Home EuropeEurope II 2009 Promoting telecom competition in Albania

Promoting telecom competition in Albania

by david.nunes
 Ilir ShehuIssue:Europe II 2009
Article no.:4
Topic:Promoting telecom competition in Albania
Author:Ilir Shehu
Title:Chairman of Board and Executive Director, AKEP, Electronic and Postal Communications Authority, Albania
Organisation:AKEP, Electronic and Postal Communications Authority, Albania
PDF size:160KB

About author

Ilir Shehu is the Chairman of the Board and Executive Director of AKEP, Albania’s Electronic and Postal Communications Authority. For many years he has been a part time professor at the Polytechnic University as well as at the Military Academy. Until his current appointment by the Albanian Assembly Mr Shehu served as the Head of the Inspection Sector at AKEP. Prior to AKEP, Mr Shehu worked for the Albanian government in the National Intelligence Service, as Head of Sector responsible for the implementation of Information Systems at ICA, and as the Director of Communications Systems in the Ministry of Defence. Ilir Shehu graduated in Electronics from the Polytechnic University of Tirana; he also earned a degree in Economics from Tirana University.

Article abstract

Last year, Albania’s government passed a law that changed the regulatory framework for the telecommunications sector. The law, which basically follows EU directives and policies, established AKEP, an independent regulatory agency. AKEP has been moving forward vigorously to increase competition in the sector. The recent granting of a license to a third mobile operator and regulations controlling the tariffs charged by operators with significant market power, for example, was quite successful; it also significantly reduced the tariffs for mobile services.

Full Article

The electronic communications market in the Republic of Albania is currently one with very fast and variable dynamics. The market is undergoing important changes not only from the regulatory point of view, but also in terms of service quality and variety, tariff reductions for network users, total market liberalization and the like. These changes have created favourable conditions for fair and effective competition in this market. Referring to the legal framework, which regulates relationships in the electronic and postal communications market, law No. 9918, ‘On Electronic and Postal Communications in the Republic of Albania’ entered into force in June 2008. It replaced the previous law ‘On Telecommunications in the Republic of Albania’. The new law is one of the most fundamental and important measures undertaken in this market by the Council of Ministers. This expression of sector policy is in compliance with the National Plan for Implementation of the Stabilization Association Agreement, and it approximates our national legislation with that of the EU acquis communitaire. The law is framed within the spirit of approximation with the regulatory framework for electronic communications of the European Community (Directive 2002/EU). With regard to secondary legislation, the project for Communications Regulation Development funded by EBRD/EU is assisting AKEP in the process of drafting and completing the supporting sub legal framework for the implementation of the law on electronic and postal communications. Hence, from the legislative point of view, we can proudly say that we are optimally positioned and developed for a country like Albania, which aspires to become a member of the greater European family. In the fixed telephony market, after the successful privatization of the biggest operator in the country Albtelecom S.A., and the great investments made the infrastructure and services of the network, the system – and its penetration rate – continues to grow into a modern network offering a wide variety of services. Albania’s liberalization policy was strongly encouraged and supported by the Council of Ministers’ policy through legislation. After removing licensing barriers and implementing the new General Authorization regime, there has been substantial growth of fair and effective competition in the fixed telephony market. This has brought performance and quality improvements for both local and regional operators, an increase in the number of new undertakings and services in the spirit of technological convergence as well as other alternatives offered by the most advanced technology in this field as well as tariff reduction. The mobile telephony market, which is also much more sensitive with regard to its subscribers, is currently in a dynamic process of tariff reduction and is evolving into an increasingly effective and fair market. The start of the third mobile operator, Eagle Mobile, has been much quicker than expected. AKEP’s intervention, implementing tariff regulation for the other two mobile operators – AMC and Vodafone Albania – has been quite satisfactory and has resulted in the reduction of service tariffs. Due to changes in the legislation, the rise of public awareness and the influence of the government new projects in education, public services, protection of public order and the like have flourished. This has largely been due to concrete action by the government to encourage such projects by creating an attractive tax and fiscal environment. Policies and actions such as these have also stimulated the rapid development of the Internet service providers market. Tariffs in the mobile telephony market have been reduced compared to the previous period since Eagle Mobile started to offer its services competitively and AKEP implemented its tariff regulations for SMP’s (companies with significant market power) AMC and Vodafone Albania. Tariffs for services offered by AMC for national calls of the ALBACARTA programme were reduced as follows: 4% for AMC on net calls, first minute; 57%, for AMC on net calls, second minute; 68% for AMC on net calls, over two minutes; 20% for off net calls, first minute; 53% for off net calls, second minute; 63% for off net calls, over two minutes; 22% for calls to fixed networks, first minute; 48% for calls to fixed networks, second minute; and 59% for calls to fixed networks, over two minutes. Tariffs for services offered by Vodafone Albania for national calls using its Vodafone Card programme were reduced as follows: 24% for Vodafone Albania on net calls, PEAK; 3% for Vodafone Albania on net calls, OFF-PEAK; 24% for off net calls; and 26% calls to fixed networks. A very important change for both major mobile telephony operators (AMC and Vodafone Albania) is the reduction of the minimal chargeable time from 30 seconds to 15 seconds, which together with the reduction of per minute tariffs, substantially reduces expenses for short calls. As part of their sector development plans, The Council of Ministers and AKEP have considered the emergence of a fourth operator in the market as essential to increase competition, improve quality and expand the range of services. More important, this will provide services for those with special needs, in accordance with international standards for alternative services. The fee for these services will not, in any case, be higher than the average fees in the EU countries. The public tender for the frequencies in the E-GSM and GSM 1800 bands called for presenting and opening the bids on 20 February 2009. The law on electronic communications defines AKEP also as a regulatory body for the supervision of the postal service market in the Republic of Albania. This is a novelty for this institution and in this respect the Ministry of Public Works Transport and Telecommunications (MPWTT) and AKEP are taking the first steps towards exercising our competencies and taking on legal responsibility. Since supervision of postal services was not included in the duties and functions of TRE, the precursor institution, AKEP has initiated its work by taking organizational measurements in order to build the structures and the necessary administrative and human capacity. On the other side, in order to define the legal competencies of AKEP in the implementation of the legal obligations, the MPWTT as the line ministry has undertaken the legal initiative to change the law for postal services; this is actually at the stage of consultation with the interested parties and very soon will be passed to the Assembly. Another specific aspect for the market as well as for AKEP is the ‘.AL Domain’ administration. At present, AKEP administers the .AL Domain based on regulations approved in accordance with the new law on electronic communications. Importantly, the servers enabling this service for the domain were transferred from Pizza, Italy to Tirana this month. This transfer marks the accomplishment of one of the duties assigned to AKEP by the government and the Assembly of Albania. This, considering the importance of maintaining and guaranteeing extremely high security, is a barometer of the progress achieved in the electronic communications sector and the attention paid by the Council of Ministers and the Assembly to the advance and development in this field. There are many challenges ahead in the electronic communications market, among the most important is the realization of the legal obligation to provide universal service access, number portability, improvement and development of leadership, administrative and professional capacities. Universal service, providing a base package of affordable telephony services even for users in need of residing in remote regions within the territory of the Republic of Albania, is one of the highest priorities for 2009. Secondly, offering number portability is an indispensable legal requirement and an important part of Albania’s commitment in the framework of the EU’s SAA (Stabilisation and Association Agreements), is under way. AKEP has drafted the respective regulation, which has been published for public consultation. The biggest challenge is to guarantee the manpower to accomplish the other goals. The improvement and development of AKEP’s leadership, administrative and professional capacities is the key to strengthening its independence and performance as a regulatory body. AKEP’s primary job remains the supervision of the electronic and postal communications market with the aim of creating a real, effective, fair and competitive market.

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