The political will to improve the situation in the area of telecommunications and ICT does exist in Macedonia and is getting stronger, judging from the announcements made by the new Government that the Law on Information Society is in the process of being adopted, but also from the intention to establish a Ministry of Information Society, expected to become operational by the end of this year. At the E-Society regional conference that took place just ten days ago, Minister of Transport and Communications Mile Janakievski announced a number of projects that will be implemented next year, including a project to secure free computers for Macedonian schools.
In terms of increased competition in telecommunications sector in the country, the Agency for Electronic Communications (AEC) opened, on October 30, 2006, the international public tender competition for third mobile telephone operator which, if all goes as expected, will lead to dramatic fall of prices of services and liberalization of the mobile telephone services market. A total of 13 companies have applied at the competition for distribution of frequencies. The third mobile operator is planned to start working by the end of June 2007.
Also, after many false announcements of intentions, the “Macedonian Telecommunications” Co Ltd. will get a true competition in On.net, an internet provider that will, officially, move into fixed telephone services. On.net plans to offer its first telephone lines on January 24, 2007. The new operator will provide the citizens of Macedonia with cheaper international, long-distance and local calls, as well as calls towards the mobile networks in the country. A number of packages with various services will be used. At the moment, however, it is not known whether the users that decide to move over to On.net will have to pay a monthly subscription fee.
The main obstacle to the entry of another operator in the fixed telephone services sector, to compete with the “Telecom”, lies in the concession agreement that secured exclusive rights (i.e. monopoly) to the “Macedonian Telecommunications” Co (MT). According to the Concession Agreement, MT’s monopoly should have ended on December 31 2004. Nonetheless, due to the delays in the procedure to adopt the Law on Electronic Communications, which was adopted in March 2006, the liberalization of the market was delayed for almost two years.
The telecommunication companies complain of the high prices the Telecom charges to connect to its network. The Telecom, by the way, has monopoly on the interconnection prices by the end of 2018. As in other European countries, the interconnection agreements are the fundamental requirement to enable development of effective competition in Macedonia, as it has direct impact on the prices paid by the telecommunication services’ users now and in the future. Recently, America joined Europe in the recommendations to provide fair conditions in the market. With the goal to facilitate and accelerate the liberalization of telecommunications market, the Government ordered AEC to complete, by December 15 of this year, a detailed review of the existing referent offer for interconnection, in which the prices will be based on actual operational costs and will be lower than the retail prices offered by Macedonian Telecommunications to its end users.
Infrastructure
The existing infrastructure in the Republic of Macedonia includes the fixed public telecommunication networks, the public mobile telecommunication networks, and the networks that offer internet access and transfer of other telecommunication signals. The fixed public telecommunications network of the “Macedonian Telecommunications”, company with dominant private capital structure (51% of the company is owned by the Hungarian “Matav”) is based on 100% digital telephone exchange facilities. In addition to transfer of voice and data, it offers a variety of other services (voice mail, conference calls, emergency lines, 0800 (green) numbers, 08xy (blue) numbers, pre-paid cards, etc. The number of users of fixed telephone lines is approximately 525,000, according to Commission on Information Technology (KIT).
Internet services in Macedonia were liberalized in October 1997, when concessions on transfer of data were issued, resulting in a fact that today we have five important internet providers in the country. The estimates on the number of internet users vary, from 5% of the population according to the Ministry of Transport and Communications, 18% according to the National Bureau of Statistics, all to way to 27%, a figure listed in the survey “Internet and Computer Use in the Republic of Macedonia”, conducted by the USAID (note: 8% of all internet users started using the web in the past six months). Our attempt to get more concrete information from AEC failed. We were told that the information is owned by the operators, that it is considered highly confidential information that should not be released in public.
Although the number of internet users in Macedonia remains low, there are visible results of the implemented activities listed in the Information Society Action Plan, adopted together with the Information Society Strategy. Several important projects in the area of e-government, e-business, e-education and e-citizens were implemented:
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connecting all elementary and secondary schools with broadband internet (550 schools included, funded by USAID);
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www.piom.com.mk - electronic submission of MPPP Form to the Retirement and Pensions fund (all active companies in Macedonia are included>;
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www.emarketplace.org.mk (portal dedicated to companies that want to promote their services on the internet);
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www.ads.gov.mk Electronic submission of employment applications for positions with the Agency for Administrative Employees;
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Internet access points for the citizens in eight municipalities in Macedonia, each point is equipped with 10 computer terminals and fast connection;
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www.mchamber.org.mk - 220.000 visits in 2005 to the website of the Chamber of Commerce;
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E-government services were introduced on the portal www.uslugi.gov.mk (61,857 visits, 43,458 visitors, 134,570 pages opened and 1,279,676 hits);
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Transparent publication of conclusions and decisions adopted by the Government of the Republic of Macedonia.
The use of basic communications infrastructure by the units of local self-government remains at minimal level. Of the total of 124 mayors, e-mail was used by 44; only 23 of them had web-site (in percentage points, 35.4% used e-mail and less then 18% promoted their policies and activities on a web-site). This is due primarily to the fact that computer literacy in Macedonia remains at extremely low levels. KIT estimates that, at this time, there are about 6,000 ADSL user lines in Macedonia, mostly contracted by legal entities, i.e. firms of different types.
The small number of internet users in the population results from the high prices of broadband services. The prices of ADSL connection move in the range from 25 to 40 EUR, depending on the speed and traffic limits, while the dial-up connection is extremely expensive. The cable operators offer cable internet, with prices depending on the speed of connection and download capacity, moving between 10 and 20 EUR for 1GB download limit at speed of 512 Mbs.
Two companies hold concessions for mobile telephone services – “Cosmofon” and “Mobimak” (recently re-branded as “T-mobile Macedonia”, becoming the 10th member of T-mobile International. The total number of users of mobile telephones in Macedonia is approximately 776,000 (KIT data). “Cosmofon” is the second mobile operator, and it competes with T-mobile only in the segment of mobile telephone services. It slowly, but steadily, confirms the advantages of a competitive market both in terms of pricing policies and the range of products on offer and their quality.
With its single fixed telephone operator and several other companies that offer various telecommunications services, Macedonia is stuck to the very bottom on the list of European countries in terms of number of public phone services operators. Compare this with Germany with 437 operators, Spain with 293, or France with 222 operators. The average price of three minute local call inside the EU costs exactly 13 Cents (VAT included). National three-minute calls cost 25 cents, while 10 minute calls cost about 75 cents. In Macedonia, local call impulse (one minute) costs 1.6 Eurocents. A minute of long-distance call costs 4.8 Eurocents.
A comparison shows that the citizens of Macedonia, taking into account the costs of living and average salaries, pay extremely high telephone bills. Cullen International, a prominent Belgian company, confirmed in September 2006 that Macedonia is amongst the top ranked countries in Europe in terms of expensive phone services. Their analysis shows that Macedonian citizens pay the same monthly subscription fee as their European counterparts. However, the analysis shows that Macedonia is well below the European averages when it comes to international calls’ prices.
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