TALLINN – Although the fixed-line monopoly Eesti Telefon and the Transport and Communications Ministry regard the services provided by the Finnish company Supertel as illegal, the company continues its operation on the Estonian market.
Supertel started offering an international long-distance service based on Internet technology after it had published ads in local newspapers in the beginning of June.
The company announced that its services allow savings of up to 83 percent of the price of the conventional service and has won thousands of clients during its first month of operation in Estonia.
"We predict to conquer 10 percent of the market. Our operations are increasing with a snowball effect," said Ants Aasmets, a representative of Supertel Eesti.
The Transport and Communications Ministry said it will put an end to the Finnish company's operation which it considers illegal.
"We have prepared a document which stops their operations at once. The minister will sign it this week," said Edvard Saarma, head of the ministry's communications department.
According to Estonia's communications law, a company needs a license to set up and operate communication networks.
"They have established lines on the basis of other operators in order to offer long-distance calls. This is in conflict with the communications law, which in itself is a good argument to stop their operations," said Saarma.
Supertel, however, claims it fully confirms with the Estonian law. Aasmets also stated that his company does not need a license for communication networks because it uses the networks of companies which already have a license.
Aasmets said the service offered by Supertel does not violate the terms of Eesti Telefon's franchise either because the data communication signal is not converted into speech before it reaches Finland.
Connection through Supertel is made by calling the Supertel server, through which the desired number is then dialed as an ordinary long-distance telephone number.
"Even if they had applied for the license beforehand, they still would not have been able to offer long-distance calls before the end of next year when Eesti Telefon's exclusive rights end," said Saarma.
Aasmets claims that if the company was not sure about the right to start offering this service, they would not have started such an advertising campaign.
Saarma predicted that when Eesti Telefon's monopoly ends the competition will become very tough and the Estonian company will have to decrease its prices.
"Estonian Telephone will not survive otherwise. It has to cover the costs of fixed-line development, but in terms of free competition it is not possible to subsidize one service with revenues from another service," said Saarma.
