The upcoming changes in the communication system

  • 2000-09-07
  • Tomas Macernis
Lithuania's Prime Minister Andrius Kubilius recently formed a workgroup responsible for the preparation of e-government concepts. The move has stirred up discussions amongst specialists questioning the Information Technologies' past and prospects in Lithuania. They all unanimously agree that e-government projects and IT development in general are significantly dependent on access to data networks and features such as speed, reliability, and price.

The latter, actually, was and still is crucial for the low number of Internet users in Lithuania. As Kubilius revealed, inducing Internet use is the government's first priority. In addition, Internet problems are declared in the programs of candidates to the prime minister post. This gives us hope that in the near future we may expect significant changes in Internet related issues with government support.

Internet expansion slowed down two years ago, after the imposition of local calls charges. Usually, users access the Internet via leased lines, which automatically became the subject to phone call rates. The Internet turned out to be a luxury for most households and schools lacking in funds. It was erroneously expected that raised living standards will naturally solve this problem.

The end of Lietuvos Telekomas' (Lithuanian Telecom) monopoly would barely help either because, by definition, Lietuvos Telekomas' monopoly does not cover data transmission. The experience of the past few years and examples from other countries indicate that these are not the focal hurdles. The end of the monopoly will not make Internet access radically cheaper. It is necessary to seek alternative Internet providing sources, which, by all means, will be cheaper.

However, this search is unfeasible without government support, since the small number of Internet users scares away potential strategic investors. The bureaucratic obstacles are generally feared by all investors. Local firms are small and able to install only minor data networks, and thus will take a long time to fulfill the market potential. On the other hand, the government has the capacity to change the current situation.

Until now, the government's investments in the IT sphere have been modest in general, although we did see considerable funds going into the state's departmental networks, for instance, Ministry of Internal Affairs, railways, and electricity industry. As a consequence, the present capacity of these data networks exceeds the needs of the institutions several times in some sections. Internet providers could well exploit the extra capacity, but unfortunately, until now individual efforts have fallen under bureaucratic machinery.

In the light of the sunset program, the networks, which are the property of the state, could be joined. In such a way, the utilization of data networks would be enhanced. In the first place this means meeting the requirements of state institutions and state- owned enterprises, and, moreover, the procedure of leasing networks to Internet providers would be eased since now they could lease one big network instead of several smaller ones. That should definitely be a valuable support for local Internet providers.

Going further, the next step could be connecting other important infrastructure objects. Examples from other countries show us that railways, gas mains or electricity transmission lines are often used for data networks installation.

The possibility to exploit already existing networks would definitely help small companies solve their local problems, and give strategic investors real targets to invest in. The outcome of the alternative data network is obvious: Internet providers will expand their domains, while the competition will knock down the price of access to Internet for end-users.

Even without big investments e-government might trigger an Internet boom in Lithuania, and, furthermore, leasing data networks might well be an additional source for a lacking budget. o

Tomas Macernis is marketing manager of Vilnius-based telecommunication firm Fima.