TALLINN - As the end of Estonia's telecommunications monopoly at the beginning of 2001 draws near, the struggles persist in the transition to an open market.
Last week, Minister of Transport and Communications Taivo Jurgenson spoke out against Eesti Telefon's business plan, claiming proposed increases in private installation costs and monthly fees were unacceptable.
Kuldar Vaarsi, spokesman for the ministry, said the Cabinet sent back the plan, which proposed to tack 20 kroons (about $1.12) onto the current 75-kroon monthly fee. Eesti Telefon was advised to make adjustments, and they will resubmit the short-term and long-term plans at a meeting on Aug. 22.
Vaarsi also said Eesti Telefon is slow to install phone lines, is not shortening telephone waiting lists, and is not installing digital lines fast enough as mandated by the Estonian telecommunications law passed March 1.
However, the government's authority is limited, he added.
Beyond the realm of monthly fees, there is not much else it can order the company to change, in accordance with a concession agreement signed with Eesti Telefon in 1993.
Raul Kalev, spokesman for Eesti Telekom, which owns 100 percent of the shares in Eesti Telefon, said he believed the government would eventually accept the business plan, because ultimately it could only work in Estonia's favor.
"In Finland and Sweden, why are they so far ahead?" he said. "The situation is that the governments have helped (the telecom companies) all the time; this has to do with infrastructure.
"If governments understand that success for a country requires good infrastructure, they will not struggle, because it is just one big telecommunications company."
Everyone seems to agree the first step is balancing tariffs between local and international call tariffs, the latter being disproportionately expensive, costing 10 kroons to 12 kroons or more per minute, while local calls are just 16 Estonian cents per minute during the day and 8 cents weekends and nights.
Kalev pointed out, however, that the country's telecommunications success was inconceivable when Eesti Telekom was founded in 1993.
As of the first quarter of this year, 57.6 percent of phones used digital lines. That figure is up from just 5.4 percent in 1993, not to mention the country's Internet access and mobile phone penetration rates, which put Estonia far ahead of both Latvia and Lithuania.
January will also bring about a sigh of relief for Estonians who have so far been paying unusually high international long distance tariffs.
Tele2, Estonia's second largest dial-up networking provider, will serve alongside Uninet as Eesti Telefon's primary competitors when the monopoly ends.
However, "major barriers in the market" will still prevent Eesti Telefon's competitors from providing a competitive domestic calling plan for at least another year, he said.
The "incumbent's" rates - unlike its international rates - are tough to beat. Local calls cost just 16 cents per minute during the day and 8 cents on weekends and nights.
He stressed the strength of the "incumbents" - Eesti Telekom and its two main shareholders, Telia and Sonera.
"In the past five to 10 years, incumbents were slow and bureaucratic and knew absolutely nothing about marketing," Poldesamm said. "But as the new entrants will cut 20 percent (into their profits), they have learned."
Accordingly, Tele2 has advertising campaigns already set to launch by October, he added.