Road to broadband society: Lithuanian case
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- Leslie Pearl Ferguson
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1 Road to broadband society: Lithuanian case Vaiva Lazauskaitė Communications Regulatory Authority Lithuania Page 1
2 Broadband market: supply and demand Supply side Demand side Infrastructure Investments Coverage Technologies Choice of technologies Services Variety of services offered Ability to pay/ value for money Am I able to pay for equipments and services? Needs Do I need Broadband Internet? End users equipments What equipments do I need? Awareness What do I know about Broadband Internet, its benefits and costs? Page 2
3 Broadband market: infrastructure Investments into e-communications sector are cyclical. The duration, periodicity and ect. of these cycles are determined by many factors: Current infrastructure; Current and potential competition; Technological development; Existing and potential demand; Timing of regulatory decision. Market value Invetsments Role of regulator is limited Dynamics of Lithuanian e-communications market value and investments, mln. EUR, Page 3
4 Broadband market: infrastructure At the end of 2006 the majority of Lithuanian inhabitants and organizations in urban areas had a possibility to receive broadband connection; The coverage of broadband connections in Lithuania, 512 kbps According to the study of the World Bank, in urban areas of Lithuania, 99.8% of the population has potential access to broadband communications. In rural villages and towns with less than 500 inhabitants, only 2% has potential access to broadband. Page 4
5 Broadband market: technologies 100% 75% 50% 25% Fixed broadband technologies in the EU, % of broadband access in Lithuania is provided by technologies other than xdsl; The majority of xdsl access is provided by incumbent operator; % LV CZ EE LT MT AU NL DK HU BE PT SE SK SI IR PL UK ES FI EU LU FR IT DE EL CY Source: EC xdsl 48,44% xdsl Other technologies LAN 12,38% CaTV 17,83% Leased lines 0,42% Optics 14,28% Wireless 6,64% Broadband technologies in Lithuania, 2006 Since June mobile operators started to employ HSDPA (High-Speed Downlink Packet Access) technology; Deployment of wireless broadband networks are expected in the near future. Till the end of this year 3,5GHz licenses is going to be issued. Page 5
6 Broadband market: services Variety of market players and services: 114 market players offer broadband internet services in Lithuania; 10 CaTV operators offer triple play services (voice + internet + CaTV); Incumbent operator offers triple play (voice + internet + IPTV), VoD, entertainments; All 3 operators started commercial launch of 3G services in Besides voice and data services, they offer mobile TV, video calls, entertainments and ect. Competitive DSL price level But EL LV CY DK ES AU IE EU BE MT PL HU SK IT SI CZ UK LU FR DE FI EE NL LT Monthly rentals of DSL-subscriptions of 1Mbps in EU, 2005 Source: Ministry of Transport and Communications. Prices of Broadband Subscriptions in EU-countries Finland. Page 6
7 Broadband market: demand Customers, their willingness and ability to pay for services other side of broadband market Can we expect the rapid growth of broadband penetration, if households are not very much inclined to spend more on communications services? ,50 5,20 5,00 5, ,3 6,95 7,4 8, Answer: customers choice is determined by their needs Monthly expense per one hausehold member, EUR Share in total hausehold expense, % Households spending on communications services m. Source: Statistics Lithuania Page 7
8 Broadband market: demand A big part of households claims that there is no need Other reasons 3,4 Internet is too slow 0,5 Complicated to use 19,7 Unsecured 0,7 No trust 7,4 Extra cost 9,5 No know ledge 6,6 Unsecured 7,4 Unsecured 14,4 Access is too expensive 16,9 No know ledge 5,3 I don't receive the answ er straight aw ay 12,6 Expensive equipments 22,7 Not comfortable 21,4 Need for personal contact 25,5 No need to use Internet at home, I can use elsew here 11,8 No need 33,9 No required services 18,9 No need 66,4 Never used 54,1 No need Reasons why households do not use Internet at home, 2006 Source: Statistics Lithuania Reasons why households do not use e-commerce services, 2006 Reasons why households do not use e-government services, 2006 Page 8
9 Broadband market: demand 80% Inhabitants use PC 70% Inhabitants use Internet 60% 46,7% 50% 41,5% 37,0% 40% 42,0% 30% 34,3% 29,2% 20% 10% 0% Inhabitants using PC and Internet, %, 2006 Source: Statistics Lithuania 51 % Results of study on computer literacy in Lithuania (2005): 15,03% of inhabitants do not know how to use computer; 35,94% of inhabitants has weak competencies; 48,56% of inhabitants thinks that they have good skills, but they do not have any documentation to confirm them. According to the data of Statistics Lithuania, in ,2 % of years old Internet users never attended any computer classes Little knowledge little need little use Page 9
10 Broadband market: outcome ,90% 8,40% 10,90% 12% 10% 8% NL DE FI SE BE UK 26 24,5 21,8 20,4 29,8 29, ,11% 38 1,94% 2,56% ,75% 129 5,00% 2003 I H 2003 II H 2004 I H 2004 II H 2005 I H 2005 II H 2006 I H 2006 II H Broadband subscribers, thousands Broadband penetration,% % 4% 2% 0% LU FR EE DE AU EU ES IT PT SI MT 19, ,2 16,4 16,4 15,7 13,9 13,6 13,5 12,6 12,3 Broadband penetration in Lithuania, IE CZ 10,3 9,6 LV 9,3 LT 9,3 Broadband penetration is growing in Lithuania, but still not fast enough in order to catch up with the average of the EU HU CY PL SK EL 3,3 4,5 4,3 8,6 7, Broadband penetration in the EU, 2006 Page 10
11 To conclude There are several initiatives in Lithuania for broadband promotion: Window to the future alliance. The alliance of business organizations in cooperation with the Ministry of the Interior establishes Public Internet access points across Lithuania for the purpose to reduce the digital divide. Project Rural area information technology broadband network RAIN. Its objective is to provide broadband access for all rural public sector administration institutions, hospitals, laboratories, schools, museums, libraries, public internet access points and for rural residents and business companies as well. Public company Placiajuostis internetas implements the project. But the road to broadband society is bumpy The education of user as well as the creative stimulation of demand seams the only true way out of the current situation. Page 11
12 To conclude Example form Finland Internet buses and mobile libraries with broadband internet access Page 12
13 Thank you Vaiva Lazauskaitė Communications Regulatory Authority, Algirdo 27, Vilnius, Lithuania Phone: vlazauskaite@rrt.lt Page 13
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