The lacking legal framework; exclusion from international associations of postal services and telecommunications due to its unresolved status; delayed transfer of competences by UNMIK to Kosovans; the drag in the licensing of other operators apart from the public one – Post and Telecommunications of Kosovo (PTK); use of foreign telecommunications codes and enormous expenditures it entails; these are all factors that have had to be taken into consideration in the development of telecommunications sector in Kosovo since 1999. The ultimate result of such a situation has been the creation of a monopoly in the sector, detrimental to the users of services in general.
Today, the telecommunications market in Kosovo is in chaos. There are no numeric resources, because the matter of international code hasn’t been rectified; there are no free frequencies because the frequency spectrum is abused at will by illegal operators; the law on telecommunications lives in name only, for its text is completely senseless; the fundamental rules for the functioning of liberalized market don’t exist, while the regulator needs a massive training in order to be able to perform the most basic duties to settle the liberalized telecommunication market, estimate experts in the field of telecommunications.
Experts also claim that the Kosovo Budget loses colossal amounts of money while the Kosovan consumers pay expensive prices for mobile telephony services, because more than half of the profit from these services goes to Monaco Telecom, while the remaining amount is not allocated to Kosovo’s budget because of the extremely inefficient and abusive management of PTK by the Kosovo Trust Agency (KTA).
Landline telephony
The Post and Telecommunications of Kosovo, as the only provider of landline telephony (until September 2006) which inherited the telecommunications infrastructure, has 175 thousand active telephone landlines in the country. Lately this operator has decreased the prices for international and national calls, though they are still estimated to be the most expensive ones in the region. Local calls for this network (VAT added) during the random hours (08:00 – 20:00) cost 0.0199 € per minute; international calls, 0.0586 €: calls on Vala 900 mobile network, 0.1840 €; while international calls depend from the tariff group, and as such call fro Tariff Group I, 1 minute call costs 0.4933 €l for Tariff Group II: 0.5371 €, Tarif Group III: 0.6348 €; Tarif Group IV: 1.1730 € and Tarif Group V: 1.3685. Therefore, a 3-minute call within the local network costs 0.0597 €, while a 3-minute call to USA costs 4.1055 €. GDP - per capita (PPP) is: $4,400 for Serbia (including Kosovo) (2005 est.) While, some time ago has also started the corporation of this public enterprise, in order to prepare it for the competition which is knocking on Kosovo’s market.
Another operator which has been added recently to the Kosovan market is Ipko Net-i, which starting from September 8, 2006 has got the license for landline from the Telecommunication Regulatory Authority (TRA). Prices offered by this operator are still unknown, having in mind that the company still works on the installation of its network throughout Kosovo. This operator is already using its own internet network to lay-down the infrastructure for landline telephony. Telecommunication experts believe that this operator will not find many obstacles to its market entry, just because of long standing monopoly held by PTK and the high prices it charged.
In concert with two licensed operators in Kosovo also operate a series of private posts which offer illegal landline telephony services through satellite connections (internet). At this point, the private posts use Voice Over Internet Phone (VoIP), while the price for a minute costs from 0.10 to 0.16 € for international calls. The same operators also offer VoIP equipment out of which one can make a call within their network for only 0.02 € per minute.
Mobile telephony
Kosovo is the only country in the region with only one licensed mobile telephony operator, Vala 900. Holding a monopoly over these services, this operator consequently charges very high prices. The price of a three-minute call within Vala 900 network varies depending on the prefix called and time tariff. Depending on the country a call is made to, the price for the first minute is 0.72 € for the first minute and 0.12 for each of the ten following seconds which for a three minute call with high tariff costs 2.16 €. In the other case of a prefix call, when the first minute call is 1.38 € than a 3 minute call cost 4.08 €. Within the low tariff, the price is exactly one half of the high. The prices of SMS services the operator offers have fallen after many years from 0.16 to 0.08 euro. An international SMS currently costs 0.13 euros.
In Kosovo there are also illegal mobile telephony operators. The insuppressible are the harms which are caused by the Serbian mobile operators (063 and 064), which operate in 28 areas of Kosovo. Lately, after a several years dragging by the UN mission in Kosovo, Telecommunication Regulatory Authority was allowed to do dismantle and confiscate their antennas.
Apart from the Serbian mobile telephony operators, other operators from neighboring countries are spreading their networks. These operators include Macedonian "Mobimak” and "Cosmofon”, Montenegrin "Promonte" and "AMC" from Albania. These operators are also illegal, while their expansion in Kosovo has proceeded due to inexistence of proper legislation and established political circumstances. Apart from not paying the profit tax which they gain in Kosovo, these mobile telephony operators, according to the PTK, cause numerous interferences in the network of the only legal operator in Kosovo, Vala 900. Though the subscribers are the one profiting from these operators, due to low and favourable prices they charge, responsible bodies in Kosovo and UNMIK seem to have decided to put an end to their illegal operations.
This month, Kosovo Ministry of Transport and Post Telecommunication has announced the international tender competition for a mobile telephone operator, after the one of 2004, won by Mobikos-Mobitel consortium, later annulled by the Government and international authorities due to suspicions of tender procedures violations. Presentation of documents by the interested companies started on November 3, 2006 and it will last until January 17, 2007. The combined method was selected for the licensing of the second operator, together with an auction and "Beauty Contest", or criteria which competing companies will need to fulfil. The basic license fee, according to the tender, is set at 20 million euros, with a possibility to increase, depending on the offers of the interested companies. The mobile telephony license will include the right to use GSM 900/1800 MHz frequency, and it will last for a period of 15 years.
Nevertheless, it has been foreseen that until an international code for Kosovo has been acquired, the tender winning company uses the code of its country of origin (Vala 900 does currently use the Monaco code - 377). It remains unknown what the tariffs for calls may be, since that will depend heavily on the international prefix, until Kosovo resolves its legal status and get its own. TRA deals with all these procedures, nevertheless this body has often been neglected and overlooked for political interests in Kosovo and hasn’t been allowed the proper way.
Internet services – Providers
Although the survey conducted by the public opinion, media and market research private company Index Kosova, only 7 percent of Kosovans use internet on regular basis, companies offering these internet services seems to be satisfied with the market. Their satisfaction comes from the fact of their expansion in the field (within last 4 years this has been widely achieved) and belief that the level of internet usage has increased steadily with the coverage of rural areas as well, despite the fact that there are no accurate figures to confirm or deny that view.
Furthermore, they say that they are unable to meet the high demand for internet services. In any case, exact figures and percentages in regard to the internet market are not available still. An analysis prepared by the Economic Initiative for Kosova – ECIKS shows that TRA, which monitors telecommunication in Kosovo, until now has licensed three Internet Service Providers (ISPs). Apart from the public enterprise “DardaNet”, a unit of PTK, TRA has also licensed IPKO Net and Kujtesa private companies. These three companies share the internet market in Kosovo today. Monthly internet fee do not vary much from one to the other. Kujtesa offers services on these packages (without VAT). Family package: 128 kbps, 9.90 €; Entry: 256 kbps, 14.90 €, Basic: 512 kbps, 19.90 €, Advanced: 1 mbps, 24.90 €, Premium: 2 mbps, 29.90 € and Platinum: 3 mbps, 34.90 €. All these packages are accompanied with a 55 channel cable television given for free. While IPKO provides internet services with these prices: Package I: 1 mbps, 9.90 €, Package II: 2 mbps, 14.90 €, Package II: 3,5 mbps, 19,95 euro. Some packages, however, are available only in Prishtina where these two ISP’s have their own infrastructure.
Representatives of these companies estimate the size of internet market in Kosovo at about 10 million Euros per year. With additional investment and infrastructure improvement, this market could easily double. With the economic development of Kosovo these figures will surely get higher. There is existing potential, not only in the sense of the market but also in the companies ready and able for international cooperation.
DardaNet, being a public enterprise, had the advantage of using PTK infrastructure. Despite this advantage, poor management and failed investments just because of the first fact, including the failed investment in expanding internet infrastructure, where the implementer was an Austrian enterprise InfoNova, made that DardaNet today offers only the Dial Up connections and is the weakest bidder out of the three licensed companies. DardaNet plans to offer internet access through ADSL with “more convenient” monthly prices of 25 € per households and 50 € for enterprises. An average monthly payment for a full time job in Kosovo’s public sector 151 € while in the private sector its average is 208 €, which would be about 7% of the medium salary in Kosovo. With ADSL, DardaNet would use the existing network of PTK landline telephony and it is expected that it would take over a considerable part of the market. PTK is also interested to build the Kosovo-wide optic-fibre network and for this matter it has signed an agreement with Kosovo Railways which enables laying of optic-fibre cable alongside railways. Despite the fact that this enterprise is currently the poorest among Kosovo ISP’s, surely has the greatest potential for the future. DardaNet currently employs only 25 people.
IPKO Netis the first enterprise which brought internet in Kosovo. It offers internet services in entire Kosovo territory with fast connection through microwaves (microwave antennas). At the same manner, through microwave (wireless), this enterprise gets its link from Albania, Macedonia, Montenegro and Serbia, and it is also is in the process of building optic network within Kosovo. For this matter, IPKO Net has signed a contract with Kosovo Energy Corporation (KEK) which would enable them to use KEK cables. IPKO Net is a shareholding company, which employs 105 persons and it gives the impression to be organized and well managed. It has the potential to expand and presents a serious partner for cooperation with foreign companies. In this regard, Slovenian Telecom has invested this year in IPKO 19.5 million euros, respectively 75% of IPKO’s estimated value, out of which 10 million are direct investments, which in two upcoming years will ensure building and further modernization of the network.
Kujtesa is another private enterprise which according to the participation in the market seems to be at the same level with IPKO. It is the only enterprise which offers cable internet connection in Prishtina, in cooperation with a local cable television. This service has been limited only in Prishtina and only in the quarter which have been covered by the cable television, but this is expanding further. Apart of this, Kujtesa offers wireless services throughout Kosovo and pretends to take over the greatest part of the ISP market in the country.
As with all other fields of development, telecommunication and internet services are closely linked with the Kosovo’s status. Operation of the illegal mobile telephony operators, wild development of internet and telecommunications infrastructure, lack of an international dialling code for Kosovo, etc. and other things by Kosovo instances are justified with the non-resolution of the status.
A surprising fact about telecommunications in general is that despite being on the media headlines all the time during last couple of years for high prices, numerous complaints by the end-users, etc no civil society organization hasn’t raised this voice about this matter. All hope for better days. The status of Kosovo will depend on the outcome of negotiations that started in December 2005.
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