3 Apr 2009Lithuania 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. Also by December 2007, 48 companies provided fixed public telephony services, of which 32 were using IP and 14 were using cable television networks. However in Q3 2008, TEO still had the largest share of the fixed telephony market.

At the end of Q308, there were 787,570 fixed lines including ISDN channels, down by 1.6 per cent on the same period last year. TEO owned 771,570 fixed-lines while the other operators shared the remaining 16,000 lines. Fixed line population penetration was 23.5 per cent. The country continued developing telecommunications infrastructure and in Q4 2008 investment in this area totalled LTL 123 million.

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 LT. 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 optical 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 Q4 2008, there were over 5 million mobile subscribers in Lithuania. The mobile communications market grew by 2 per cent compared to the same period a year before. Mobile penetration rate was 149.9 per cent. In terms of subscribers, in Q308 Omnitel dominated the market with a 39.3 per cent share, followed by Tele2 (38.2 per cent) and Bite Lietuva (20.1 per cent). By 31 December 2008, the number of active mobile subscribers who used UMTS services reached 352,000, representing a 47 per cent increase on the previous quarter.

In February 2006, the three operators were awarded 3G licences. Bite Lietuva launched its HSDPA network on 7 June 2006. Omnitel, 100 per cent owned by TeliaSonera, launched its 3G service in summer 2006 in 8 Lithuanian cities initially. In July 2006, Tele2 started deploying a nationwide 3G network. In Q408 Omnitel announced that its 3G subscribers reached 100,000.