28 Apr 2010Lithuania Broadband Overview

Despite deregulation, the incumbent TEO (previously known as Lietuvos Telekomas) continues to dominate the telecommunications market in Lithuania. The operator has retained its monopoly not only due to technological innovation, but also due to exclusive rights awarded by the State. The Law on Telecommunications passed by the Lithuanian government on 9 June 1998 contains a clause which granted TEO the exclusive right to provide fixed telephone services until 31 December 2002. Since then, privatisation and deregulation of the telecoms market appears to have had some positive impact but this is by no means strong enough to sufficiently undermine the incumbent’s market dominance.

By 31 December 2007 two agreements for LLU service provision were signed, and TEO was providing fully unbundled access to 443 local loops. As of Q309, 48 companies provided fixed public telephony services, of which 32 were using IP and 15 were using cable television networks. However, TEO still had the largest share of the fixed telephony market.

At the end of Q309, there were 751,922 fixed lines including ISDN channels, down by 4.5 per cent on the same period last year. TEO owned 731,478 fixed lines while the other operators shared the remaining 20,444 lines. Fixed line population penetration was 22.5 per cent. The country continued developing telecommunications infrastructure but at a slower pace than a year ago. In Q3 2009, investment in this area totalled LTL 63.5 million, down by 17.4 per cent since Q3 2008.

The incumbent Lietuvos Telekomas (LT) was registered as a state-owned company on 6 February 1992 and subsequently privatised one month after the Law on Telecommunications was passed. As part of the privatisation, TeliaSonera acquired a 60 per cent stake in LT for USD 510 million and in April 2006 the operator changed its name to TEO. All four core activities of TEO have secondary brand names including Vox for voice services, Zebra for Internet, Gala for digital TV and TEO Business for enterprise services.

During 1999 Lietuvos Telekomas installed almost 700 km of fibre-optic cables in the regional and national rings. In April 2001, the company was the first to offer public Internet services on fibre network, followed by a business service launch in 2002. It launched an ADSL service in 2001.

At the end of Q3 2009, there were 4.9 million mobile subscribers in Lithuania, showing a 1.5 per cent annual drop and 148 per cent penetration. About 62 per cent of all subscribers were prepaid. Omnitel dominated the market with a 40.1 per cent share, followed by Tele2 (38.4 per cent) and Bite Lietuva (19.2 per cent). In addition, the country had 4 MVNO operators using Bite’s network. By 30 September 2009, there were 154,700 mobile broadband subscribers using PCs to get online. Over a half (61 per cent) were Omnitel subscribers.

In February 2006, the three mobile operators were awarded 3G licences. Bite Lietuva launched its HSDPA network in June 2006. Omnitel, 100 per cent owned by TeliaSonera, launched its 3G service in summer 2006 in 8 Lithuanian cities. In July 2006, Tele2 started deploying a nationwide 3G network. At the end of 2009, Omnitel’s 3.5G network covered 77.17 per cent of the population.