Broadband market development in Lithuania EaPeReg BEWG 20-21 February 2017 Tbilisi Eugenijus Žvalionis Deputy director of Strategy Department Communications Regulatory Authority (RRT) Lithuania 2018.11.13

Content Facts & figures Background for FTTH development RAIN projects Current status of broadband market DAE targets and feasibility assessment 2018.11.13

Lithuania – facts and figures Degree of self-governance Unitary state (parlamentary republic) Population 2,9 mln. Population density 47,2 per km2 (EU average – 116,7 per km2 Territory 65,286 km2 Topography Lowlands along the coast and in the central part, south-eastern plain, highlands in the north and the east (Baltic Highlands) Fixed BB incumbent market share Telia Lietuva: 46 % (EU average: 41 %) 2018.11.13

Initial situation and ways to respond Main cities Effective competition High penetration Investments Infrastructure Few investments No infrastructure Rural areas No effective competition Low penetration 2018.11.13

Main factors determined broadband (FTTH) development Infrastructure sharing: Cable TV operators were the first to benefit from open infrastructure Late entrance of incumbent operator into fibre optic networks market; Public intervention - construction of broadband networks in rural areas. 2018.11.13

RAIN projects 1st phase: “Rural areas information technologies broadband network RAIN”, 2005-2008 (RAIN-1): Design and construction of ~ 3400 km of fiber optical lines, 468 rural townships connected to broadband infrastructure and to 51 municipality; Value of the project - 21 million euros, financed by ERDF/LT. 2nd phase: “Development of Rural areas information technologies broadband network RAIN”, 2009-2014 (RAIN-2) Design and construction of 5400 km of fiber optical lines, 950 rural townships to be connected to broadband infrastructure; Value of the project – 60 million euros, financed by ERDF/LT. 2018.11.13

RAIN - 1 2018.11.13

RAIN - 2 2018.11.13

RAIN-2 2018.11.13

PRIP project “Development of broadband network infrastructure in rural areas”, 2013- 2015 (PRIP) Design and construction of fiber optical lines to biggest farms, agricultural institutions and organizations, production and processing enterprises, rural associations, thus connecting them to broadband internet infrastructure (~ 400 entities in 2013- 2015); Value of the project – 5 million euros, financed by European Agricultural Fund for Rural Development (EAFRD)/LT. 2018.11.13

RAIN projects: institutions Information Society Development Committee under the Ministry of Transport and Communications (ISDC) was responsible for administration of the finances of EU structural funds dedicated for development of broadband networks in Lithuania, as well as the body responsible for provision of state aid for the project. Projects were implemented by the Ministry of Transport and Communications of Republic of Lithuania together with partner Public Company “Placiajuostis internetas”. 2018.11.13

RAIN projects: key principles The open access: the built infrastructure may be employed by all operators; technical solutions must allow ensuring this principle. Technological neutrality: the selected technologies should allow all potential users of the network to use the resources of the network freely without restrictions to technical solutions. The selected solutions must optimally promote development of a competitive environment, i.e. the end user should be allowed to freely choose the service provider and services. The infrastructure is constructed only in areas where it doesn’t exist. The selected technical solutions should serve long-term and meet the needs for a period of at least 10 years. 2018.11.13

RAIN projects: financing and ownership Projects were financed by the public intervention: 85 % ERDF (European Regional Development Fund) and 15 % national budget. The infrastructure built during the projects, based on fiber optical lines, is managed by public institution – public, non-profit organization “Placiajuostis internetas” which provides only wholesale services to ISPs. 2018.11.13

RAIN projects: beneficiaries ISPs – „customers“ of “Plačiajuostis internetas“; RAIN infrastructure is made available to all operators on non-discriminatory terms (provide broadband services to end users). End users. The ultimate objective these projects is to provide necessary broadband infrastructure and a wholesale service that enables retail broadband services to end users: Public organizations; Business entities; Inhabitants 2018.11.13

Municipalities are key factor to success While national and EU-wide regulation are normally well known and well defined, municipal regulations and conditions vary widely Necessary to do: simplify regulation and administration; have a future proof plan; to realize, that inhabitants and local companies are your customers 2018.11.13

RAIN projects: results In 2005, only 2% of townships /villages - with less than 3 000 inhabitants - had broadband; Only 4.9% of rural households were connected. Through the combination of RAIN and PRIP: 58.4% of households had internet access by 2015; in other words, 12 times more than in 2005. 2018.11.13

Broadband access for Lithuanian libraries Project “Libraries for Progress”: Goal: to use the potential of public libraries in order to provide Lithuanian people – especially in rural areas and social risk groups – improved possibilities to use information technologies for their work and communication; Activities: in all public libraries, public internet access is provided/modernised; librarians are trained in digital literacy skills; training courses for local community members are being organised; Years: 2008-2012; costs – 27 million euros. During 1st stage of RAIN Project, 300 public libraries were connected to broadband access; during 2nd stage – 524 libraries are being connected. 2018.11.13

European Broadband projects 48 projects were in competition for the first edition of the European Broadband Awards. Five winners of the best European Broadband projects have been awarded in Brussels. The 5 winning projects - from Germany, Lithuania, the Netherlands, Spain and Sweden. Günther H. Oettinger, the European Commissioner responsible for the Digital Economy and Society awarded the winners of the 2015 Broadband Awards in Brussels 2018.11.13

High level of infrastructure-based competition. Current status of Broadband market number of subscribers by broadband technologies (% of broadband internet users) High level of infrastructure-based competition. 2018.11.13

Willingness to pay and affordability 11.56 EUR - broadband (fiber) internet access up to 100 Mbps; Lattelecom: Cena no €17.50/mēn. •Интернет с максимальным выбором скорости oт 10 до 400 Мбит/с. atene KOM Agency for Communication, Organization and Management 2018.11.13

EUROPEAN RANKING – end September 2016 2018.11.13

GLOBAL RANKING – END SEPTEMBER 2016 2018.11.13

DESI (Digital Economy and Society Index) 2018.11.13

National Broadband Plan of Lithuania: key facts Main strategic document(s): Plan for the Next Generation of Internet Development for 2014 – 2020 in the Republic of Lithuania (adopted in 2014) Targets: 100 % coverage with 30 Mbps by 2020 50 % HH penetration of 100Mbps services by 2020 Identical to DAE-Targets: Yes 2018.11.13

Feasibility Assessment Target 2016 100 % coverage with 30 Mbps 85 % high probability 50 % of households subscribing to 100 Mbps or more by 2020 13 % medium probability 2018.11.13

Conclusions Electronic communications sector demonstrates positive trends. Broadband networks in Lithuania are highly advanced. Level of infrastructure-based competition is very high. Further actions: Implementation of Broadband Cost reduction directive; National NGA development project -building of ~ 500 telecommunications masts, further development of fiber optical networks. 2018.11.13

Thank you eugenijus.zvalionis@rrt.lt 2018.11.13