held by other fixed and mobile
telecommunication network operators grew by 0.6 percentage points.



                                                           Others
                                        Mediafon UAB       5.9 %
                                           10.9 %                       Omnitel UAB
                                                                          20.2 %

                                 TEO LT, AB
                                   23.3 %



                                                                        Bit Lietuva UAB
                                        Tele2 UAB                           19.5 %
                                         20.2 %

Figure 102. The structure of the networks interconnection market in terms of revenues in 2010, per cent
Source: RRT




                                                                                                                          85
                                                                                   Lithuanian Communications Sector 2010

         Call termination services

          Call termination services cover the calls, originated on Lithuanian and foreign operators'networks
                                                                                                            ii
and terminated on Lithuanian operators'public fixed and mobile telephone networks . The vast majority
(94.9 per cent or LTL 483.8 million) of the networks interconnection market revenues, received from
Lithuanian mobile operators‘ subscribers in 2010, was received for the call termination services. 55.1 per
cent of the call termination revenues during the year were received by mobile operators, the revenues
amounted to LTL 266.5 million.
         During 2010 the size of the market of call termination services, in terms of the duration of calls,
terminated on operators'networks, grew by 3.4 per cent and amounted to 2 015.6 million minutes (see
Figure 103). During the year the number of calls, terminated on mobile networks was almost 5 times
higher than that, terminated on fixed networks, i. e. more often calls were made to other mobile
communication subscribers than to fixed communication subscribers. During 2010 the duration of calls,
terminated on public mobile telephone networks, grew by 12.5 per cent and amounted to 84.4 per cent (1
705.2 million minutes) of all the calls, terminated on Lithuanian operators'networks. During the year the
duration of calls, terminated on public fixed telephone networks grew by 2.2 per cent and reached 314.4
million minutes.




                                                                                        1 460.5         1 512.1      1 705.2
                                                       1 121.3          1 302.1
                      848.6           995.4
      699.8
      215.2           200.9           253.6            281.0             291.5           298.5           307.5        314.4

      2003            2004            2005              2006              2007            2008            2009        2010

      Duration of calls terminated on fixed networks           Duration of calls terminated on mobile networks

Figure 103. The duration of calls, terminated on fixed and mobile networks in 2003–2010, million minutes
Source: RRT



         When evaluating the duration of calls, terminated by the subscribers of Lithuanian public fixed
and mobile telephone network operators, the calls, originated on mobile networks, fixed networks and
foreign countries'networks are distinguished. The largest share, i. e. 86.1 per cent (1 474 million minutes)
of the calls, terminated on mobile communication networks in 2010, was originated on other mobile
networks (see Figure 104). The largest share (40.6 per cent or 127.8 million minutes) of calls, terminated
on fixed networks, was also originated on mobile networks and the smallest share of calls, terminated on
both fixed and mobile networks was originated on fixed networks (3.8 per cent and 24.2 per cent
correspondingly).




ii
   The call termination service market, covering only the calls from other networks is further examined in the present part of the
Report and the internal calls are not included.

                                                                                                                               86
                                                                               Lithuanian Communications Sector 2010

 Terminated on mobile netw orks
                          2010                                        86.1 %                                     3.9 % 10.0 %
                          2009                                        88.0 %                                       3.7 %8.3 %
                          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 %
  Terminated on fixed netw orks
                          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 mobile netw orks   Originated on fixed netw orks       Originated on foreign countries'netw orks

Figure 104. The dynamics of duration of calls, terminated by Lithuanian fixed and mobile networks operators
subscribers according to the origin of calls in 2005–2010, per cent
Source: RRT



         In 2010 the duration of calls, originated on fixed networks and terminated on other fixed networks
saw the largest growth (by 20.3 per cent – from 63.2 million minutes (in 2009) to 76 million minutes (in
2010)). The duration of fixed calls to mobile networks experienced the biggest reduction in 2010 (by 6.1
per cent – from 41.3 million minutes (in 2009) to 35.2 million minutes (in 2010).
         In 2010 the structure of the mobile call termination market in terms of mobile operators market
shares, measured in terms of duration of calls, shows that the largest number of calls (535.6 million
minutes) was terminated on the Tele2 UAB network , i. e. most frequently calls from other networks were
made to the Tele2 UAB network (see Figure 105). In 2010 the market shares of all the three operators
remained almost unchanged: the size of the Tele2 UAB call termination market grew by 0.9 percentage
points and the Omnitel UAB and Bit Lietuva UAB market shares reduced by 0.7 and 0.2 percentage
points correspondingly. The Tele2 UAB market share in terms of the duration of terminated calls grew 5.2
times during the time period of 2000-2010, i. e. from 7.2 per cent up to 37.5 per cent. The Omnitel UAB
share of the corresponding market reduced 2.2 times since 2000. In 2010 Bit Lietuva UAB terminated
28.8 per cent (488.5 million minutes) of all the calls, terminated on Lithuanian mobile operators'networks
during 2010. Since 2000 the share of calls, terminated in Bit                      Lietuva UAB network grew by 10.2
percentage points.




                                                                                                                              87
                                                                                            Lithuanian Communications Sector 2010

 2010*                      33,7%                                        28,8%                                          37,5%
 2009*                      34,4%                                          29 %                                         36,6 %
  2008                       36,6%                                             29,9 %                                    33,5 %
  2007                        38,2%                                               30 %                                    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          Bit Lietuva UAB             Tele2 UAB
* The share of Mediafon UAB call termination market amounted to 102.6 thousand minutes in 2010 and 28.6 thousand minutes in
2009
Figure 105. The structure of the duration of calls, terminated on public mobile networks in 2000–2010, per
cent
Source: RRT



            In 2010, as previously, Lithuanian public fixed and mobile operators applied per-minute call
termination tariffs and prices of auxiliary interconnection services (periodical (monthly) and annual).
Public mobile operators and public fixed operators applied different call termination tariffs with regard to
both size and structure. In 2010 both fixed and mobile operators applied different call termination rates
during peak time (from 8.00 a. m. till 8 p. m. business days) and during off-peak time (from 8.00 p. m. till
8. 00 a. m. business days and around the clock on rest-days and holidays). The fixed operators, apart
from the said prices, charged the call setup price. In 2010, as in the previous years, both mobile and fixed
operators applied prices for means connected with mobile termination rates, which included
implementation of interconnection point (one-off and periodical (monthly) charges) and provision of
capacity in the interconnection points (one-off and periodical (monthly) charges for the 2 Mbps port). The
said charges, however, differ in size.
          By orders No. 1V–1516, No. 1V–1515 and No. 1V–1517 of 24 December, 2009 the price control
obligation was established, which, starting from 1 January, 2010 reduced the voice calls termination
prices by 37.4 per cent down to ct 18.04 per minute (w/o the VAT) during the peak time and ct. 9.02 per
minute (w/o the VAT) during the off-peak time. The said orders also foresee for the gradual reduction of
prices in 2011 and in 2012 (see Figure 106).




     36.0                                                                9.0
                                    28.8                                                             6.6                     7.0    6.3   5.6
            18.0                           14.4                   18.0         14.4          12.5            10.0

         2004-2009                    2009-2010                     2010-2011                  2011-2012                         from 2012

   Peak time       Off-peak time     No differentiation

Figure 106. The dynamics of mobile termination rates (MTR), ct per minute (w/o the VAT)
Source: RRT



          According to the Commission Recommendation 2009/396/EC of 7 May 2009 on the Regulatory
Treatment of Fixed and Mobile Termination Rates in the EU, the national regulatory authorities, before
the end of 2012, should set the call termination tariffs, based by the costs, incurred by a cost-efficient

                                                                                                                                                    88
                                                                                 Lithuanian Communications Sector 2010

operator. The fixed to mobile calls termination tariffs, calculated by using the said methodology would
reach from ct 5.18 per minute (EURc 0.015 per minute) to ct 10.36 per minute (EURc 0.03 per minute) at
the end of 2012. The call termination tariffs, set for Lithuanian operators in 2012 are ct 6.99 per minute
(w/o the VAT) during the peak time and ct 6.26 per minute (w/o the VAT) during the off-peak time.
          In 2010 operators used these fixed call termination rates: ct 5.42 per minute as the peak time
price of termination of a call, related to the Type II national transit and ct 2.79 per minute as the off-peak
time price of termination of a call, related to the Type II national transit as well as 2.63 call setup charge.
Starting from 24 April 2009 and following the completion of a market analysis on Call termination on
individual public telephone networks provided at a fixed location, and for the purpose of implementation of
the price control obligations, established in the orders of the Director of RRT, all the providers of call
termination services, provided on public fixed telephone networks had to apply the same calls termination
tariffs. For the purpose of implementation of the said obligations, fixed operators, having significant
market power, shall reduce the call termination and setup charges in 2011 and in 2012 (see Figure 107).



                                        1,2
                   from 01-01-2012                          4,2
                                     0,7
                                              2.0
  from 01-01-2011 till 01-01-2012                               4.8
                                           1.7
                                                    2.8
  from 01-01-2010 till 01-01-2011                                 5.4
                                                 2.6
                                                          3.6
 from 31-01-2008 till 01-01-2010*                                     6.0
                                                          3.6
                                                                      6.0
  from 01-01-2005 till 01-01-2008                                              10.0
                                                                      6.0

      Call setup         National call termination during the peak time       National call termination during the off-peak time

* some operators applied the call termination rates, which were applied in 2005-2008, during the period

Figure 107. The dynamics of prices of call termination, relating to the national transit of Type II, on public
fixed networks, in 2005–2012, ct per minute (w/o the VAT)
Source: RRT



          The market analysis on Voice call termination on the individual public mobile network and on Call
termination on individual public telephone networks provided at a fixed location, performed on 24
December, 2009, showed that a networks interconnection is a mean related to call termination. In 2010
the networks interconnection parties, in consideration of the adopted decisions, shared the costs, relating
to networks interconnection by half. Until 2009 the charges for the means related to call termination were
applied by Omnitel UAB, Bit Lietuva UAB, Tele2 UAB and TEO LT, AB, while in 2010 4 mobile and
11 fixed operators shared the costs, relating to networks interconnection.




       Summary

   In terms of the revenues in 2010 the joint share of Omnitel UAB, Bit Lietuva UAB, Tele2 UAB and
    TEO LT, AB in the networks interconnections market measured in terms of the revenues received by
    the operators, amounted to 83.2 per cent and reached LTL 517.3 million. In 2010 Omnitel UAB,



                                                                                                                                   89
                                                                     Lithuanian Communications Sector 2010

      Bit Lietuva UAB and Tele2 UAB each had 20 per cent of the networks interconnection market on
      average and TEO LT, AB received 23.3 per cent of all the market revenues during the year.
      The size of the call termination market, measured in terms of the duration of calls, terminated in
      operators‘ networks, grew by 3.4 per cent during 2010 and amounted to 2 015.6 million minutes,
      84.4 per cent of which (1 701.2 million minutes) were terminated on public mobile networks.
      During 2010 the largest share of the calls, terminated on mobile networks, i. e. 86.1 per cent
      (1 474 million minutes) were originated on mobile networks and the largest share, i. e. 40.6 per cent
      (127.8 million minutes) of calls, terminated on fixed networks were originated on foreign countries'
      networks.
      37.5 per cent of all the calls, terminated on public mobile telephone networks during 2010, were
      terminated on the Tele2 UAB network, 33.7 per cent of all the calls were terminated on the Omnitel
      UAB network and 29 per cent - on the network of Bit Lietuva UAB.
      In 2010 the public mobile network operators applied the following MTRs: ct 18.04 per minute (w/o the
      VAT) during the peak time and ct 9.02 per minute (w/o the VAT) during the off-peak time.




                                               2.3.3. Leased Lines


            During the time period of 2001–2010 an increase of revenues and development of competition
was observed on the leased lines market, which reduced the market share of the main market player, i. e.
                                                                                                          i
TEO LT, AB in terms of revenues by more than 17 percentage points and, in terms of the number of lines
the market share of TEO LT, AB reduced by almost 30 percentage points. In 2001–2010 the revenues of
the leased lines market grew by 11 per cent each year on average. The change of the structure of the
leased lines market, the main of which is the reduction of the number of analogue local lines, which had
accelerated in the later years, resulted not only from the increase of use of digital technologies and the
further reduction of the need of implementation of direct communication between organizations’
subsidiaries, but also by development of broadband communication.
            At the end of 2010 leased lines services were provided by 12 undertakings: TEO LT, AB,
Lietuvos Radijo ir Televizijos Centras AB, Lietuvos Geležinkeliai AB, Bit Lietuva AB, Infostrukt ra V ,
Cubio UAB, the branch of Lattelekom SIA, Data Logistics Center UAB, Pla iajuostis Internetas Vš ,
Dicto Citius UAB, Linx Telecommunications UAB and Ektra UAB.
            Compared to 2009, in 2010 the revenues from the leased lines services reduced by 21 per cent
and reached LTL 35.1 million (see Figure 108). In the total electronic communications revenues structure
leased lines market amounted only to 1.4 per cent in 2010.




i
    The data of the time period of 2003–2010

                                                                                                        90
                                                                                         Lithuanian Communications Sector 2010




                                                                                                        38.5           44.4
                                                                                                                                       35.1
           24.1        24.4        25.8              25.3        26.1       25.4          26.7


          2001         2002        2003              2004       2005        2006         2007           2008           2009            2010


Figure 108. The revenues of leased lines service market in 2001–2010, LTL million
Source: RRT

               The largest amount of revenues from the leased lines services activities in 2010 was received by
TEO LT, AB, i. e. 63.8 per cent of all the market revenues and the share grew by 0.8 per cent during the
year. The market share of Pla iajuostis Internetas Vš grew by 0.5 percentage point up to 5.8 per cent.
The leased lines services, provided by Bit Lietuva UAB, in terms of the received revenues, changed very
insignificantly and amounted to 6 per cent. The market shares, occupied by other main lased lines market
participants, in terms of revenues, reduced in 2010: the share of revenues of the leased lines market,
                                                ii
received by Lietuvos Energija AB reduced by 3 percentage points (from 15 down to 12 per cent), the
share of Lietuvos Geležinkeliai AB by 0.7 percentage point (from 4 to 3.3 per cent) (see Figure 109).


     2010,00                                  %
                                          63.8'                                    12.1 %         3.3 %    6.0%        5.8 %           9.0 %
     2009,00                             63.0 %                                      15.0 %            4.0 %      6.0%        5.3 %      6.7 %
     2008,00                           61.0 %                                        18.2 %                6.8 %       4.0% 3.0 %        7.0 %
     2007,00                     55.3 %                                       23.7 %                        7.8 %                13.3 %
     2006,00                  51.7 %                                        29.0 %                             7.0 %              12.3 %
     2005,00                    53.7 %                                      24.3 %                        6.9 %                 15.1 %
     2004,00           44.7 %                                 25.4 %                      6.5 %                        23.4 %
     2003,00                      56.5 %                                             27.9 %                                    15.6 %
       2002*                               65.8 %                                             19.4 %                3.9 %             10.9 %
     2001,00                                                81.2 %                                         1.8 %4.2 %            12.7 %

         TEO LT, AB     Lietuvos energija AB**        Lietuvos Geležinkeliai AB    Bit Lietuva AB      Pla iajuostis Internetas Vš        Others


* The data of the 1st half-year
** since the 4th quarter of 2010 the services have been provided by Data Logistics Center UAB, a subsidiary of Lietuvos Energija AB
Figure 109. The structure of revenues of the leased lines services market in 2001–2010, per cent
Source: RRT



               The total number of leased lines, provided to other undertakings at the end of 2010 was
3 108 and, compared to the end of 2009, it reduced by 20 per cent. The operators mostly provided leased
lines by using their network resources and only 13.9 per cent of the lines at the end of 2010 were
secondary, i. e. resold leased lines belonging to another undertaking.
               The reduction of the number of leased lines resulted from the decrease of the number of local
lines (by 23.1 per cent) and long-distance lines (by 9.6 per cent). The reduction of the number of local
leased lines was mostly determined by the reduction of the number of leased lines, provided by
TEO LT, AB. The reduction of the number of long-distance lines was determined by the reduction of the
number of leased lines of Bit Lietuva UAB and TEO LT, AB. The change of the number of international
lines provided to others, which grew by 9.6 per cent in 2010, i. e, from 281 to 308 lines, was determined

ii
     since the 4th quarter of 2010 the services have been provided by Data Logistics Center UAB, a subsidiary of Lietuvos Energija AB

                                                                                                                                                 91
                                                                                      Lithuanian Communications Sector 2010

by the growth of the number of leased lines of Data Logistics Center UAB (see Figure 110). However both
the reduction of the number of long-distance leased lines and the growth of the number of international
leased lines did not have a significant influence on the overall change of the number of leased lines, since
the share of these lines within the total structure of the market amounted to 6.4 per cent and 9.9 per cent
correspondingly.



 4500           520              4 113             3 901                             3 940                                       550
                                                                    3 831
                                                                                                     3 383
                                 484                                                                                             450
                3 928
 3000                                                                                                                2 602
                                                                                      273                                        350
                                                                    202                                              308
                                                    184                                                 281                      250
 1500                                                                                  235
                                                                                                     219                         150
                                                                                                                     198
                                 72                                   163
                                                     116
    0                                                                                                                            50
                2004             2005              2006             2007             2008            2009            2010

           Local lines                Long-distance lines            International lines

Figure 110. The dynamics of the number of leased lines on the market in 2004–2010, units
Source: RRT



          At the end of 2010 58.5 per cent of the provided leased lines were wholesale leased lines and
41.5 per cent were retail leased lines. The proportion between the revenues, received from retail and
wholesale activities in 2010 did not change, compared to 2009, and was 47.2 and 52.7 per cent
correspondingly.
          The share of the number of digital leased lines in the total structure continued to grow and at the
end of 2010 reached 59.8 per cent of all the leased lines, provided to others (see Figure 111). Compared
to 2009, in 2010 the number of digital leased lines grew by 7.9 per cent (in 2009 the growth amounted to
9.4 per cent), the number of analogue leased lines reduced by 42.1 per cent (24.9 per cent in 2009).



    19.9%                24.0%             28.3%            22.7%           25.0%            35.4%           44.4%
                                                                                                                             59.8%
        79.6%
                         76.0%             71.7%            77.3%           75.0%            64.6%           55.6%
                                                                                                                             40.2%

        2003             2004              2005             2006            2007             2008            2009            2010
        Analogue            Digital
Figure 111. Digital and analogue leased lines market share in 2003–2010, per cent
Source: RRT



          When analyzing the leased lines market according to speed rate characteristics, it is observed
that during 2010 the number of leased lines of the speed rate more than 2 Mbps grew by 19.9 per cent. At
the end of the year the number of the lines was 1 002 (see Figure 112). The use of lines of higher speed
rate obviously shows the growing need for high-speed data communication services.




                                                                                                                                      92
                                                                   Lithuanian Communications Sector 2010




                                                                                                  1 002
                                                                                      836
                                                                        570

                                 85                        104
      11           42                         60

     2003         2004          2005          2006         2007         2008         2009          2010

Figure 112. The number of leased lines of speed rate more than 2 Mbps in 2003–2010, units
Source: RRT




        Summarizing the leased lines market, it worth to note that in 2010 the market reduced in terms
of both the received revenues and the number of lines, which resulted from the reduction of the number of
local and long-distance leased lines. The demand for international leased lines and higher speed rate
digital leased lines continued to grow and TEO LT, AB remained the largest provider of the leased lines
services.




                    2.3.4. Television and Radio Programs Transmission Services


        During the last six years the television and radio programs transmission services market, in terms
of revenues, grew more by 45 per cent. The growth of the market during the latter years was determined
by the rapid development of the digital terrestrial television networks when getting ready for the transition
from the analogue to digital television broadcasting. A completely different situation was observed on the
digital audio broadcasting (DAB) sector: in June 2001, when the DAB broadcasts commenced, six radio
programs were transmitted and in 2010 the DAB broadcasts were completely stopped, since the market
for the services failed to come into existence due to the supply and demand factors.




        General market overview


        Two undertakings were engaged in the provision of television and radio programs’ transmission
services to other operators in 2010: LRTC AB provided analogue terrestrial radio and analogue terrestrial
television programs’ transmission services, both LRTC AB and TEO LT, AB provided digital terrestrial
television programs’ transmission services.
        In 2010 all the revenues of the terrestrial radio and television programs transmission services
amounted to LTL 28.9 million and were 4.7 per cent smaller than in 2009 (see Figure 113). This change
was determined by the reduction of the revenues from analogue television and analogue radio programs’
transmission services (by 9.2 per cent and by 15.3 per cent correspondingly), which occupied the 63 per


                                                                                                          93
                                                                       Lithuanian Communications Sector 2010

cent market share and were not compensated by 6.7 growth of the revenues of the digital television
programs’ transmission services.


 40


 30


 20

                                                 25.3           28.3              30.4               28.9
 10           19.9                 20.6
 0

             2005                  2006          2007           2008              2009              2010


Figure 113. The revenues of the television and radio programs’ transmission services market in 2005–2010,
LTL million
Source: RRT



            In 2010 the share of revenues, received from provision of digital television and radio programs’
transmission services in the total structure of the television and radio programs’ transmission services
market continued to grow. Compared to 2009, in 2010 the said share grew by 4 percentage points and
amounted to 37 per cent of the market revenues.
            Compared to 2009, the reduction of the revenues, received from provision of television and radio
programs transmission services was smaller in 2010 than the reduction of the revenues of the total
electronic communications market, which reached 10.7 per cent: in 2010 the share of the revenues,
received for provision of television and radio programs transmission services amounted to 1.13 per cent
in the total electronic communications structure and was 0.07 percentage point higher than in 2009.



            Terrestrial television programs transmission

            Terrestrial television programs are transmitted in Lithuania by both analogue and digital format.
The revenues from provision of analogue terrestrial television programs’ transmission services in 2010
amounted to LTL 15.1 million and, compared to 2009, reduced by 9.2 per cent. The revenues, received
from provision of digital terrestrial television programs’ transmission services in 2010 amounted to LTL
10.7 million and grew by 6.7 per cent during the year (see Figure 114). The larger share of the revenues
from provision of digital television programs’ transmission services was received by LRTC AB, i. e. LTL
8.8 million (82.4 per cent of all the revenues, received from provision of all the digital terrestrial television
programs’ transmission services). The amount of all the television programs’ transmission services in
2010 reached LTL 25.8 million.



                         5.5
                                                        10.0                              10.7
                        18.1                            16.7                              15.1

                        2008                            2009                             2010
      Analogue terrestrial Digital terrestrial

Figure 114. The dynamics of the revenues, received from provision of television programs broadcasting
transmission services in 2008–2010, LTL million
Source: RRT




                                                                                                              94
                                                                    Lithuanian Communications Sector 2010

        At the end of 2010 there were 123 analogue terrestrial and 90 digital terrestrial television stations
in Lithuania. The expected zones of coverage of the digital terrestrial television (Digital Video
Broadcasting – Terrestrial (DVB-T)) networks are presented in Figures 115-118. After a particularly rapid
development of the DVB-T networks in 2008, during the last two years the development was not as
intensive, since the majority of the individuals already have the possibility to use the digital terrestrial
television services, so the attention was dedicated to quality coverage of low residential density territories
and the implementation of high definition television (HDTV). In 2009 the first DVB-T station in Lithuania
was launched in Vilnius. Transmission of three high definition television programs started over the said
station and in December 2010 the licence was issued to rebroadcast three HDTV programs in Kaunas.
        According to the results of the survey of use of digital television by the country’s residents,
commissioned by RRT in December 2010, 41 per cent of Lithuania’s residents view analogue terrestrial
television on average and 19 per cent view digital terrestrial television.




 Figure 115. The coverage of the First digital terrestrial network of LRTC AB
 Source: RRT




                                                                                                           95
                                                                    Lithuanian Communications Sector 2010




  Figure 116. The coverage of the Second digital terrestrial network of LRTC AB
  Source: RRT




Figure 117. The coverage of the First digital terrestrial network of TEO LT, AB
Source: RRT




                                                                                                      96
                                                                     Lithuanian Communications Sector 2010




Figure 118. The coverage of the Second digital terrestrial network of TEO LT, AB
Source: RRT




        Terrestrial radio programs transmission

        The analogue and digital terrestrial radio transmission services were provided to other
undertakings by LRTC AB. In 2010 the size of the market amounted to LTL 3.1 million and, compared to
2009, reduced by 15.5 per cent (see Figure 119). In 2010, according to the revenues the market share of
terrestrial radio programs transmission services in the overall structure of the television and radio
programs transmission services market amounted to 10.8 per cent (2.1 per cent in 2009).




                  4.71                                3.67                            3.11

                  2008                                2009                            2010

Figure 119. The dynamics of the revenues, received from radio programs transmission services in 2008–2010,
LTL million
Source: RRT



        In 2010 broadcasts of DAB were completely stopped. According to the data of the Radio and
Television Commission of Lithuania, the licences were refused due to the slow technological development
                                                                            1
and the failure of the digital radio set market to fully come into existence .




                                                                                                       97
                                                                                  Lithuanian Communications Sector 2010

            The broadcasters’ revenues from advertising

            When evaluating the total audiovisual market, it is necessary to take into consideration the
changes of the revenues, received by broadcasters during the year. According to the data of the Radio
and Television Commission of Lithuania, a small increase of the revenues, received by the radio and
television broadcasters from advertising was observed in 2010: compared to 2009, in 2010 the revenues
                                                                           2
grew by 1.2 per cent and amounted to LTL 181.66 million . The revenues from advertising, received by
television broadcasters, covered 85.5 per cent of the entire market and grew by 2.8 per cent during the
year. The revenues from advertising, received by radio broadcasters, amounted to LTL 26.4 million and
reduced by 7.1 per cent (see Figure 120).




                       241.1
                                                                 151.1                                    155.3

                        39.3                                     28.4                                      26.4
                       2008                                      2009                                     2010
         Radio        Television

Figure 120. The dynamics of the revenues, received by radio and television broadcasters from advertising in
2008–2010, LTL million
Source: the Radio and Television Commission of Lithuania




            To summarize the dynamics of the radio and television programs transmission services market
in 2010, it should be noted that the 4.7 per cent decrease of the market revenues was determined by the
reduction of the revenues, received from provision of analogue radio and television programs
transmission services while the revenues, received from provision of digital television programs
transmission services continued to grow. The growth of the market of broadcasters‘ revenues from
advertising, observed in 2010, allows to make an assumption that in the coming years the increasing
development trends will be observed on the market of television and radio programs transmission
services, especially digital terrestrial television services, which will also be influenced by the final
switchover from analogue to digital terrestrial television, foreseen to be completed until 29 October, 2012.



1
    http://www.rtk.lt/assets/files/LRTK%20ataskaita%20Seimui%20uz%202009%20metus.doc
2
    http://www.rtk.lt/lt/naujienos/pranesimai_spaudai/transliuotoju_ir_retransliuotoju_pajamos_per_2010_metus




                                                                                                                    98
                                                                    Lithuanian Communications Sector 2010


                          3. Postal and Courier Services Market


        During the time period of 2002–2010 the revenues of Lithuanian postal and courier services
market grew 2.4 times and the market share within the GDP amounted to a stable 0.2–0.3 per cent share.
During the last six years the number of postal and courier service providers underwent little changes, the
structure of the postal and courier services market in terms of revenues also was stable. The annual
change of the shares of postal and courier services sectors within the said structure reached
2.8 percentage points on average.
        During the time period of 2005–2010 the growth of universal services reached 24.6 per cent and
their decrease, observed starting from 2008, which may be related with the economic recession, was
insignificant, i. e. within the limit of 1 per cent. The letter tariffs, which remain unchanged since 2007
determined that Lithuania is in the top ten of the EU Member States, which have the lowest nominal
prices for a domestic standard letter and for letter mail within Europe. When analyzing the letter delivery
quality indicators, a better indicator of the share of letters, delivered on the third business day following
the dispatch (D+3) is observed, which exceeds the established standards, however the quality indicators
of next day delivery (D+1) during the period in question still remain lower than those established.




        General market overview

        Six EU Member States have fully liberalized their postal markets, i. e. Finland (in 1991), Sweden
(in 1992), the United Kingdom (in 2006), Germany (in 2008), Estonia and the Netherlands (in 2009)
however, despite that the level of competition is still lower than could have been expected theoretically
after the opening of the market and the real competition exists only on individual market segments and is
                               1
different in different countries . The said trends are also mentioned in the analysis, performed by UNI
Global Union, in which, upon analyzing different countries’ postal market liberalization practice, it is stated
that although, referring to the theory of economics, market liberalization increases the competitiveness of
the market and encourages the market growth, development of innovation, reduction of prices and
increase of employment, that is not the case with the postal market: the competition remains low after the
liberalization, the number of companies, able to compete with the incumbent postal operator, fluctuates
from 1 to 4 and the level of innovation is very low, since the competition on the market is effected mostly
                      2
with regard to prices . The map of liberalization of the postal market in the European Union Member
States is presented in Figure 121.




                                                                                                            99
                                                                        Lithuanian Communications Sector 2010




   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. The United Kingdom       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 121. Liberalization of postal markets in the European Union
Source: FFPII3



         At the end of 2010 the total number of providers of postal and courier services in Lithuania
reached 71, including 12 providing postal services and 71 providing courier services. During the year
23 undertakings were deleted from the list of providers of courier services, 10 undertakings were entered
into the list, 4 undertakings were deleted from the list of providers of postal services and 1 undertaking
was entered into the list (see Figure 122).




                                                                                                                 100
                                                                                         Lithuanian Communications Sector 2010




                74                   78                     81              15      79              15      84                     71
         11                    11                   14                                                                       12


          2005                  2006                  2007                  2008                     2009                     2010
       Providers of postal services           Providers of courier services

Figure 122. The dynamics of the number of providers of postal and courier services in Lithuania in 2005–
2010
Source: RRT



          In 2010 the revenues of the postal and courier services market reached LTL 238.6 million and
their share within the GDP remained the same as in the previous year, i. e. 0.3 per cent. A strong
correlation can be noted between the changes of the GDP and the postal and courier services market
(see Figure 123).



                                                         32.5 %
       25.5 %
                                                                                            17.5 %
                                          11.0 %                           12.2 %
                       7.4 %                                                                                                      5.5 %

       10.2 %                             7.8 %            7.8 %           9.8 %
                      5.0 %                                                                 2.9 %                 -12.6 %
                                                                                                                                  1.3 %

                                                                                                                 -14.7 %

        2003           2004               2005             2006            2007              2008                 2009            2010


        Change of the GDP            Change of the postal and courier services market
Figure 123. The comparison of annual changes of revenues of the postal and courier services market and the
GDP in 2003–2010, per cent
Sources: RRT, Statistics Lithuania



          The average growth of the revenues on the postal and courier services market during the time
period of 2002–2010 reached 12.1 per cent and the average revenues were LTL 183.3 million. In 2010
the revenues of postal and courier services market grew by 5.5 per cent (see Figure 124).




                                                                                                    258.6            226.1           238.6
                                                                   196.2            220.1
                     127.0           133.4         148.1
       101.2

       2002           2003            2004          2005           2006             2007            2008             2009            2010



Figure 124. The dynamics of revenues of the postal and courier services market in 2002–2010, LTL million
Source: RRT



          In terms of revenues the structure of the postal and courier services market changed
insignificantly. In 2010 the market structure did not change: as in 2009 the greater, i. e. 56.8 per cent
share of the revenues of the postal and courier services market were the revenues from courier services


                                                                                                                                             101
                                                                            Lithuanian Communications Sector 2010

(see Figure 125). The growth of the revenues reached 5.6 per cent in 2010. The growth of revenues from
the postal services market in 2010 was similar, i. e, by 5.4 per cent, the revenues amounted to LTL 103
million.




           47.1 %           46.7 %             41.0 %              38.1 %            43.2 %         43.2 %



           52.9 %           53.3 %             59.0 %              62.0 %            56.8 %         56.8 %


         2005                 2006             2007                2008              2009            2010
   Revenues from courier services  Revenues from postal services

Figure 125. The structure of the postal and courier services market in terms of revenues in 2005–2010, per
cent
Source: RRT




           Universal services


           All the EU Member States, except Germany, ensure the provision of universal services, by
appointing the provider of universal services, which is obliged to provide the universal services. In
Germany the situation is unique, as no provider of universal services is appointed and, according to the
Postal Law, the universal services must be provided by all the providers of postal services in Germany
and the regulator’s intervention is possible only in case of a situation, where the market itself fails to
                                                                                                             4
ensure the provision of universal services. It is worth noting that no such situation has occurred yet .
           In Lithuania the universal postal services are provided by Lietuvos Paštas AB, which ensures the
provision of universal services in the entire territory of the Republic of Lithuania on each business day at
                            5
least five days a week . Lietuvos Paštas AB is also granted the reserved area till the complete
liberalization of the postal market on 1 January, 2013. 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
                                                                                         6
the first weight level, established to the provider of the universal postal services .
           Since 2008 the revenues from provision of universal services, received by Lietuvos Paštas AB
have been reducing, however the drop is not significant: compared to 2008, in 2009 it amounted to 0.8
per cent and the revenues reached LTL 85.9 million and in 2010, compared to 2009 – 0.2 per cent and
the revenues dropped to LTL 85.8 million. The average annual growth of the universal services revenues
during the time period of 2005–2010 reached 4.6 per cent and the average revenues amounted to LTL
81.3 million.
           The growth of reserved services in 2005–2010 amounted to 37.9 per cent, as the revenues grew
from LTL 38.4 million up to LTL 52.9 million. The average annual growth of the reserved postal services
revenues during the period amounted to 9.7 per cent and the average annual revenues were LTL 45.1
million.




                                                                                                                 102
                                                                                     Lithuanian Communications Sector 2010


                                                                                                                 48.5 %
   90                                                                                                                             50%
                                       28.5 %                             86.7              85.9             85.8
                                78.8                  82.1                                                                        25%
   60         68.8                                      4.2 %               5.5 %                                -0.2 %
                                                                                             -0.8 %
                              14.5 %                                                                                              0%
                                                       -4.6 %              1.3 %           -25.1 %
   30
                                                                                                                                  -25%
                 38.4               49.3                  47.0               47.6               35.6                52.9
    0                                                                                                                             -50%
                2005             2006                    2007              2008              2009                 2010

        Universal services revenues                              Reserved postal services revenues
        Grow th of universal services revenues                   Grow th of reserved postal services revenues
Figure 126. The universal services and reserved postal services revenues, LTL million and the growth, per
cent in 2005–2010
Source: RRT



         In 2010 the largest share in the structure of universal services revenues, i. e. 51.1 per cent was
occupied by the revenues from items of correspondence, weighing 2 kg or less. However the share of the
revenues in the total structure of the universal services revenues market also reduced most in 2010, i. e.
by 2.3 percentage points and the reduction of the market share during the time period of 2006–2010
amounted to 24.6 percentage points. In 2010 the share of registered postal items grew most, i. e. by
3.4 percentage points (the growth during the time period of 2006–2010 reached 21.8 percentage points)
(see Figure 127).
         In terms of money, during the time period of 2006–2010 the revenues for the postal parcels,
weighing more than 10 kg and 20 kg or less reduced the most, i. e. 91.6 per cent (from LTL 1.5 million
down to LTL 0.1 million). The revenues from evaluated postal items reduced by 51.4 per cent (from LTL
0.57 million down to LTL 0.28 million) the revenues from items of correspondence, weighing 2 kg or less
reduced by 26.5 per cent (from LTL 59.6 million down to LTL 43.8 million). During the same period the
revenues from the postal parcels, weighing 10 kg or less grew the most, i. e. 2.5 times – from LTL
3.1 million to LTL 7.7 million. The growth of the revenues from the registered postal items was not
smaller, which, during the time period of 2006–2010 reached 2.4 times, i. e. from LTL 13.9 million to LTL
33.9 million.


                                                                  0.3 %                                           0.2 %
 2010                            51.1 %                                                   39.5 %                                  8.9 %
                                                                    0.4 %                                        1.4 %
 2009                              53.5 %                                                 36.1 %                                  8.7 %
                                                                                  0.3 %                                   1.0 %
 2008                                      62.9 %                                                  32.4 %                         3.4 %
                                                                                           0.3 %                          1.1 %
 2007                                           71.2 %                                                  24.8 %                    2.6 %
                                                                                                0.7 %                2.0 %
 2006                                               75.7 %                                               17.7 %                   3.9 %


    Items of correspondence, w eighing 2 kg or less                    Evaluated postal items
    Registered postal items                                            Postal parcels, w eighing more than 10 kg and 20 kg or less
    Postal parcels, w eighing 10 kg or less

Figure 127. The structure of universal services according to the revenues from the sent and received postal
items in 2006–2010, per cent
Source: RRT




                                                                                                                                       103
                                                                         Lithuanian Communications Sector 2010

        The items of correspondence, weighing 2 kg or less occupy the largest share in the structure of
universal services in terms of the amount of sent and received postal items. During the time period of
2006–2010 the share of such items reduced by 4.2 percentage points and amounted to 83.9 per cent.
The share of registered postal items grew by 3.4 percentage points during the same time period and the
share of postal parcels, weighing 10 kg or less – by 0.9 percentage points. The shares of evaluated
postal items and the postal parcels, weighing more than 10 kg and 20 kg or less in the overall structure of
universal services changed insignificantly (see Figure 128). In terms of quantity, in 2006–2010 the
volumes of postal parcels, weighting more than 10 kg or 20 kg or less reduced the most, i. e. by 47.2 per
cent (from 5.2 thousand down to 2.7 thousand). The volumes of evaluated items of correspondence,
weighting 2 kg or less, reduced by 35.7 per cent (from 12.8 thousand down to 8.3 thousand), the volumes
of items of correspondence, weighting 2 kg or less, reduced by 13.2 per cent (from 48.6 million down to
42.2 million). During the same period the volumes of postal parcels, weighing 10 kg or less grew the
most, i. e. 4.8 times, from 110.4 thousand to 533.9 thousand. The growth of registered postal items in
2006–2010 reached 17.1 per cent, i. e. from 6.5 million to 7.6 million.



                                                                                            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, w eighing 2 kg or less             Evaluated postal items
    Registered postal items                                     Postal parcels, w eighing more than 10 kg and 20 kg or less
    Postal parcels, w eighing 10 kg or less


Figure 128. The structure of universal services in terms of the amount of sent and received postal items in
2006–2010, per cent
Source: RRT



        Compared to the tariffs of universal postal services, established in the EU Member States, the
tariff (EUR 0.45) of a domestically sent priority letter of the first weight level (20 g) (domestic standard
                     7
letter) in Lithuania which remained unchanged since 2007 was 8.2 per cent lower than the EU average
(EUR 0.49) in 2010 and 13.5 per cent lower than the EU average (0.52 EUR) in 2010. In 2010 the tariff
                                                                                                                       8
was increased in 15 EU Member States and was reduced in Finland only (the regulator‘s initiative) . In
2010 the largest tariff for a domestic standard letter was in Denmark (EUR 1.07) and the smallest tariff
was in Malta (EUR 0.19) (see Figure 129). In Lithuania in 2009–2010 the tariff of sending a priority letter
of the first weight level (20 g) in Europe (letter mail within Europe) reached EUR 0.71 EUR and in 2009
was 9 per cent and in 2010 – 14.5 per cent lower than the EU average, which correspondingly reached
0.78 EUR and 0.83 EUR. In 2010 the tariff was increased in 17 EU Member States and was reduced, as
the tariff for domestic standard letter only in Finland. Compared to 2009, in 2010, with a significant
increase of the tariff for letter mail within Europe in most European Union Member States, in Lithuania,

                                                                                                                        104
                                                                                     Lithuanian Communications Sector 2010

which had not changed the tariff since 2007, the tariff was the seventh lowest in the EU Member States
   th
(14 lowest in 2009). As in 2009, in 2010, the highest tariff for letter mail within Europe remained in
Portugal (1.85 EUR) and the lowest was in Malta (0.37 EUR) (see Figure 130).



          Denmark                                                 1.07             Portugal                                              1.85
                       0.74                                                                    1.85
                                                           0.75                    Denmark                                        1.48
            Finland    0.80                                                                    1.14
                                                          0.71                      Sweden                                 1.26
           Belgium     0.69                                                                    1.13
                                                    0.63                           Belgium                          1.03
           Sweden      0.56                                                                    1.00
                                                   0.62                            Slovakia                         1.00
            Austria    0.55                                                                    1.00
                                                   0.60                            Slovenia                     0.92
               Italy   0.60                                                                    0.80
                                                   0.60                            Hungary                     0.87
           Slovakia    0.60                                                                    0.82
                                                   0.60                       Luxembourg                      0.85
            Greece     0.58                                                                    0.70
                                                   0.60                              EU 27                    0.83
        Luxembourg                                                                             0.78
                       0.50                                                                                   0.82
            France                             0.58                                  Ireland   0.82
                       0.56                                                                                  0.79
                                              0.56                                The UK 0.67
             Latvia    0.56
                                                                          The Netherlands 0.77               0.79
            Ireland                           0.55
                       0.55                                                                                  0.79
                                              0.55                         Czech Republic      0.64
          Germany      0.55
                                                                                      Latvia                 0.77
           The UK                            0.54                                              0.77
                       0.46                                                                                  0.77
                                             0.52                                   Bulgary    0.77
             EU 27     0.49
                                                                                       Italy                 0.75
           Bulgaria                         0.51                                               0.65
                       0.46                                                                                  0.75
                                            0.49                                    Greece     0.72
            Poland     0.45
                                                                                     France                  0.75
                                        0.47                                                   0.70
           Portugal    0.47                                                                                  0.75
                                        0.46
                                                                                    Finland    0.80
 The Netherlands       0.44                                                                                  0.75
                                                                                   Germany     0.70
          Lithuania                    0.45
                       0.45                                                          Poland                  0.75
                                      0.42                                                     0.69
           Hungary     0.37                                                                              0.71
                                                                                   Lithuania   0.71
  Czech Republic                     0.39
                       0.38                                                          Austria             0.70
                                     0.38                                                      0.65
          Romania      0.38                                                                             0.65
                                                                                      Spain    0.64
           Estonia               0.35
                       0.35                                                         Estonia            0.58
                                 0.35                                                          0.58
             Spain                                                                                    0.51
                       0.34                                                         Cyprus     0.51
                                0.34
            Cyprus     0.34                                                        Romania            0.50
                                                                                               0.49
           Slovenia           0.27                                                               0.37
                       0.26                                                           Malta    0.37
             Malta       0.19
                       0.19
                                                                            2009     2010
   2009      2010

Figure 129. The nominal price for domestic standard                      Figure 130. The nominal price for letter mail within
letter in the EU Member States in 2009–2010, EUR                         Europe in the EU Member States in 2009–2010
Source: Deutsche Post                                                    Source: Deutsche Post



           In order to able to more impartially evaluate the letters price changes, it is viable also to compare
them taking into consideration the inflation rates, because the nominally unchanged letter price decreases
in real terms every year due to inflation. Italy, Estonia, Germany, Portugal and Sweden were the only EU
Member States, where the decrease of the inflation-adjusted change in letter prices was monitored in
2000–20109. In Lithuania the 15 per cent growth of the inflation-adjusted change in letter prices was
observed, however the attention should be drawn to the fact that the tariff was 2.4 times lower than the
EU average during the period in question, which reached 35.6 per cent (see Figure 131.)



                                                                                                                                           105
                                                                                                                                                                                              Lithuanian Communications Sector 2010




   155.2 %




                                                                                                                             35.6 %
               120.4 %
                              115.3 %
                                         113.3 %




                                                                                                                                       26.0 %
                                                    96.6 %




                                                                                                                                                                       12.6 %
                                                                                                                                                 16.1 %

                                                                                                                                                           15.0 %
                                                              84.2 %




                                                                                                                                                                                                                                                                                                     -22.3 %
                                                                                                                                                                                                                                                                                          -17.5 %
                                                                        64.4 %




                                                                                                                                                                                                                                                                            -16.8 %
                                                                                  58.1 %
                                                                                           47.5 %




                                                                                                                                                                                            7.3 %
                                                                                                    38.4 %




                                                                                                                                                                                                                                                                 -13.0 %
                                                                                                                                                                                 7.8 %
                                                                                                               37.2 %




                                                                                                                                                                                                      5.5 %
                                                                                                                                                                                                                4.4 %

                                                                                                                                                                                                                          3.5 %
                                                                                                                                                                                                                                  2.3 %

                                                                                                                                                                                                                                           1.4 %

                                                                                                                                                                                                                                                      Sweden %
                                                                                                                                                                                                                                                          -0.6
               Slovakia



                                         Slovenia




                                                                                    Latvia




                                                                                                                                                                                            Malta




                                                                                                                                                                                                                          Luxembourg
                                                    Hungary




                                                                                                                                                                                                                Cyprus




                                                                                                                                                                                                                                                                                                     Italy
                              Bulgaria




                                                              Poland




                                                                                                                             EU 27
                                                                                                                                        Spain

                                                                                                                                                 Ireland

                                                                                                                                                           Lithuania
                                                                                                                                                                       Greece
                                                                                                                                                                                 Finand



                                                                                                                                                                                                      France




                                                                                                                                                                                                                               Austria




                                                                                                                                                                                                                                                                                          Estonia
                                                                                                                                                                                                                                                                 Portugal
                                                                                   The UK
                                                                                  Republic




                                                                                                                                                                                                                          Netherlands




                                                                                                                                                                                                                                                                            Germany
    Romania




                                                                                                               Belgium
                                                                        Denmark


                                                                                   Czech




                                                                                                                                                                                                                              The
Figure 131. Inflation-adjusted change in letter prices in the European Union in 2000–2010, per cent
Source: Deutsche Post



                       When analyzing the quality of the service, provided by the universal services provider, one should
take into consideration both the indicators of timely delivery of postal correspondence and the
characteristics of the postal services provision network (the number of postal outlets and the number of
mail boxes). All the said indicators form the totality of the quality of universal postal services.
                       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 standard, which is
applicable in all the states, except Spain. According to the data of consultancy company Copenhagen
                                   10
Economics , in 2009 the largest number of domestic priority mail, delivered on the next day was in
Luxembourg (98 per cent) and the smallest was in Romania (46 per cent) and in Poland (52 per cent).
Lithuania is significantly behind the EU average, which reached 86 per cent (see Figure 132).
 98%

              97%

                          96%

                                         95%

                                                    95%

                                                              95%

                                                                         94%

                                                                                   94%

                                                                                             94%

                                                                                                       94%

                                                                                                                  93%

                                                                                                                                93%

                                                                                                                                            93%

                                                                                                                                                      92%

                                                                                                                                                                   92%

                                                                                                                                                                                91%

                                                                                                                                                                                          90%




                                                                                                                                                                                                                                                                                                        46%
                                                                                                                                                                                                    87%




                                                                                                                                                                                                                                                                                            52%
                                                                                                                                                                                                               86%

                                                                                                                                                                                                                         85%

                                                                                                                                                                                                                                  85%

                                                                                                                                                                                                                                           84%

                                                                                                                                                                                                                                                      84%

                                                                                                                                                                                                                                                                 80%

                                                                                                                                                                                                                                                                              75%
 Luxembourg

              Latvia

                          Slovakia



                                                    Sweden




                                                                                                       Malta



                                                                                                                                 Slovenia




                                                                                                                                                                   Hungary



                                                                                                                                                                                          Italy

                                                                                                                                                                                                    Cyprus
                                         Austria




                                                                                                                   Finland



                                                                                                                                            Estonia




                                                                                                                                                                                                                                  France

                                                                                                                                                                                                                                           Bulgaria

                                                                                                                                                                                                                                                      Ireland

                                                                                                                                                                                                                                                                  Greece

                                                                                                                                                                                                                                                                              Lithuania

                                                                                                                                                                                                                                                                                            Poland
                                                                                                                                                                                                               EU 26*
                                                                            Portugal




                                                                                                                                                                                                                         The UK
                                                                           Germany

                                                                         Netherlands




                                                                                                                                                                   Republic




                                                                                                                                                                                                                                                                                                        Romania
                                                                                                                                                      Belgium
                                                              Denmark




                                                                                                                                                                    Czech
                                                                             The




* Spain does not have a defined D+1 standard
Figure 132. Transit time performance of domestic priority mail according to D+1 standard, in European Union
Member States in 2009, per cent
Source: Copenhagen Economics


                                                                                                                                                                                                                                           11
                       According to the data of the survey, performed by the IPC association , the quality of postal
services in Europe in 2010, for the thirteenth year in a row exceeded the foreseen targets to have 85 per
cent of letters, sent inside the EU, delivered on the third business day following the dispatch and 97 per
cent – on the fifth business day following the dispatch, established in the EU. In 2010 in 34 European
                          i
countries 91.7 per cent of priority international letters were delivered on the third business day following



i
  The study was performed in the 27 EU Member States, as well as in Iceland, Croatia, FYR Macedonia, Switzerland, Turkey and in
a part of Bosnia and Herzegovina.

                                                                                                                                                                                                                                                                                                         106
                                                                                           Lithuanian Communications Sector 2010

the dispatch and 97.6 per cent – on the fifth business day following the dispatch and the average time
period of delivery was 2.3 days.
                                                                                                                                                   12
          According to the quality requirements to the universal postal services, established in Lithuania ,
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 2010 RRT, upon performing an independent annual audit of the quality of the
universal postal services, provided by Lietuvos Paštas AB, established that 74.3 per cent of all the priority
items of correspondence were delivered by Lietuvos Paštas AB on the next business day (74.6 per cent
in 2009), i. e. 10.7 percentage points less than the established quality indicator (see Figure 133). The
indicator of delivering a letter on the third business day, following the dispatch reached 98.9 per cent and,
as in the previous years, exceeded the established quality indicator (see Figure 134).


 100%                                                                 -5%     100%                                                               3%
                                         -9.4 %
                                                   -10.4 %-10.7 %                                                            2.1 %
        -12.2 %                                                                                                    1.9 %               1.9 %
                                                                                     1.8 %
                                                                               98%                                                               2%
                    -17.2 %
                                                                      -15%
                                                                               96%             0.6 %                                             1%
  50%

                                                                               94%                                                               0%
                              -27.2 %                                 -25%
                                                                                                         -1.3 %

                                                                               92%                                                               -1%
           72.8 %


                     67.8 %


                                57.9 %


                                          75.6 %


                                                    74.6 %


                                                             74.3 %




                                                                                      98.8 %


                                                                                                97.6 %




                                                                                                                    98.9 %


                                                                                                                              99.1 %
                                                                                                          95.7 %




                                                                                                                                        98.9 %
   0%                                                                 -35%     90%                                                               -2%
          2005      2006       2007      2008       2009     2010                    2005      2006      2007      2008      2009      2010
        The percentage of the delivered letters                                      The percentage of the delivered letters
        Deviation from the standard
                                                                                     Deviation from the standard

Figure 133. The percentage of letters, delivered on                          Figure 134. The percentage of letters, delivered on
the business day following the dispatch (D+1) in                             the third business day following the dispatch (D+3)
2005–2010                                                                    in 2005–2010
Source: RRT                                                                  Source: RRT



          According to the data of Copenhagen Economics13, in 2009 Bulgaria, Ireland and Romania had
the largest number of postal outlets per 10 000 residents, thus the best developed network of postal
services among the EU Member States. The smallest indicator was in Spain, Belgium and the
Netherlands (see Figure 135). In Lithuania the indicator reached 2.6 and was to a certain extent higher
than the EU average, which was 2.3 per 10 000 residents.




                                                                                                                                                 107
                                                                                                                                                                                              Lithuanian Communications Sector 2010




 4.1

             4.0

                         3.5

                                 3.3

                                           2.8

                                                    2.7

                                                               2.7

                                                                           2.7

                                                                                    2.7

                                                                                                  2.7

                                                                                                              2.6




                                                                                                                                                                                                                                                                                                  0.7
                                                                                                                           2.5

                                                                                                                                       2.5

                                                                                                                                                      2.3

                                                                                                                                                              2.3

                                                                                                                                                                          2.3

                                                                                                                                                                                    2.2

                                                                                                                                                                                             2.1

                                                                                                                                                                                                       2.0

                                                                                                                                                                                                                 1.9

                                                                                                                                                                                                                           1.5

                                                                                                                                                                                                                                       1.5

                                                                                                                                                                                                                                                 1.5

                                                                                                                                                                                                                                                          1.4

                                                                                                                                                                                                                                                                         1.4

                                                                                                                                                                                                                                                                                   1.3

                                                                                                                                                                                                                                                                                          1.3
                                                    Slovenia



                                                                           Latvia



                                                                                                   Slovakia




                                                                                                                                       Luxembourg




                                                                                                                                                                           Sweden




                                                                                                                                                                                                                                                 Malta
                                                               Hungary




                                                                                                                                                               Italy




                                                                                                                                                                                                                                                          Cyprus
 Bulgaria

             Ireland




                           France




                                                                                                               Lithuania

                                                                                                                           Estonia



                                                                                                                                                      EU 27




                                                                                                                                                                                    Poland

                                                                                                                                                                                             Finland

                                                                                                                                                                                                       Austria




                                                                                                                                                                                                                                                                             Greece




                                                                                                                                                                                                                                                                                                   Spain
                                                                                     Portugal




                                                                                                                                                                                                                  The UK
                          Republic




                                                                                                                                                                                                                           Germany




                                                                                                                                                                                                                                                                         Netherlands
                          Romania




                                                                                                                                                                                                                                                                            Belgium
                                                                                                                                                                                                                                       Denmark
                           Czech




                                                                                                                                                                                                                                                                             The
Figure 135. The number of post outlets per 10 000 residents in the EU Member States in 2009
Source: Copenhagen Economics



                       During the time period of 2005–2010 the number of stationary post offices in Lithuania reduced
by 22.9 per cent, in 2010 the reduction amounted to 1.5 per cent. The number of mobile post offices grew
4.7 times in 2005–2010. Compared to 2009, in 2010 the number of mobile post offices remained
unchanged (see Figure 136).



                         6                                               6                                                    10                                                    16
                                                                                                                                                                                                                                     28                                              28
                       940                                          934                                                      901                                                    862                                              736                                            725

               2005                 2006                                                                           2007                 2008                                                                                    2009                                                2010
             Number of stationary post outlets                                                                  Number of mobile post outlets
Figure 136. The number of stationary and mobile post outlets of Lietuvos Paštas AB in 2005–2010
Source: RRT


                                                                                                                                                                             14
                       According to the data of Copenhagen Economics , in 2009 the largest number of mail boxes per
10 000 residents among the EU Member States was in Sweden and Luxembourg, i. e. 27 and 26
correspondingly. In 22 studied EU Member States the number of mail boxes per 10 000 residents on
average reached 13.5. The attention should be drawn to the fact that the indicator of mail boxes coverage
is the lowest in Lithuania and in Bulgaria – in 2009 there were only 7 mail boxes per 10 000 residents
(see Figure 137).
     27.0

                  26.0

                               24.0

                                           21.0

                                                     21.0

                                                                  19.0

                                                                                19.0

                                                                                                15.0

                                                                                                              15.0

                                                                                                                            15.0

                                                                                                                                            15.0

                                                                                                                                                          15.0

                                                                                                                                                                       EU 22 13.5

                                                                                                                                                                                    12.0

                                                                                                                                                                                              12.0

                                                                                                                                                                                                           11.0

                                                                                                                                                                                                                       10.0

                                                                                                                                                                                                                                     9.0

                                                                                                                                                                                                                                                 9.0

                                                                                                                                                                                                                                                           Romania 8.0

                                                                                                                                                                                                                                                                          8.0

                                                                                                                                                                                                                                                                                     7.0

                                                                                                                                                                                                                                                                                                7.0
                                                                                Denmark
                                                                  The UK




                                                                                                                                            Germany
                                                                                                                            Portugal



                                                                                                                                                          Belgium
                  Luxembourg




                                                     Estonia




                                                                                                Ireland




                                                                                                                                                                                    Malta

                                                                                                                                                                                              Poland




                                                                                                                                                                                                                                                 Greece
                                         Republic




                                                                                                                                                                                                                       Italy

                                                                                                                                                                                                                                     Hungary
                                                                                                                                                                                                       Netherlands
                                                                                                              Slovenia




                                                                                                                                                                                                                                                                          Latvia

                                                                                                                                                                                                                                                                                     Bulgaria

                                                                                                                                                                                                                                                                                                Lithuania
                               Austria
    Sweden




                                          Czech




                                                                                                                                                                                                          The




* Spain, Cyprus, France, Slovakia and Slovenia did not provide the data.
Figure 137. The number of mail boxes per 10 000 residents in the EU Member States in 2009
Source: Copenhagen Economics



                       During the last six years the number of mail boxes in Lithuania was continuously reducing: during
the time period in question, i. e. in 2005–2010 the reduction amounted to 44.4 per cent. Compared to
2009, in 2010 the number of mail boxes reduced by 3.6 per cent and amounted to 2302. The reduction of
the number of mail boxes amounted to 10.9 per cent each year on average (see Figure 138).

                                                                                                                                                                                                                                                                                                     108
                                                                                    Lithuanian Communications Sector 2010



                                                                                                           -3.56 %
     4000                              -5.60 %                                                                              0%
                                                    -12.15 %             -13.19 %
                                                                                          -19.89 %                          -10%
     3000
                                                                                                            2 302           -20%
                   4 141               3 909         3 434                2 981               2 388
     2000                                                                                                                   -30%
                   2005                2006          2007                 2008                2009          2010
          Number           Change


Figure 138. The number of mail boxes in Lithuania, units and the change, per cent in 2005–2010
Source: RRT


                                                                                                                      15
            Another indicator of quality of universal services, according to Copenhagen Economics , is the
                                                                                                ii
implementation of the postal sector standards EN 14012 and EN 13850 , provided by the European
Committee for Standardization (CEN). In 2009 27 European countries out of the 31 studied ones have
implemented the CEN standards.


                                          iii
            Other postal services

            In 2010 the revenues from other postal services grew almost by 20 per cent, the average growth
of revenues during the time period of 2006–2010 amounted to 7.0 per cent and the average revenues
amounted to LTL 11.7 million (see Figure 139).



                                                               44.68 %
     15                                                                                                                    40%
                                                                                                        19.97 %
     10                                                                              0.06 %                                20%

                                         -36.53 %                                                                          0%
      5
                                                                                                                           -20%
                   12.80                     8.13            11.76                    11.76             14.11
      0                                                                                                                    -40%
                 2006                        2007              2008                   2009              2010*
            Revenues                Change
* Starting from the 3rd quarter of 2010 the revenues for delivering subpoena are included into the revenues, received by Lietuvos
Paštas AB for provision of other postal services.

Figure 139. The revenues of the market of other postal services, LTL million and the growth, per cent, in
2006–2010
Source: RRT



            During the last three years small changes in the structure of the market of other postal services,
in terms of revenues, are observed: 54–59 per cent of the revenues of the market of other postal services
is received by Lietuvos Paštas AB, 41–46 per cent – by other providers of postal and courier services.
Therefore one can state that the market is sufficiently competitive (see Figure 140).




ii
    EN 14012 – Complaints handling principles; EN 13850 – Measuring of the end-to-end transit time of single piece priority mail,
www.lsd.lt;
iii
    When analyzing the market the universal and reserved postal services were excluded in order to get a better view of the
competitive abilities of the incumbent postal operator.

                                                                                                                                109
                                                                                        Lithuanian Communications Sector 2010


   2010                                        59.46 %                                                    40.54 %

   2009                                    54.09 %                                                      45.91 %

   2008                                        58.59 %                                                    41.41 %

   2007                                                  76.95 %                                                      23.05 %

   2006                                                              93.55 %                                                    6.45 %
    Lietuvos Paštas AB            Other providers of postal and courier services
                          rd
* Starting from the 3 quarter of 2010 the revenues for delivering subpoena are included into the revenues, received by Lietuvos
Paštas AB for provision of other postal services.
Figure 140. The structure of the market of other postal services, in terms of revenues in 2006–2010, per cent
Source: RRT



          Courier services


          During 2010 the revenues of the courier services market grew by more than 6 per cent and
amounted to LTL 136.2 million. The average growth of revenues during the time period of 2005–
2010 amounted to 13.4 per cent and the average revenues were LTL 123 million (see Figure 141).



                                      33.4 %
   170                                                   23.6 %                23.7 %                                           40%
   140                                                                                         19.9 %                           30%
   110             78.6                                                                                             6.1 %       20%
    80                                104.8              129.5                 160.2           128.4                136.2       10%
    50                                                                                                                          0%
                  2005                 2006               2007                 2008            2009                 2010
         Market revenues            Growth

Figure 141. The revenues from the courier services market, LTL million and the market growth, per cent in
2005–2010 m.
Source: RRT


          The absolute majority of courier services in 2005–2010 were provided by other providers of
courier services. In 2010 the market share of Lietuvos Paštas AB reduced by 3.9 percentage points (see
Figure 142).


 2010     7,0 %                                                           93.0 %
 2009      10,9 %                                                              89.1 %
 2008      7,9 %                                                           92.1 %
 2007      7,7 %                                                           92.3 %
 2006      8,1 %                                                           91.9 %
 2005      8,9 %                                                           91.1 %
   Lietuvos Paštas AB          Other providers of courier services

Figure 142. The structure of courier services market in terms of revenues in 2005–2010, per cent
Source: RRT



          The volumes of the provided courier services reduced in 2010: the amount of sent items reduced
by 20.6 per cent, the amount of received items of postal correspondence reduced by 4.3 per cent. The
amount of sent items of correspondence, including direct mail, reduced the most, i. e. by 24.2 per cent.
The amount of received items of correspondence, including direct mail, reduced by 10 per cent. The
amount of sent postal parcels reduced by 0.6 per cent in 2010 and the amount of received postal parcels

                                                                                                                                   110
                                                                                      Lithuanian Communications Sector 2010

grew by 11.5 per cent. The total amount of sent and received postal items of correspondence and direct
mail reduced by 23.3 per cent, the total amount of sent and received postal parcels grew by 0.8 per cent.


                    1 089 619
             2010
  Received



                            478 978
                    1 210 226
             2009           429 596


             2010                                13 105 880                                 3 159 399
  Sent




             2009                                             17 293 731                                            3 179 963


             Items of correspondence, including direct mail          Postal parcels

Figure 143. The volumes of courier services, provided in 2009–2010
Source: RRT




               Summary

       In 2010 the number of providers of postal and courier services reduced on the postal and courier
       services market, however the market revenues increased.
       In 2010 an insignificant reduction of the revenues, received from provision of universal services was
       observed however the growth of revenues from other postal services amounted to 20 per cent and the
       revenues from courier services grew by more than 6 per cent. Therefore one can speak of a revival of
       the market.
       According to the data of Deutsche Post, in 2010 the price for a domestic standard letter, established in
       Lithuania was 13.5 per cent lower and the price for letter mail within Europe was 14.5 per cent lower
       than the EU average. The price for a domestic standard letter, even taking into consideration the
       inflation-adjusted changes, was 2.4 times lower than the EU average.


1
    Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010,
http://ec.europa.eu/internal_market/post/studies_en.htm
2
   UNI Post & Logistics, What has postal liberalisation delivered?, A Study on the Liberalisation of the Postal Sector, May 2009,
http://www.protectyourpost.ie/download/pdf/uni_pl_research_on_liberalisation_en.pdf
3
       The     Free    &     Fair     Post   Initiative,    White     Paper    on    Postal     Liberalisation,   November     2010,
http://www.freefairpost.com/pdf/FFPI_WhitePaper.pdf
4
  Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010,
5
  The Postal Law of the Republic of Lithuania ( Official Gazette Valstyb s Žinios, 2004, No. 60-2125)
6
  The Postal Law of the Republic of Lithuania ( Official Gazette Valstyb s Žinios, 2004, No. 60-2125)
7
  Resolution No. 745 of the Government of the Republic of Lithuania “On Setting the Price Caps for the Universal Postal Services”
(Official Gazette Valstyb s Žinios, 2007, No. 80-3262)
8
   Deutsche Post, Letter prices in Europe, March 2011, http://www.dp-dhl.com/content/dam/ueber_uns/publikationen/letter-prices-
europe-03-2011.pdf;            Letter        prices           in        Europe,          March           2010,       https://www.dp-
dhl.com/content/dam/ueber_uns/publikationen/letter_price_survey_03_2010.pdf
9
   Deutsche Post, Letter prices in Europe, March 2011, http://www.dp-dhl.com/content/dam/ueber_uns/publikationen/letter-prices-
europe-03-2011.pdf
10
   Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010
11
    International Post Corporation, Postal service quality in Europe exceeds EU objectives for 13th consecutive year, UNEX 2010
results        on      service      quality      of      international      mail,     Brussels,      25        March     2011      //
http://www.ipc.be/en/Media/News/Press_Releases/UNEX2010.aspx
12
   Order No. 3 - 495 of the Minister of Transport and Communications of the Republic of Lithuania of 12 10 2004 “On the Approval of
the Description of the Requirements for Quality of Universal Postal Services” (Official Gazette Valstyb s Žinios, 2004, No. 157-
5742; 2006, No. 44-1612, No. 84-3318; 2007, No. 91-3670)
13
   Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010
14
   Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010
15
   Copenhagen Economics, Main Developments in the Postal sector (2008–2010), Final Report, 29th November, 2010



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