Godišnji izvještaj - Agencija za elektronske komunikacije i … ENG VERZ z… · ·...
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Annual Report 2011 MONTENEGRO AGENCY FOR ELECTRONIC COMMUNICATIONS AND POSTAL SERVICES
Transcript of Godišnji izvještaj - Agencija za elektronske komunikacije i … ENG VERZ z… · ·...
Godišnji izvještaj
2011 Annual Report
2011
MONTENEGROAGENCY FOR ELECTRONIC COMMUNICATIONS AND POSTAL SERVICES
CRNA GORAAGENCIJA ZA ELEKTRONSKE KOMUNIKACIJEI POŠTANSKU DJELATNOST
Contents INTRODUCTION ...............................................................................................................................................................................................51. DYNAMICS OF COMPETITION DEVELOPMENT IN ELECTRONIC COMMUNICATIONS MARKET AND IMPLEMENTATION OF PRINCIPLES OF PRICING POLICY 7
1.1. Analysis of relevant markets in order to assess the degree of market competitiveness ......................................................................................71.1.1. The European Union regulatory framework ........................................................................................................................................ 71.1.2. Legal ground for carrying out the process of definition and analysis of relevant markets ......................................................... 71.1.3. Chronology of the Agency’s activities in the process of analysis of relevant markets .................................................................. 81.1.4. Supervision over the implementation of the regulatory remedies by operators with significant market power on relevant markets, imposed by the Agency’s decisions on the basis of analyses of relevant markets carried out in 2010 ..................... 91.1.5. Legal ground for carrying out the process of definition and analysis of additional five relevant markets ............................ 111.1.6. Chronology of the Agency’s activities in the process of analysis of five additional relevant markets during 2011 .............. 111.1.7. Regulatory remedies prescribed to operators with significant market power in five additional relevant markets ............. 121.1.8. Planned activities on the analyses of additional relevant markets during 2012 ......................................................................... 13
1.2. The project of accounting separation and cost accounting ............................................................................................................................ 141.2.1. Legal basis for implementation of the obligation of accounting separation and cost accounting ........................................ 141.2.2. The purpose of accounting separation and cost accounting ......................................................................................................... 141.2.3. Chronology of the Agency’s activities in implementation of the project of accounting separation and cost accounting in 2011 .................................................................................................................................................................. 151.2.4. Forthcoming Agency’s activities on the implementation of the Project of accounting separation and cost accounting .. 15
1.3. Development of competition in electronic communication market ............................................................................................................... 151.3.1. Fixed telephony ........................................................................................................................................................................................161.3.2. Mobile telephony .....................................................................................................................................................................................231.1.3. Broadband Internet access ....................................................................................................................................................................27
2. DEGREE OF UNIVERSAL SERVICE IMPLEMENTATION IN ELECTRONIC CO MMUNICATION SECTOR WITH ASSESSMENT OF USER SATISFACTION WITH THIS SERVICE .......................................................................................................................................................................................................30
2.1. European Union Regulatory Framework .......................................................................................................................................................302.2. Activities on implementation of the Universal Service ..................................................................................................................................302.3. Assessment of users’ satisfaction with this service ....................................................................................................................................... 32
3. ASSIGNED LIMITED RESOURCES AND ASSESSMENT OF THEIR RATIONAL USE .......................................................................................................333.1. Assigned radio-frequencies and assessment of their rational use .................................................................................................................... 33
3.1.1. Radio frequencies assigned through the process of public tender .................................................................................................343.1.2. Analysis of occupancy of the most significant radio frequency bands .........................................................................................353.1.3. Irrational use of radio frequencies ........................................................................................................................................................393.1.4. International coordination of radio frequencies ...............................................................................................................................40
3.2. Assigned numbering/addresses and assessment of their rational use ...........................................................................................................404. LEVEL OF DEVELOPMENT OF THE ELECTRONIC COMMUNICATIONS SECTOR IN 2011, WITH THE OVERVIEW OF VOLUME, KIND AND QUALITY OF SERVICES
PROVIDED TO END-USERS BY OPERATORS AND SERVICE PROVIDERS ..................................................................................................................444.1. Overview of registered electronic communications operators during 2011 ..................................................................................................... 444.2. Market of fixed telephony and public pay phones ..........................................................................................................................................444.3. Mobile telephony market .............................................................................................................................................................................48
4.3.1. Registration of prepaid customers of mobile services .....................................................................................................................504.3.2. Implementation of mobile country code (MCC) 297 and replacement of SIM cards ..................................................................504.3.3. Harmonization of the form of itemized bills with Article 113 of the Law on Electronic Communications ............................. 51
4.4. Internet and broadband market .................................................................................................................................................................... 524.4.1. Dial-up Internet access ...........................................................................................................................................................................524.4.2. Fixed broadband Internet access ..........................................................................................................................................................534.4.3. Mobile broadband Internet access .......................................................................................................................................................574.4.4. Internet penetration ................................................................................................................................................................................57
4.5. VoIP service market ....................................................................................................................................................................................... 594.6. Market of leased lines....................................................................................................................................................................................60
4.6.1. Prices of leased line service ..................................................................................................................................................................... 614.6.2. Market structure .......................................................................................................................................................................................62
4.7. Market of distribution of radio and television channels to end-users .............................................................................................................634.8. Interconnection and operator access .............................................................................................................................................................65
4.8.1. Prices of interconnection services .........................................................................................................................................................654.8.2. Market of call termination .....................................................................................................................................................................70
4.9. Joint use of electronic communication infrastructure ...................................................................................................................................71
CONTENTS
5. PLANED AND COMPLETED ACTIVITIES OF THE AGENCY IN 2011 ...........................................................................................................................735.1. Administrative procedures ............................................................................................................................................................................73
5.1.1. Exercise of user rights and user protection ..........................................................................................................................................735.1.2. Administrative procedures at the requests of entities in the market of electronic communications and resolution of disputes among those entities ......................................................................................................................................75
5.2. Development of regulation in the area of electronic communications and postal services ............................................................................ 755.3. Implementation of the project on central administrative database of ported numbers and provision of the service of number portability .. 765.4. Monitoring of radio-frequency spectrum ......................................................................................................................................................775.5. Completion of works on the Main control-measuring center on Dajbabska gora in Podgorica and activities on the construction of three new remote-controlled control-measuring stations in Rožaje, Kotor and Ulcinj .................................805.6. Study on further development of the RF spectrum control and monitoring system in the period 2012-2016 .................................................. 815.7. Expert supervision in electronic communications ......................................................................................................................................... 815.8. Process of switchover from analog to digital broadcasting system ................................................................................................................865.9. Giving opinion about spatial planning documents ........................................................................................................................................875.10. Issuing requirements during the construction of apartment and office buildings .........................................................................................885.11. International activities ..................................................................................................................................................................................885.12. Survey about the use of information and communication technologies in Montenegro ................................................................................905.13. Development of human resources ................................................................................................................................................................. 915.14. European Integrations – Chapter 10: Information Society and Media ............................................................................................................ 93
6. POSTAL SERVICE MARKET ..............................................................................................................................................................................946.1. Regulation of postal service market ...............................................................................................................................................................94
6.1.1. Montenegro Post ......................................................................................................................................................................................946.1.2. Other postal operators ...............................................................................................................................................................................966.1.3. Montenegro Post and other operators ...................................................................................................................................................97
6.2. Quality of provision of universal postal service ..............................................................................................................................................986.2.1. Measuring the quality in transferring ordinary letters in the national postal traffic .................................................................986.2.2. Measuring the quality in transferring recorded postal items in domestic postal traffic ...............................................................996.2.3. Measuring the quality of transferring registered postal items in international incoming traffic...........................................1006.2.4. Received and resolved inquiries in domestic and international ......................................................................................................100
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INTRODUCTION
The Agency for Electronic Communications and Postal Services, as national, independent regulatory authority for the area of electronic communications and postal services has been performing its regulatory activity for more than a decade, precisely from 8 March 2001. The basic principles that the Agency has been applying during this ten-year operation and sector regulation have been to ensure a certain and predictable business environment for the operation of undertakings and significant investments; to create conditions for the implementation and development of new technologies in the whole territory of Montenegro, with the promotion of rational utilization of limited resources (radio-frequencies and numbering/addresses); to promote competition and prevent the distortion of market competition among operators; to resolve operators’ disputes, and to constantly improve the protection of user interests.
Managing bodies of the Agency under the Law on Electronic Communications are the Council of the Agency and the Executive Director of the Agency. The Council of the Agency was appointed by the decision of the Government of Montenegro at the end of 2008. According to the provisions of the Law, at the end of January 2009 the Council appointed the Executive Director of the Agency with the term of office of 4 years. During 2011, the Council of the Agency had 120 meetings, out of which 12 were regular (held on monthly basis) and 108 extraordinary. In December, a three-year term of office for two Council Members expired.
In the course of 2011, the Agency carried out control of the implementation of regulatory remedies by operators with significant market power which were imposed by the Agency’s decisions of 11. 11. 2010 on the basis of the analyses of seven relevant markets performed during 2010. In the beginning of 2011, the Council of the Agency, acting upon the obtained opinion of the Competition Authority, took a decision that new analyses for five markets, i.e. two retail and three wholesale markets, were to be carried out. The Agency took significant activities, in cooperation with KPMC Croatia, on the implementation of accounting separation and cost accounting, which the Agency imposed on Crnogorski Telekom A.D. Podgorica, as operator of fixed electronic communication networks with SMP.
In November 2011, the Council of the Agency took a decision to call a public tender for giving authorizations for the use of radio frequencies from the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz and 1920-1980/2110-2170 MHz. The fee amounting of €1,649,500.00 was paid to the Budget of Montenegro for effective utilization of radio-frequencies, and the subject frequencies were assigned to Telenor and Crnogorski Telekom, which will use them for increasing the capacity of the existing GSM/DCS1800, and/or IMT-2000/UMTS networks, as well as for the implementation of new technologies, primarily LTE.
At the beginning of 2011, after the tender procedure had been completed, the Agency issued decisions on the selection of operators for performing individual services from the scope of the Universal Service for the period of five years in the whole territory of Montenegro. The selected operators were: Telenor d.o.o. for fulfilling each reasonable request for connection to the public telephone network, at a fixed location, thus allowing the use of publicly available telephone services of making local, long-distance and international calls, data communication by facsimile and data transmission at the rates suitable for functional Internet access, and for providing benefits for disabled users; business organization MCA d.o.o. from Maribor (Slovenia) was selected for the provision of services of Universal Telephone Directory and Universal Telephone Enquiry Service.
In the course of 2011, operators were registering prepaid mobile phone users. There were 935,663 registered users at the end of the year. According to valid secondary regulation, SIM cards whose users had failed to be registered by the end of 2011 were permanently deactivated by operators.
The project of central administrative database of ported numbers and the provision of the service of number portability was implemented. With already implemented facilities of carrier selection (CS) and carrier pre-selection (CPS), the possibility of number portability among various operators will increase competitiveness and reduce the prices of current services provided by operators of electronic communications in Montenegro. Users were able to use the service of number portability starting from 1 December 2011, and within the first month of this service availability 320 telephone numbers in mobile networks were ported.
According to the results of carried-out analyses and research in 2011 the Agency continued the activities related to informing and education of customers, i.e. of the users of public electronic communication services. Guidelines for electronic communications service users was printed and distributed through printed media in 60,000 copies. During 2011, 176 complaints were filed by the users of public communications services concerning operators’ decisions upon users’ appeals.
During 2011, 8 new entrants were entered into the Operator Registry that the Agency keeps according to the provisions of the Law on Electronic Communications. A number of operators had been deleted from the Registry at their own request, so that the number of registered operators totaled to 42 at the end of the year.
The Agency administered scarce resources: radio-frequencies, numbering and addresses in a rational way. The Council of the Agency issued 457 decisions on authorizations for the use of radio-frequencies, out of which 141 were decisions on technical requirements for radio base stations in fixed and mobile services. 13 decisions were revoked due to irrational use
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of radio-frequencies by undertakings to which the subject radio-frequencies had been assigned. The Council of the Agency also issued 42 decisions on authorizing some numbering and/or addresses, and 5 decisions on revoking the right to use numbering and/or address resources.
The building of the Main control-measuring center on Dajbabska gora in Podgorica was completed and put into operation. Except for this center, the facilities that had already been in operation were Regional control-measuring center on Crni Rt near the town of Bar, and a Remote-controlled control-measuring station near the town of Pljevlja. Linking those facilities into a single system and the existence of two available mobile control-measuring stations provided a good quality support for efficient and rational management of radio-frequency spectrum. The use of mobile control-measuring stations, regular controls and RFS monitoring in 2011 INCLUDED 76 visits to the fields, and control and monitoring in 19 municipalities on 37 micro-locations. Significant activities were conducted in the area of supervision over the activities of the operators registered with this Agency. This supervision was performed by supervisors for electronic communications. There was the total of 263 controls during 2011.
Pursuant to amendments to the Law on Electronic Communications and the Law on Land Development and Building Construction, the Agency was also put in charge of providing available data at the request of the holders of preparatory activities, as well as its proposals and opinions necessary for preparation of planning documents. In 2011, the Agency issued 38 opinions about planning documents in the part related to electronic communications. Upon request, the Agency also issues conditions during building construction. In the period from 23.08.2011 - 31.12.2011, 310 requests were submitted, on the basis of which the Agency issued appropriate conditions.
By the analysis of statistical data related to electronic communications sector, the continuation of this sector development, present in all previous years, was also noticeable. The most remarkable data characteristic for this sector is the following:
• Numberofsubscribersinfixedtelephonyamountedto170,856whichcorrespondedtopenetrationof27.56%.• TotalnumberofISDNconnectionswas5,273.• TotalnumberofbroadbandconnectionsinMontenegro,regardlessofusedaccesstechnologies,amounted
to 82,506.• NumberofADSLconnectionsamountedto64,712,whichshowedariseof12.8%comparedto2010.• NumberofWiMaxconnectionstotaledto7,296,whichmadeariseof7.4%comparedto2010.• Numberofusersinmobiletelephonyamountedto1,159,112,whichcorrespondedtopenetrationof186.94%.
Out of this number, 841,071 accounted for prepaid users and 318,041 for postpaid users.• During2011,theusersofallthreemobileoperatorsinMontenegrohad1,481,648,465minutesofoutgoing
calls,whichmadeariseof4.1%comparedtopreviousyear.• Numberofdial-upInternetaccessusersfellby62.8%comparedto2010,totalingto4,072.• NumberofInternetuserswiththeaccessbycabledistributionsystemsamountedto3,338,whichmadea
riseofover100%comparedto2010.• 2011sawmoreintensiveinstallationofopticalfiberuptoend-users,sothatattheendof2011,therewere
8,152 installed connections, 1,029 of them being active.• TotalnumberofInternetleasedlineswas569,whichshowedanincreaseof80%comparedto2010.• Totalnumberofwirelessaccesspointsdecreasedcomparedto2010andamountedto107.• NumberofmobilebroadbandaccessuserswithInternetaccessbydataSIMcardsincreasedby89.4%
compared to 2010, totaling to 64,416.• Penetrationoffixedbroadbandaccessattheendof2011was13.3%,whichmadeanincreaseof1.7%
compared to 2010. When penetration was observed according to the number of households, it showed theriseof42.4%,whichwasanincreaseof2.4%comparedto2010.
• Penetrationofmobilebroadbandaccesswas10.4%,whichwasanincreaseof4.9%comparedtopreviousyear 2010.
• During2011,usersgenerated940,713minutesoftrafficthroughVoIPoperators,whichwasanincreaseof16.6%comparedto2010.
• Totalnumberofleasedlinesin2011amountedto603,whichmeantanincreaseof7.1%comparedto2010.• Totalnumberofusersoftheserviceofdistributionofradioandtelevisionbroadcastsuptoend-users
amountedto122,404,whichmadeanincreaseofabout10%comparedto2010.
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1. DYNAMICS OF COMPETITION DEVELOPMENT IN ELECTRONIC COMMUNICATIONS MARKET AND IMPLEMENTATION OF PRINCIPLES OF PRICING POLICY
1.1. Analysis of relevant markets in order to assess the degree of market competitiveness
1.1.1. The European Union regulatory frameworkRegulatory framework of the European Union from 2002 is a result of a long and continual process of discussions and analyses of the ways to achieve the most appropriate environment for the development of an effective competition in the electronic communications sector. Nowadays this Framework is a regulatory model which has been accepted as the best model available even in the countries that are not the EU member states. In March 2002, the European Commission adopted four Directives, which partly established a regulatory framework in the field of electronic communications networks and services, while the fifth Directive, which also makes an integral part of the regulatory framework, was adopted in October 2002:
• Directive 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities (“Access Directive”);
• Directive2002/20/EC on the authorization of electronic communications networks and services (“Authorization Directive”);
• Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (“Framework Directive”);
• Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services (“Universal Service Directive”);
• Directive 2002/58/EC on the protection of privacy and secrecy of communications in the electronic communications sector (“Directive on privacy in electronic communications”).
Pursuant to Article 15 of “Access Directive”, the European Commission adopted the following recommendations on relevant markets in the electronic communications sector:
• Recommendation(2003/311/EC)7of11.02.2003onrelevantmarketsinelectroniccommunicationssector,which included 18 markets susceptible to ex‐ante regulation, which was later replaced by Recommendation (2007/879/EC)8 of 17. 12. 2007 on relevant markets in the electronic communications sector, which included 7 markets susceptible to ex‐ante regulation.
At the initiative of the European Commission, the European Parliament and the Council adopted in December 2009 a new regulatory framework in the electronic communications sector, which consisted of two Directives and one Regulation:• Regulation1211/2009onestablishingtheBodyofEuropeanRegulatorsforElectronicCommunications
(BEREC)9;• Directive2009/136/ECoftheEuropeanParliamentandoftheCouncil10,amendingtheDirective2002/22/
EC оn Universal Service, Directive 2002/58/EC on the use of personal data, and the Regulation 2006/2004 оn cooperation of national authorities for the application of provisions for user protection ;
• Directive2009/140/ECoftheEuropeanParliamentandoftheCouncil11,amendingtheDirective2002/21/EC оn common framework, Directive 2002/19/EC оn access and interconnection and Directive 2002/20/ EC оn issuing authorizations for networks and services.
1.1.2. Legal ground for carrying out the process of definition and analysis of relevant marketsThe Law on Electronic Communications in Article 8 defines, inter alia, the competencies of the Agency to carry out market control, designate operators with significant market power and undertake necessary action to prevent negative effects of operators’ significant market power.
According to Article 41 of the Law, the Agency adopted the draft Decision on relevant service markets and relevant geographic market, which was the subject of public consultations.
After obtaining the opinion of the Competition Authority and completion of the consultation process, the Council of the Agency for Electronic Communications and Postal Services, on its session on 03.04.2009, adopted the Decision on relevant service markets and relevant geographic market.
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The Decision on relevant service markets and relevant geographic market1 identified the territory of Montenegro as a relevant geographic market. Also, this Decision defined the following relevant service markets:
1. The market of access to public telephone network at a fixed location for residential and non-residential customers – retail level;
2. The market of call origination on public telephone network, provided at a fixed location – wholesale level;
3. The market of call termination on public individual telephone networks, provided at a fixed location – wholesale level;
4. The market of access to network infrastructure (including shared or fully-unbundled access at a fixed location) – wholesale level;
5. The market of broadband access – wholesale level;
6. The market of terminating or trunk segments of leased lines, regardless of technology used to provide the leased or dedicated capacity – wholesale level;
7. The market of call termination on individual mobile networks – wholesale level.
1.1.3. Chronology of the Agency’s activities in the process of analysis of relevant markets
The whole course and process of the analysis of relevant markets were performed with a high degree of transparency, which is illustrated by the following chronology of activities undertaken by the Agency:
• On18.02.2009theAgencylaunchedpublicconsultations, according to Article 41 of the Law, in relation with the Draft Decision on relevant service markets and the relevant geographic market. The timeframe for submission of comments and suggestions was 30 days. The submitted comments, suggestions and objections to the text of the Draft Decision on relevant service markets and the relevant geographic market, which was the subject of public consultations in the period from 18.02 – 18.03.2009, is available on the Agency’s website www.ekip.me;
• AfterobtainingtheopinionoftheCompetitionAuthority, the Council of the Agency adopted the Decision on relevant service markets and the relevant geographic market on 03.04.2009;
• Theworkinggroupformarketanalysisstartedto prepare the following questionnaires: a questionnaire for fixed networks, a questionnaire for mobile networks, a questionnaire for broadband access and a questionnaire for the data of the Broadcasting Centre. The questionnaires specified statistical, operative and financial data
1 Decision on relevant service markets and the relevant geographic market, “The Official Gazette of Montenegro”, No 29/09.
referring to the period of last three years, which was necessary for carrying out the process of the definition and analysis of relevant markets;
• On08.04.2009theAgencyforwardedtooperatorsthe Draft Specified Questionnaires allowing for 7 days for the submission of objections, suggestions and requests for additional clarifications. In subsequent communication with operators, this period was extended by 7 days;
• On28.04.2009theAgreementoncooperationwas signed between the Agency for Electronic Communications and the Competition Authority;
• TheAgencydeliveredtooperatorsharmonizedformats of Questionnaires on 04.05.2009, with obligation of the latter to supply the data required by Questionnaires within 30 days at the latest;
• TheWorkinggroupformarketanalysisattendedtheSeminar on relevant market analysis, according to the European Commission New Recommendation, which was organized by TAIEX (EC) and held in Podgorica in the period from 4 – 5 June 2009;
• TheCouncilof theAgency forElectronicCommunications and Postal Services adopted at its session on 03.07.2009, the text of the Methodology for the conduction of the process of relevant market analysis, which is available at the Agency’s web site ;
• Intheperiod27–30October2009,theworkinggroup for market analysis paid a working visit to Slovenian regulatory authority;
• Intheperiod01–03December,anexpertengagedby the TAIEX paid a working visit to the Agency for the purpose of the final check of drafted documents – analyses of relevant markets, and final verification of the project;
• On26.05.2010,theAgencylaunchedapublichearing on the Draft analysis of relevant markets and Draft decision for the operators with the SMP in relevant markets, setting the period of 2 months for submitting objections, views and suggestions. This period was extended at the request of Crnogorski Telekom;
• TheAgencyplacedonitswebsiteallobjections,views and suggestions supplied by participants in the consultation process, in order to meet the principle of transparency and implement the best practice of European regulators;
• TheAgencyreviewedwithdueconsiderationall submitted general and individual objections and comments of operators concerning the Draft Documents and prepared its own views about them, which are also available on the Agency’s website,
• Afterthecompletedconsultationprocessandthereview of objections and comments supplied by operators regarding the Draft Analysis and Draft Decision, on 12.11.2010 the Agency issued the Decision on designation of the operators with significant market power in relevant markets.
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1.1.4. Supervision over the implementation of the regulatory remedies by operators with significant market power on relevant markets, imposed by the Agency’s decisions on the basis of analyses of relevant markets carried out in 2010
During 2011 the Agency conducted supervision over the implementation of regulatory remedies imposed on SMP operators by the Agency’s decisions of 11. 11. 2010, which followed the analyses of seven relevant markets in compliance, in compliance with the Decision on relevant service markets and the relevant geographic market (“Official Gazette of Montenegro” No 29/09).
By those regulatory remedies the Agency created a stimulating environment in terms of elimination or reduction of barriers to entry to a relevant market, which would lead to a higher degree of market competitiveness and, in the long run, maximize benefits for end-users in relation with the selection of providers and innovative services, more suitable prices of services and a better quality of services.
The market of access to public telephone network at a fixed location for residential and non-residential customers – retail level
The Agency imposed appropriate regulatory remedies regarding both wholesale and retail levels on Crnogorski Telekom A.D. Podgorica, as the operator with significant market power in the relevant retail market of access to public telephone network at a fixed location for residential and non-residential customers.
Crnogorski Telekom A.D. Podgorica, following the prescribed regulatory obligation of transparency on the wholesale level related to providing the facilities of carrier selection and carrier pre-selection, published the Reference Interconnection Offer in February 2011, which, inter alia, defined conditions and prices for providing the services of carrier selection and carrier pre-selection. Also, following the obligation of transparency related to the obligation of leasing subscriber lines, Crnogorski Telekom A.D, Podgorica published the Offer for providing the service of leasing subscriber lines on wholesale level in February 2011.
The obligations on retail level were prescribed by the Rulebook on price regulation for retail electronic communications services provided over public fixed telephone networks (“Official Gazette of Montenegro” No 52/11), which regulates the issues like: the methods of price control; the prohibition of competition constraint by setting excessive or predatory pricing; the prohibition of undue preferences for a specified end-user by the implementation of the obligation of non-discrimination and transparency, and the prohibition of unjustified tying of some services.
Market of call origination on public telephone network, provided at a fixed location – wholesale level
Crnogorski Telekom A.D. Podgorica, as the operator with significant market power in this relevant market, and according to the imposed obligation of transparency in providing the of service of call origination, published the Reference Interconnection Offer in February 2011, in compliance with the Analysis and defined conditions for providing of this wholesale service.
Crnogorski Telekom A.D Podgorica started to apply the prices defined by the Analysis of this relevant market on the day of publishing of the RIO, while the application of target prices began one year following the issue of the Agency’s Decision, i.e. since 11. 11. 2011. The target price of call origination within the network code of the access point was reduced from 2.25 €c/min, which had been valid before the issue of the Agency’s Decision, to 0.93 €c/min at the end of 2011, while the price of national call origination fell from 2.7 €c/min to 1.07 €c/min. The stated target prices were established by the Agency by the application of a benchmarking method, i.e. reference values, which is an interim arrangement until the Agency has been able to apply cost-oriented prices.
The Agency’s objective was to ensure more suitable wholesale conditions and thus contribute to the development of an efficient competition by reducing the prices of call origination within the network code of the access point, and the prices of the service of national call origination defined within the obligation of price control and keeping cost accounting.
Market of call termination on individual public telephone networks, provided at a fixed location – wholesale level
Crnogorski Telekom A.D Podgorica and M:Tel d.o.o. Podgorica, as operators with significant market power in this relevant market, and following the obligation of transparency prescribed within regulatory remedies relating to the provision of service of call termination, published the Reference Interconnection Offer in February 2011, in compliance with the conditions for the provision of the wholesale service, defined in the Analysis.
When setting the call termination prices, the Agency applied proportionate degree of asymmetry of the prices of call termination on M:Tel network compared to respective prices on Crnogorski Telekom network, which gradually decreased from50%inthefirstyearofimplementationto16%inthethird year of asymmetry application, after which period the prices were equaled the price of call termination on Crnogorski Telekom network.
Crnogorski Telekom A.D Podgorica and M:Tel d.o.o Podgorica started to apply the prices defined by the Analysis of the relevant market on the day of publication of Reference Interconnection Offers, whereas the target prices started to be applied one year following the issue of the Agency’s Decision, i.e. since 11. 11. 2011. The prices of the service of call termination on the fixed network (local termination) of Crnogorski Telekom were reduced from 2.25 €c/min, which had been in force before the issue of the Agency’s Decision, to the target price of 0.93 €c/min, and the price of call termination on fixed network
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(single transit) of Crnogorski Telekom was reduced from 2.7 €c/min to 1.07 €c/min. Also, the price of the service of call termination on M:Tel fixed network was reduced from 3.00 €c/min (before the issue of the Agency’s Decision) to the target price of 1.42 €c/min.
The setting of asymmetric termination prices on fixed network was justified by the fact that M:Tel d.o.o. did not enjoy the same advantages of the economies of scale and that a high degree of asymmetry was present, i.e. the difference in significant market power between these two operators in terms of the number of fixed access lines and the number of subscribers. The aim of the Agency when introducing asymmetric prices was to encourage the entry of new players to the market who would invest into their own access network infrastructure.
Market of access to network infrastructure (including shared or fully-unbundled access at a fixed location) – wholesale level
Crnogorski Telekom A.D. Podgorica, following its obligation of transparency, published the Reference Offer for local loop access in February 2011, by which it introduced new wholesale services, such as: the service of shared or fully unbundled access to infrastructure.
Crnogorski Telekom A.D. Podgorica, following the obligation of price control and cost accounting, implemented the prescribed prices, such as: the price of monthly subscription for the full access to the local loop of 3.88 €, and the price of monthly subscription for shared access to local loop of 1.16 €. When setting these prices, the Agency applied the methodology of calculation of wholesale prices by reducing retail prices, i.e. „Retail Minus“ method, which, in compliance with ERG2 Report on the examples of best regulatory practices relating to the services of unbundled access to local loop and wholesale broadband Internet access, enables profitable operation of prospective alternative operators and prevents Price-squeeze. The estimation of the amount of “minus” was made by comparing the conditions offered by a similar type of operator in comparable markets.
Crnogorski Telekom A.D. also applied the prescribed reduction in price for the use of cable ducts space in PE pipes Ø 40 mm, placedinPVCpipeØ110mm,from36.00€cent,whichhadbeen in force before the issue of the Agency’s Decision, to 9.45 €cent a month per RM.
When calculating the amount of monthly subscription for shared use of ducts, the Agency used the results of the expertise which was based on a simplified costing model, where the lease prices of ducts for 1 meter/month for different profiles of used pipes were based on incremental costs.
The aim of the Agency, guided by the goals of promoting infrastructure competition in the initial stages of creating a competitive environment, was to impose on operators with significant market power regulatory obligations of wholesale access services and their resale, which is justified by the goals of attracting new providers into the market and increasing the level of utilization of existing infrastructure.
2 ERG - European Regulators Group)
Broadband access market – wholesale level
Crnogorski Telekom A.D. Podgorica, meeting the obligation of transparency, published the Reference Offer for wholesale broadband access in February 2011. After the analyses of the relevant market, the Agency imposed on Crnogorski Telekom the obligation to provide access point for routing the traffic on the IP level, on Ethernet and on DSLAM.
Crnogorski Telekom A.D, Podgorica, in accordance with the obligation of price control and cost accounting when setting wholesale price of bit-stream access, defined the amounts of monthly fees by use of the “Retail–42%“principle,incompliancewith the Price List that is currently in force.
The price of monthly fee for bit-stream access was established according to the optimum methodology for pricing of these relevant services, i.e. the methodology of calculating the amount of wholesale prices by reducing retail prices, that is “Retail minus“ methodology, which according to ERG Report on application of best regulatory practices relating to services of unbundled access to the local loop and wholesale broadband Internet access, enables profitable operation of a potential alternative operator and prevents price-squeeze. The estimation of the amount of “minus” was made by comparison with the conditions offered by a similar operator in comparable markets.
With regard to regulatory remedies in this relevant market, the aim of the Agency was to create conditions for achieving competitiveness with regard to the conditions of access to essential network resources of the operators with significant market power.
Terminal or trunk segments of leased lines, regardless of the technology used to provide leased or dedicated capacity –wholesale level
Crnogorski Telekom A.D, following the obligation of transparency, published the Reference Offer for terminal segments of leased lines on wholesale level in February 2011.
Crnogorski Telekom A.D., following the obligation of price control and cost accounting, set the prices of leased lines based on the capacity and length of a leased line, and in compliance with the prescribed price caps for leased lines, according the Recommendation of the European Commission 2005/268/EC on price aspects of wholesale leased lines. The wholesale prices of leased lines for this segment were much more favourable than the ones which had been in force before the issue of the Agency’s Decision, and it also created conditions for the re-sale of leased lines.
After the publication of the Reference Offer for the terminal segment of leased lines - wholesale level, the Agency required from Crnogorski Telekom to harmonize retail prices with the published Offer. Crnogorski Telekom submitted the Price List of leased lines for the retail segment with more favourable prices of leased lines, thus creating conditions for non-residential customers, which are mainly the users of leased lines, to do business in more suitable environment.
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The market of call termination on individual mobile networks – wholesale level
Operators T-Mobile d.o.o Podgorica,Telenor d.o.o Podgorica and Mtel d.o.o. Podgorica, following the obligation of transparency, published Reference Interconnection Offers for mobile networks in February 2011.
The operators with significant market power in this relevant market started to apply the prices defined by the Analysis on the day of publication of their reference offer, while the target price applied a year after the issue of the Agency’s Decision, i.e. since 11.11.2011. The target price of the service of mobile termination was reduced from 10.00 €c/min, which had been in force before the issue of the Agency’s Decision, to 7.06 €c/min at the end of 2011.
When setting the price of the relevant service, the Agency applied the benchmarking method from the Document of the European Regulatory Group of July 2009. In the conclusions of the mentioned document it was stated that there were considerable differences in price levels for mobile termination from country to country, which had arisen from various approaches to regulation but not from the differences in the level of cost-oriented prices, and that, therefore, the benchmarking method was optimal in regulation of the price for this relevant service.
By reducing the prices of the service of call termination on mobile networks, the aim of the Agency was to prevent the operators with significant market power to benefit from the SMP status in relevant markets by charging excessive wholesale prices.
1.1.5 Legal ground for carrying out the process of definition and analysis of additional five relevant markets
The Law on Electronic Communications in Article 8 defines, inter alia, the competencies of the Agency to carry out market control, designate operators with significant market power and undertake necessary action to prevent negative effects of the operators’ significant market power. According to Article 41 of the Law, the Agency adopted a draft Decision on relevant service markets subject to verification by the application of the Three-Criteria Test, which was the subject of public consultations in the period 28. 01– 02. 03. 2011.
After obtaining the opinion of the Competition Authority and having completed the public consultative process, the Council of the Agency for Electronic Communications and Postal Services, on its session on 31.03.2009, adopted the Decision on relevant service markets subject to verification by the application of the Three-Criteria Test (“Official Gazette of Montenegro”, No 19/11). Also, this Decision defined the following relevant service markets:
1. Retail market of publicly available services of local and long-distance calls for non-residential and residential customers, which are provided at a fixed location,
2. Retail market of publicly available services of international calls for non-residential and residential customers, which are provided at a fixed location,
3. Wholesale market of leased lines’ trunk segments,
4. Wholesale market of access and call origination on public mobile telephone networks,
5. Wholesale market of transmission and emission of broadcasting signals.
1.1.6. Chronology of the Agency’s activities in the process of analysis of five additional relevant markets during 2011
On 28. 01. 2011 the Agency launched public consultations according to Article 41 of the Law, in relation with the Draft Decision on relevant service markets which were subject to verification by application of the Three Criteria test. The deadline for sending comments and views was 02. 03. 2011. The overview of the submitted comments, views and objections to the text of the Draft Decision on relevant service markets which are subject to verification by application of the Three Criteria Test, as well as the Agency’s opinion about them, can be found at the Agency website.
After obtaining the opinion of the Competition Authority No 01-81/2 of 30. 03. 2011, and having completed the process of public consultations, the Council of the Agency for Electronic Communications and Postal Services, on its session of 31. 03. 2011, adopted the Decision on relevant service markets which were the subject of verification by application of the Three Criteria Test (“Official Gazette of Montenegro” No 19/11).
For the purpose of application of the Three Criteria Test on relevant markets, the Agency prepared questionnaires and delivered them to the telecommunications operators on 11. 04. 2011, setting the period of one month for submitting data under the questionnaires.
The Agency applied the Three Criteria Test on this relevant market and on 05. 07. 2011 delivered the results to the Competition Authority for obtaining opinion on the draft document and the fulfillment of the Three Criteria Test. The Competition Authority stated in its document No 01-148/2 of 07. 2011 that submitted drafts made a good-quality basis, both for ex ante regulation and potential cases that the Competition Authority would initiate, if appropriate. After obtaining the
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opinion of the Competition Authority, the Agency started a public consultative process about the draft document about the fulfillment of the Three Criteria Test on 02. 08. 2011, and invited all stakeholders to submit their comments on, views of or objections to this draft document to the Agency, either in writing or by e-mail ([email protected]), no later than 01. 09. 2011, after which date the received suggestions and comments would be reviewed and the final text of the document issued.
After the receipt of operators’ comments, views and objections related to applied three criteria test on the mentioned relevant markets, the Agency drafted its own views about them. The Agency’s views were published on the Agency’s website on 20. 10. 2011, where the Agency gave the information that it had found that all three criteria were fulfilled in those relevant markets and, therefore, the relevant markets were subject to ex ante regulation, about which the Competition Authority had also given a positive opinion. Consequently, the Agency stated that all conditions had been met for carrying out the process of analysis of relevant markets. On 10. 11. 2011, the Agency launched the process of public consultations about the Draft Opinion about the designation of the SMP operators on relevant markets, and about the Draft Analysis of relevant markets, and invited all stakeholders to submit their comments, views and objections, no later that 10. 12. 2011. The operators were advised thereabout at the same time.
The Agency reviewed the comments, views and objections submitted by operators, accepted justified views and objections, and determined final texts of the carried-out analyses, as well as the final text of the decision.
1.1.7. Regulatory remedies prescribed to operators with significant market power in five additional relevant markets
Along with the control activities related to implementation of regulatory remedies, after the finished analyses of 7 relevant markets, the Agency also completed the analyses of 5 additional relevant markets during 2011 for which it had already proved their fulfillment of the Three Criteria Test.The following relevant markets were examined:
1. Retail market of publicly available services of local and long-distance calls for non-residential and residential customers, which are provided at a fixed location,
2. Retail market of publicly available services of international calls for non-residential and residential customers, which are provided at a fixed location,
3. Wholesale market of trunk segments of leased lines,
4. Wholesale market of access and call origination on public mobile telephone networks,5. Wholesale market of transmission and
emission of broadcasting signals.
The Agency identified operators with significant market power in these markets and imposed necessary regulatory remedies by its decisions of 30. 12. 2011.
Retail market of publicly available services of local and long-distance calls for non-residential and residential customers, which are provided at a fixed location
Retail market of publicly available services of local and long-distance calls for non-residential and residential customers, which are provided at a fixed location includes: calls to geographic numbers (to national fixed networks) and calls to numbers in national mobile electronic communication networks, regardless of whether it was a standard publicly available telephone service, calls by the facility of carrier selectionandcarrierpre-selection,ormanagedVoIPcalls.
In this relevant market, the Agency prescribed to Crnogorski Telekom A.D. Podgorica, as the SMP operator, the following remedies on wholesale level:
• Theobligationtoprovidethefacilityofcarrierselection/carrier pre-selection, with additional obligations of transparency, non-discrimination, price control and separate accounting.
• Theobligationto leasesubscriber linesonwholesale level, with additional obligations of transparency, non-discrimination, price control and separate accounting. The Agency also imposed on Crnogorski Telekom A.D. Podgorica, as the SMP operator in this relevant market, the regulatory remedies on retail level, such as:
• Theobligationofaccountingseparation,• Theobligationtoregulatethepricesofretail
services, including: the prohibition of setting excessive prices; the prohibition of competition constraint by setting excessive or predatory prices; the prohibition of granting undue preferences to specified end-users, and the prohibition of undue tying of some services
• Theobligationofnon-discrimination,and• Theobligationoftransparency.
Retail market of publicly available services of international calls for non-residential and residential customers, which are provided at a fixed location
The retail market of publicly available services of international calls for non-residential and residential customers, which are provided at a fixed location, includes: calls to geographic numbers (to international fixed networks) and calls to numbers in international mobile electronic communications networks, regardless of whether it was a standard publicly available telephone services, calls by the facility of carrier selection, or managedVoIPcalls.
The Agency imposed on Crnogorski Telekom A.D. Podgorica, as the SMP operator in this relevant market, the regulatory remedies on wholesale level, such as:
• Theobligationtoprovidethefacilityofcarrierselection/carrier pre-selection, with additional obligations of transparency, non-discrimination, price control and separate accounting.
• Theobligationto leasesubscriber linesonwholesale level, with additional obligations of transparency, non-discrimination, price control and accounting separation.
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Also, the Agency imposed on Crnogorski Telekom A.D. Podgorica, as the SMP operator in this relevant market, the regulatory remedies on retail level, such as:
• Theobligationofaccountingseparation,• Theobligationtoregulatethepricesofretail
services, including: the prohibition of setting excessive prices; the prohibition of competition constraint by setting excessive or predatory prices; the prohibition of granting undue preferences to specified end-users, and the prohibition of undue tying of some services.
• Theobligationofnon-discrimination,and• Theobligationoftransparency.
Wholesale market of trunk segments of leased lines
The wholesale market of trunk segments of leased lines refers to publicly offered electronic communication services, such as: trunk segments of leased lines regardless of the capacity, when terminal points are in the territories of various municipalities or various countries, and Ethernet lines regardless of the capacity, when terminal points are in the territories of various municipalities or the territories of various countries.
The Agency imposed on Crnogorski Telekom A.D. Podgorica, as the SMP operator, the following regulatory remedies in this relevant market:
• Theobligationtoprovideaccesstonetworkelements and their use,
• Theobligationtoprovideequaltreatment-non-discrimination,
• Theobligationoftransparency-referenceinterconnection offer,
• Theobligationofaccountingseparation,• Theobligationofpricecontrol andcost
accounting.
Wholesale market of access and call origination on public mobile telephone networks
The relevant market of access and call origination on public mobile telephone networks includes: the services to provide all sorts of access by mobile network operators and the services of access for their own purposes and the services of call origination and SMS messages on their own networks and the networks of other operators provided for their own purposes.
The Agency imposed on Telenor-u d.o.o Podgorica, Crnogorski Telekom A.D, Podgorica and Mtel d.o.o Podgorica, as SMP operators, the following remedies in this relevant market:
• theobligationtoprovideaccesstonetworkelements and their use,
• theobligationtoprovideequaltreatment– non-discrimination,
• theobligationtoprovidetransparency,• theobligationofaccountingseparation,• theobligationofpricecontrolandcost
accounting.
Wholesale market of transmission and emission of broadcasting signals
The Agency identified two wholesale markets of the transmission of audio-visual contents by electronic communications networks, such as:
• thewholesalemarket of the service oftelevision program broadcasting by electronic communication networks, and
• wholesalemarketoftheserviceoftransmissionofradio programs over electronic communication networks.
The Agency imposed on the Broadcasting Center A.D. Podgorica, as the SMP operator, the following regulatory remedies in these relevant markets:• theobligationtoprovidetransparency,reference
offer,• theobligationtoprovideequaltreatment‐non-
discrimination,• theobligationofaccountingseparation,• theobligationtoprovidetheaccesstonetwork
elements and their use, and • theobligationofpricecontrolandcostaccounting.
1.1.8. Planned activities on the analyses of additional relevant markets during 2012
In the course of 2012, the Agency will start evaluation of the degree of competitiveness and the effects of the regulatory remedies implemented after the first round of analyses of relevant markets.
The Agency may, as appropriate, identify in the forthcoming period some electronic communication services, provided at the prices and under conditions which are not favourable for end-users, and consider the possibility of defining a new market, so that regulatory remedies could be introduced in that relevant market after the market review.
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1.2. The project of accounting separation and cost accounting
1.2.1. Legal basis for implementation of the obligation of accounting separation and cost accounting
The obligation of accounting separation
Article 46 of the Law on Electronic Communications and Postal Services regulates the obligations of operators with significant market power related to accounting separation. That Article prescribes the obligation of an SMP operator to take measures to provide the control of separate accounting control for all activities referring to the service of provision of interconnection or operator access. The Agency particularly imposes this obligation on vertically-integrated operator, where it is required that the operator delivers accounting information, including the data on the income from third parties, and to provide transparency of its all wholesale or internal billing rates.
Obligation of price control and cost accounting
Article 48 of the Law prescribes the obligation of the SMP operators in relevant markets to set cost-oriented prices, i.e. that the operator shall prove that the prices are cost-based with reasonable rate of return on investments. In order to meet these obligations, the operator shall apply the method of cost accounting, which is established by the Agency’s decision.
The Agency may determine the form and methodology of accountancy which must be applied by the SMP operator, including categorization and breakdown of costs, and the rules to be implemented for cost distribution. When checking the fulfillment of the obligation, the Agency may apply the methods of cost accounting which are different from those applied by the operator.
Further, the Agency may use comparisons with the prices from comparable markets or markets with developed competition, taking account of the specific circumstances in the domestic market.
1.2.2. The purpose of accounting separation and cost accounting
The purpose of introducing accounting separation, and price control and cost accounting is to provide equal and transparent criteria which the SMP operator in relevant market is to apply during cost allocation to services provided by that operator, as well as the allocation of costs, income, property, liabilities and capital to individual activities and services. Accounting separation provides for system allocation of
costs, revenues and employed capital among business units of the regulated entity, markets, segments and the services of vertically-integrated operator. Accounting separation and cost accounting also ensure that each financial report includes only costs, revenues and employed capital referring to regulatory entities, segments, markets and services. The methodology of cost accounting allows for implementation of accounting separation and verification of cost-orientation for the prevention of cross-subsidies, excessive prices or inefficient behaviour of SMP operators in the relevant market. The model of accounting separation, which is applied by an operator with the SMP in the relevant market, shall fully meet regulatory obligations by providing financial information in order to show full compliance with regulatory obligations.
The model of cost accounting is necessary where the SMP operator in a relevant market has been imposed the following remedies:
• Costallocationtomarkets/segments/orservices,
• Cost-orientedpricesonwholesaleandretailmarkets, including the prices of transfer services,
• So-called“retail minus” tariffs, and • FinancialreportingattheAgency’srequest.
The obligation of price control and cost accounting is imposed both for wholesale and retail markets, in order to ensure the methodology of implementation of appropriate costing model, i.e. to provide for SMP operators in the relevant market a reasonable rate of return on employed capital, taking into account the included rate of investment risk, which means that capital cost is to be calculated as weighted average cost of capital (WACC).
The Agency imposed on Crnogorski Telekom A.D. Podgorica, as the SMP operator of fixed electronic communications network, the obligation to implement accounting separation and cost accounting, in the manner and within timeframes defined by the Methodology of accounting separation and cost accounting.
The Agency, along with the selected consultant KPMG Croatia, defined the methodology of cost accounting based on the method of Fully Distributed Costs (FDC), switching later to the methodology of Long Run Incremental Costs (LRIC), that is, using in the first phase of implementation historical costs, switching later to the calculations based on current costs.
One of so-called accounting models is based on the methodology of Historical, Fully Distributed Costs – FDC, also known as Fully Allocated Costs – FAC. The requests for accounting separation may be based on the principles of historical cost accounting (HCA) or current cost accounting (CCA). It shapes two separate concepts, which are normally combined for analytical purposes. The costs for various purposes are often recorded in accounting books and used for own purposes. By application of this principle, all relevant incurred costs, revenues and liabilities of an operator are allocated to associated services, for the application of the principle of causality. In this way, directly and indirectly attributed costs are allocated by implementation of techniques, like ABC (Activity Based Costing) or processing of statistical data. ABC methodology is one of the techniques within management accounting which allows for determination of cause-and-
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effect relationships between costs and services or products. According to the ABC methodology, services and products are seen as a sequence of activities, where each of them uses resources of the undertaking and therefore generates costs. By this methodology, based on the causes of costs, it is possible to monitor and allocate costs according to performed activities, and to determine clear cause-and-effect relationships between the activities, their costs and associated services arising from them.
The application of ABC methodology makes it possible to calculate each cost caused by an activity within the undertaking (e.g. building of electronic communication network, processing of orders, etc.), and allocation of this cost to services and products by application of a cause-and-effect relationship between the cost and its cause. This method of allocation allows allocation of resources directly included in a service provision, as well as the allocation of general and overhead costs to individual products and/or services.
The aim of the analysis with FDC model is to allocate some costs to specified services and network elements. It can be done by allocation of costs to the relative capacity used for each service or by minutes of network elements used. FDC approach examines already incurred costs of existing services and allocates part of joint and general costs for each individual service. The method is quite practical as it is based on general available data and explicit assumptions. The point is that service costs, determined according to FDC model tend to strengthen insufficiently effective parts of telecommunication network. However, this method does not take into account the effects of implemented new technologies. From the practical point of view, the analyses carried out with FDC model might be the most realistic type of analysis, which many regulators can apply on the basis of available data.
1.2.3. Chronology of the Agency’s activities in implementation of the project of accounting separation and cost accounting in 2011
The chronology of the Agency’s activities on the implementation of this project during 2011 was as follows:
• On01.02.2011,theAgencyalongwiththeselectedconsultant ‐ KPMG Croatia ‐ started activities on the Project of accounting separation and cost accounting, following the established time schedule.
• On01.04.2011draftconsultativedocumentwasprepared – Methodology for accounting separation and cost accounting, which was the subject of a consultative process. It included an overview of regulatory financial reports, the proposed model for cost accounting for each relevant market and associated market segments, guidelines for the preparation of cost accounting system, etc., with an established plan for consultations to last one month. The deadline for submitting operators’ comments and objections was 01. 05. 2011.
• On27.05.2011theMethodologyforaccountingseparation and cost accounting was adopted.
• On30.05.2011,aDecisionontheadoptionofMethodology for accounting separation and cost accounting was issued. On the same day a decision was issued to Crnogorski Telekom A.D., as the SMP operator in the relevant market, imposing on this operator the obligation to implement accounting separation and cost accounting.
• On01.09.2011,CrnogorskiTelekomA.D., incompliance with the time schedule envisaged by the adopted Methodology for accounting separation and cost accounting, forwarded to the Agency draft documents about Regulatory accounting separation and the Document about the allocation model.
• On30.09.2011,theAgency,incooperationwiththe selected consultant KPMG Croatia, drew up its views of and objections to the text of the mentioned documents.
• On30.11.2011CrnogorskiTelekomA.D., incompliance with the Agency’s views and objections, submitted to the Agency draft documents of Regulatory accounting separation and the Document of allocation methodology.
1.2.4. Forthcoming Agency’s activities on the implementation of the Project of accounting separation and cost accounting
The activities on this project have continued in 2012 according to the time schedule envisaged in the Methodology for accounting separation and cost accounting. The Agency expects from that Crnogorski Telekom A.D. at the end of the second quarter of 2012 to submit revised regulatory financial reports for approval. Also, the Project is expanding to those relevant markets in which the Agency proved during 2011 that Crnogorski Telekom A.D. has significant market power, after the application of the Three Criteria Test had shown the fulfillment of the conditions from the three criteria.
1.3. Development of competition in electronic communication market
Despite world economic crisis, telecommunications are recording a continuous growth both in terms of investments and revenues. Nevertheless, that growth was less in comparison with previous year, so the operators have been looking for new ways to maintain and improve their operation by offering various packages and benefits for end-users. Due to strong competition, there has been a constant need for improving and expanding own offering by reducing prices, responding to competitors’ moves and anticipating those moves. New technologies and services are being developed all the time, and the old ones are being improved. On the other hand, the customers have become selective and fully aware of their needs and rights arising from the Law on Electronic Communications.
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1.3.1. Fixed telephonyThe number of subscribers in fixed telephony at the end of 2011 amounted to 170,856, which matched the penetration of 27.56%.In2011,aslightrisewasrecordedcomparedtotheendof2010,whenthepenetrationwas27.50%.Thefactthatthepenetration in fixed telephony remained more or less on the same level shows that regardless of the existence of so-called fixed-to-mobile substitution, fixed telephony still has its users who have opted for this kind of service. Out of the number of fixed telephony connections, T-Com had 167,454 connections (T-Com 98.01) and M:Tel 3,402 (1.99 ) connections. Operator M:Tel offered the services of fixed telephony over Wi-Max network provided in radio frequency band of 3,400-3,600 MHz.
98,01%
1,99% T-Com
M:Tel
Shares of �xed telephony operators according to the number of connections
The total number of ISDN connections at the end of December 2011 totaled to 5,273, out of which 5,035 were ISDN-BA connectionsand238wereISDN-PRAconnections.OutofthetotalnumberofISDNconnections,2,554(48.44%)referredtoresidentialcustomersand2,719(51.66%)tonon-residentialcustomers.ThetotalnumberofISDNvoicechannelsattheendof last year amounted to 17,210 (according to the formula 2×ISDN-BA + 30×ISDN-PRA).
The text below presents a comparative overview of the prices of Crnogorski Telekom A.D. (incumbent operator) services in fixed telephony, which was used for comparisons with relevant reports of international institutions (European Commission, Cullen International). For the comparison of service prices in Montenegro with identical services in other countries of the region I Report Cullen International from September 2011 was used – Supply of services in monitoring regulatory and market developments for electronic communications and information society services the countries of the region in Enlargement Countries.3 This was the last report prepared by Cullen International, and the next will be published in the middle of 2012.
Connection charge in fixed telephony
AconnectionchargetofixednetworkinMontenegrois65.00€withVATincluded.Thischargereferstobothcategoriesofconsumers (residential and non-residential). The Figure below shows the comparison with neighbouring countries:
65 60,45
35,89
23,73
82,56
10,093,28
40,23
17,71
37,66
0102030405060708090
Fixed telephony connection charge
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSE
On the basis of the Figure it is possible to conclude that the connection charge to fixed network in Montenegro is above the average in the countries of the region amounting to 37.66 €, and it records a fall compared to 2010, when it was 39.21 €. It should be noted that following the Agency’s initiative, Crnogorski Telekom A.D. reduced in March 2012 the connection charge tofixednetworkfrom65.00€(VATincluded)to20.00€(VATincluded),sothatthischargeinMontenegroisnowbelowtheaverage in the countries of the region, which amounts to 37.66 €.
3 (Report I - Supply of services in monitoring regulatory and market developments for electronic communications and infor-mation society services in Enlargement Countries, Septembar 2011)
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Monthly subscription fee
Monthly subscription fees that the users of fixed telephony services provided by Crnogorski Telekom A.D pay is 5.97 €, with VATincluded.Thispricereferstobothcategoriesofcustomers(residentialandnon-residential).ThefollowingFigurepresentsthe comparisons with neighbouring countries:
5,97 5,24 5,87,64
9,91 9,3610,15
3,73
10,8
7,62
15
0
2
4
6
8
10
12
14
16
Monthly subscription fee in �xed telephony
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSEEU27
The Figure shows that the amount of monthly subscription fee in Montenegro is below the EU average (15.00 €). Compared to the respective fees in the countries of the region, this fee in Montenegro is also below the average (7.62 €).
Price of local calls
The Figure below illustrates the prices of a 10-minute local call on the network of incumbent operator in the countries of the region,withindicatedaverageintheEU27.TheratesareexpressedinEuros,withVATincluded.
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSEEU27
0,22
0,110,18 0,19
0,4
0,12
0,66
0,22 0,25
0,41
0,26
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
Price of a 10-minute local call
Based on the Figure, it can be concluded that the price of a 10-minute local call on the network of incumbent operator in Montenegro(22.20€cent,withVATincluded)isundertheEUaverage(41.00€cent,VATincluded),andalsoundertheaverageoftherespectivepricesinthecountriesoftheregion.(26.00€cent,withVATincluded).
The trend in local call tariffs in Montenegro and in neighbouring countries during 2008, 2009, 2010 and 2011 is illustrated in the Figure below.
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HR IS ME MK TR ALBA-bh
BA-ts
BA-ht
RS XK
Apr-08 0,39 0,19 0,22 0,19 0,42 0,10 0,18 0,12 0,16 0,04 0,12
Jan-09 0,38 0,15 0,22 0,19 0,38 0,20 0,20 0,12 0,16 0,05 0,12
Oct-09 0,39 0,14 0,22 0,19 0,37 0,22 0,20 0,12 0,16 0,05 0,12
Jul-10 0,39 0,17 0,22 0,19 0,45 0,27 0,20 0,18 0,16 0,05 0,12
Jun-11 0,40 0,25 0,22 0,19 0,66 0,22 0,20 0,18 0,16 0,11 0,12
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
euro
Prices of long distance (national) call
The Figure below illustrates the prices of a 10- minute national (long-distance) call on the network of incumbent operator in thecountriesoftheregion,withindicatedaverageintheEU27.ThepricesareexpressedinEuros,withVATincluded.
0,6
0,18
0,35
0,57
0,4
0,12
0,66
0,55
0,25
0,72
0,41
00,10,20,30,40,50,60,70,8
Price of a 10-minute long-distance call
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSEEU27
Based on this Figure, the prices of a 10-minute long distance call on the network of the incumbent operator in Montenegro (60.00€cent,withVATincluded)arebelowtheEUaverage(72.00€cent,withVATincluded),butabovetheamountsoftherespectivepricesinthecountriesoftheregion(0.41€cent,withVATincluded).
The trend in the prices of long distance calls in Montenegro and neighbouring countries during 2008, 2009, 2010 and 2011 is given in Figure below.
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HR ME MK TR AL BA-bh BA-ts BA-ht RS XK
Apr-08 0,39 0,59 0,58 0,44 1,19 0,42 0,54 0,54 0,22 0,12
Jan-09 0,38 0,59 0,58 0,45 0,97 0,42 0,54 0,54 0,27 0,12
Oct-09 0,39 0,59 0,58 0,39 0,67 0,42 0,54 0,54 0,26 0,12
Jul-10 0,39 0,59 0,58 0,48 0,57 0,42 0,44 0,44 0,23 0,12
Jun-11 0,40 0,60 0,57 0,66 0,55 0,35 0,35 0,35 0,18 0,12
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
euro
When national (local and long-distance) fixed telephony calls are concerned, it should be pointed out that, in addition to Crnogorski Telekom, this type of service is also provided by M:Tel as an alternative operator, via WiMax network. Concerning the prices, M:Tel offers the service of national calls within its network at the price of 4.00 €cent/min. Therefore, the price of a 10-minute national (local and long-distance) call on the M:Tel network (0.40 €) is below the prices of national calls in the EU27 (where the average is 0.72 €) and also below the average in the countries of the region (0.41 €).
euro
BA-bh
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
IncumbentAlternative
0.399 0.600 0.574MK TR AL BA-ts BA-ht RS XKMEHR
0.658 0.545 0.3530 0.3530 0.3530 0.175 0.1160.363 0.400 0.193 0.345 0.527 0.4188 0.4188 0.4188 0.244 0.696
Prices of calls to mobile networks in Montenegro
The Figure below illustrates the prices of a 10- minute call from the network of the incumbent operator to mobile networks inthecountriesoftheregion.ThepricesareexpressedinEuros,withVATincluded.
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2,22
1,11 1,02
1,63
2,51
1,16
0,66
2,2
1,261,45
0
0,5
1
1,5
2
2,5
3
Price of a 10-minute call to mobile networks
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSE
BasedontheFigurebelow,thepricesofa10-minutecalltomobilenetworksinMontenegro(2.22€,withVATincluded)isovertheaverageoftherespectivepricesinthecountriesoftheregion(1.45€,withVATincluded).
The trend in the tariffs of calls to mobile networks in Montenegro and countries of the region during 2008, 2009, 2010 and 2011 is shown by Figure below.
HR IS ME MK TR AL BA-bh BA-ts BA-ht RS XK
Apr-08 2,69 1,00 2,22 1,93 1,61 3,75 0,86 0,92 0,92 1,32 1,84
Jan-09 2,65 0,73 2,22 1,92 1,88 3,16 0,87 0,93 0,93 1,21 1,86
Oct-09 2,69 0,67 2,22 1,93 1,63 2,43 0,93 0,93 0,93 1,16 1,16
Jul-10 2,70 0,80 2,22 1,92 1,76 2,32 1,11 1,11 1,11 1,01 1,16
Jun-11 2,51 1,26 2,22 1,63 0,66 2,20 1,14 1,02 1,14 1,11 1,16
0,000,501,001,502,002,503,003,504,00
euro
International call tariffs
When international call tariffs are concerned, the text below presents the tariffs of calls from fixed networks to fixed networks in Great Britain and the USA, as a representative example for the analyses of these tariffs.
The Figure below presents the price of a 10-minute international call from the fixed network of Telekom to Great Britain, expressed in Euros, with comparative tariffs for the same service in the countries of the region.
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1,76
2,49
4,18
1,89
3,71 3,71
0,65
1,3 1,351,7
2,33
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
Price of a 10-minute call to the UK
Macedonia
Albania
Montenegro
Serbia
B&H
Croatia
Kosovo
TurkeyIsl
and SSEEU27
The Figure gives rise to a conclusion that the tariff for a 10-minute international call from the fixed network in Montenegro toGreatBritain(UK)(1.76€,withVATincluded)isontheleveloftheEUaverage(1.7€,withVATincluded),butundertheaverageoftherespectivetariffsinthecountriesoftheregion(2.33€,withVATincluded).
The Figure below illustrates the prices for a 10- minute international call to Great Britain charged in Montenegrin market:
Price of a 10-minute call to the UK in �xed telephony market in EUR
1.8
1
1.7
3
0
0.5
1
1.5
2
2.5
3
3.5
Crnogoski Telekom PTT Inženjering VOIP Telekom Mtel
It leads to a conclusion that there is competition in the market of international calls, where the prices offered by alternative operators differ from the prices charged by Crnogorski Telekom.
The following Figure illustrates the tariff for a 10-minute international call from the fixed network to the USA, expressed in Euros, with comparative tariffs for the same service in the countries of the region.
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Macedonia
Albania
Montenegro
Serbia
B&HCro
atia
Kosovo
TurkeyIsl
and SSEEU27
4,68 4,52
5,98
1,89
5,77
4,4
0,651,3 1,35
1,72
3,39
0
1
2
3
4
5
6
7Price of a 10-minute call to the USA
The Figure demonstrates that in Montenegro the price of a 10- minute international call from the fixed network to the USA (4.68€,withVATincluded)isabovetheEUaverage(1.72€),aswellasabovetheaveragepricesinthecountriesoftheregion(3.39€,withVATincluded,whichrecordedafallcomparedto2010,whenitamountedto4.89€).ItshouldbenotedthatinMarch 2012 Crnogorski Telekom A.D. reduced the tariffs for calls to the USA. Thus in 2012, the price of a 10-minute international call to the USA amounts to 1.00 €, which is below the EU average (1.72 €), and also below the average of the respective prices in the countries of the region (3.39 €).
The following Figure presents the trend in the tariffs for international calls to the USA, in Montenegro and neighbouring countries during 2008, 2009, 2010 and 2011.
HR IS ME MK TR AL RS XK
Apr-08 5,88 4,68 1,91 0,57 2,48 7,13 10,70 10,70 5,37 4,37
Jan-09 5,80 4,68 1,90 0,58 1,66 7,18 10,77 10,77 4,95 4,41
Oct-09 5,89 4,68 1,91 0,58 1,37 7,18 10,77 10,77 4,71 4,41
Jul-10 5,90 4,68 1,88 0,70 1,37 7,18 8,97 9,69 4,13 4,41
Jun-11 5,78 1,36 4,68 1,89 0,66 1,30 7,18 5,98 8,72 4,53 4,41
0
2
4
6
8
10
12
euro EU-27: €1.72
BA-bh BA-ts BA-ht
The Figure below shows the tariffs for a 10-minute international call charged in Montenegrin market.
Price of a 10-minute call to the USA in EUR
4.68
1.61.2
4
00.5
11.5
22.5
33.5
44.5
5
Crnogoski Telekom PTT Inženjering VOIP Telekom Mtel
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The data above has shown that there is a competition in the market of international calls, where the prices offered by alternative operators are lower than the prices charged by Crnogorski Telekom.
Comparisons of fixed telephony prices offered by operators operating in Montenegrin market
Operator T-Com M:Tel
PackageStandard package
(billing at 60+1 second)
Tel. package
(billing at 15 seconds)Monthly subscription fee 5.97 5.00
Calls within network0.022=peak time
0.011= off-peak time0.015
Other fixed networks in MNE 0.069 0.044
MNE mobile networks0.22= peak time
0.111= off-peak time
0.123=Mobile M:Tel
0.189=Mobile MNEInternational calls to fixed networks in Serbia 0.13 0.044
International calls to mobile networks in Serbia 0.22 0.189
International calls to fixed networks in the region 0.13 0.200-0.250
International calls to mobile networks in the region 0.32 0.200-0.250
International calls to fixed networks in Europe 0.18 0.250
International calls to mobile networks in Europe 0.44 0.250
1.3.2. Mobile telephonyAt the end of 2011, the number of mobile telephony users in Montenegro amounted to 1,159,112, which corresponded to thepenetrationof186.94%.Outofthisnumber841,071accountedforprepaidusersand318,041forpostpaidusers.Theshares of prepaid and postpaid users and the shares of individual mobile telephony operators in the total number of users are shown in the following Figure:
72,56%
27,44%
prepaid
postpaid
Shares of pre-paid and post-paid subscribers in total subscribers
40,57%
34,68%
24,75%
Shares of operators in total customers
Telenor
M:Tel
T-Mobile
Out of the total number of mobile telephony users in Montenegro amounting to 1,159,112, mobile operator Telenor had 470,257users(or40.57%),T-Mobile401,958users(or34.68%)andM:Tel286,897users(or24.75%).
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Out of the total number of prepaid users amounting to 841,071, Telenor had 341,672 users, T-Mobile 272,036 users, and M:Tel 227,363 users. Out of the total number of postpaid users of 318,041, T-Mobile had 129,922 users, Telenor 128,585 users and M:Tel 59,534 users. Corresponding shares as per number of mobile operators’ prepaid and postpaid users (in percentages) are illustrated by the following Figures:
Telenor
M:Tel
T-Mobile
40,43%
40,85%
18,72%
Shares of operators in total post-paid customers
Telenor
M:Tel
T-Mobile
40,62%
32,35%
27,03%
Shares of operators in total pre-paid customers
Prices of mobile service telephony (the OECD methodology of “User basket”)
The best-known methodology for comparing service prices internationally is a harmonized OECD methodology for calculation of user baskets of services. Three OECD user baskets for the services in mobile telephony have been defined, one for each assumed category of users, and they are: low, medium and high user baskets, which vary according to the number of outgoing calls (distributed by distances, times of day when they are made and durations of the call) and the number of SMS messages over a month.
OECD basket consists of four components, such as:• a component related to connection charge, distributed over the period of 3 (three) years, i.e. it comprises
1/3 of connection charge,• acomponentcontainingthecostsofmonthlysubscriptionfee,• acomponentrelatedtooutgoingcallsmadeduringamonth,and• acomponentrelatedtosentSMSmessagesduringamonth.
Each of the three OECD user baskets for mobile telephony is defined by a specified number of outgoing calls and SMS messages sent during a month, in the following way:
• Lowuserbasket-30outgoingcallsinamonth,33SMSand0.67MMSmessages;• Mediumuserbasket-65outgoingcallsinamonth,50SMSand0.67MMSmessages;• Highuserbasket-140outgoingcallsinamonth,50SMSand1MMSmessages.
These calls are distributed according destinations in the following way: • InLowuserbasketoutgoingcallsaredividedinto: -callstofixednetwork,15%beinglocalcallsand7%nationalcalls, -callstomobilenetwork,48%beingcallstothesamenetworkand22%toothernetworks; -voicecalls8%.• InMediumuserbasket,outgoingcallsaredividedinto: -callstofixednetwork,14%beinglocalcallsand7%nationalcalls, -callstomobilenetwork,48%beingcallstothesamenetworkand24%toothernetworks; -voicecalls7%.• InHighuserbasket,outgoingcallsaredividedinto: -callstofixednetwork,13%beinglocalcallsand7%nationalcalls, -callstomobilenetwork,47%beingcallstothesamenetworkand26%toothernetworks, -voicecalls7%.
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When calculating a basket, each of these three baskets contains call distribution according to the time of day when calls are made, in the following way:
• Lowuserbasket-48%callsatpeaktime4,25%atoffpeaktime5and27%overtheweekend.• Mediumuserbasket-50%callsatpeaktime,24%atoff-peaktimeand26%overtheweekend.• Highuserbasket-60%callsatpeaktime,19%atoff-peaktimeand21%overtheweekend.
Call duration is distributed in the following way:• Lowuserbasket-1.5callstofixednetwork(localandlong-distance),1.6callstothesamemobilenetwork,
1.4 calls to other network and 0.8 voice calls.• Mediumuserbasket-1.8callstofixednetwork(localandlong-distancecalls),1.9tothesamemobile
network, 1.7 calls to other mobile network and 0.8 voice calls.• Highuserbasket-1.7callstofixednetwork(localandlong-distancecalls),1.9callstothesamemobile
network, 1.8 calls to other mobile network and 0.8 voice calls.
Minutes distributed in this way are divided according to destination in local and long-distance calls; on-net, off-net and voicemail, and after the calculation, the following distribution is made:
• Lowuserbasket-4.5localcalls,2.1long-distancecalls,14.4callson-net,6.6off-netand2.4voicemail.• Mediumuserbasket-9.1localcalls,4.55long-distancecalls,31.2on-netcalls,15.6off-netcallsand4.55
voicemail. • Highuserbasket-18.2localcalls,9.8long-distancecalls,65.8on-netcalls,36.4off-netcallsand9.8voicemail.
Distribution according to distance is followed by distribution according to call duration in minutes:• Lowuserbasket-6.75minutesoflocalcalls,3.15minutesoflong-distancecalls,23.04minutesofon-net
calls, 9.24 minutes of off-net calls and 1.92 minutes of voicemail. • Mediumuserbasket-16.38minutesoflocalcalls,8.65minutesoflong-distancecalls,59.28minutesofon-
net calls, 26.52 minutes of off-net calls and 3.64 minutes of voicemail. • Highuserbasket-30.94minutesoflocalcalls,18.62minutesoflong-distancecalls,125.02minutesofon-net
calls, 65.52 minutes of off-net calls and 7.84 minutes of voice mail.
After that distribution, the distribution according to time of day is made:• Lowuserbasket–outofthetotalnumberofminutes,48%tookplaceatpeaktime,25%atoff-peaktime
and27%callsweremadeovertheweekend.• Mediumuserbasket-outofthetotalnumberofminutes,50%tookplaceatpeaktime,24%atoff-peak
timeand26%callsweremadeovertheweekend.• Highuserbasket-outofthetotalnumberofminutes,60%tookplaceatpeaktime,19%atoff-peaktime
and21%callsweremadeovertheweekend.
When calculating any basket, a loan that is included in the subscription fee is deducted after the bucket evaluation, all inclusive call minutes are deducted from the basket before calculating monthly expenditure, with all inclusive minutes being distributed by destinations and the time of call setting up and minutes charged. Any inclusive SMS-messages shall be deducted from the basket before the calculation of the monthly fee consumption for SMS, provided that no negative value for SMS messages during a month can be got. During the calculation, no transfer of unused minutes to the next month is taken into account.
In the text below, there is a breakdown of:• thevalueoflowuserbasketinmobiletelephony,• thevalueofmediumuserbasketinmobiletelephony,• thevalueofhighuserbasketinmobiletelephony.
The value of low user basket in mobile telephony over a month is given in the following Table.
CountryUser basket (prices are in €, with VAT included)LowCrnogorski Telekom Telenor M:Tel
Montenegro (2010) 6.4 5.7 5.7Montenegro (2011) 6.1 5.8 6.1
The following Figure shows a comparative overview of the values of low user baskets in mobile telephony and the countries of the region and the EU27.
4 Peak time – time with more calls5 Off peak time – time with fewer calls
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02468
1012141618 2010. 2011.
EU-27: €9.07
It should be noted that the prices of the OECD basket in Montenegro are under the average price of the baskets in the Region (7.06 €), and well under the average in the EU Member States (9.07 €). In the course of the year, the basket remained on almost the same level with all three operators in Montenegro (a slight fall with Crnogorski Telekom and rise with Telenor and M:Tel was recorded).
The value of medium user basket in mobile telephony over a month is given in the following Table.
CountryUser basket (prices are in €, with VAT included)MediumCrnogorski Telekom Telenor M:Tel
Montenegro (2010) 18.0 17.7 15.4
Montenegro (2011) 13.5 12.9 11.2
The following Figure shows a comparative overview of the values of medium user baskets in mobile telephony with the countries of the Region and the EU27.
0
5
10
15
20
25
30
35
40
45
50 2010. 2011.
EU-27: €15.31
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The Figure shows that the prices of the OECD basket in Montenegro are under the average price of the baskets in the Region (20.43 €), and also under the average in the EU Member States (15.31 €). When this basket is concerned, it is obvious that its value fell over the year with all three operators in Montenegro.
The value of high user basket in mobile telephony over a month is given in the following Table.
CountryUserbasket(pricesarein€,withVATincluded)HighCrnogorski Telekom Telenor M:Tel
Montenegro (2010) 29.7 31.6 31.9
Montenegro (2011) 25.4 26.0 23.1
The following Figure shows a comparative overview of the values of high user baskets in mobile telephony with the countries of the Region and the EU27.
0
20
40
60
80
100
1202010. 2011.
EU-27: €24.22
The Figure shows the prices of the OECD basket in Montenegro are under the average price of the baskets in the Region (32.78 €), and nearly as high as the average value of the basket in the EU Member States (24.22 €).
Over the last year, the value of this basket recorded a fall with all three operators in Montenegro. The falling trend in the value of the basket was also recorded in the EU-27.
1.1.3. Broadband Internet access During 2011, a rising trend in the number of broadband Internet users continued. At the end of 2011, the total number of broadband connections in Montenegro amounted to 82.506, irrespective of the technology used for the access (ADSL, WiMAX, WiFi, CDS).
The use of ADSL technology was still a dominant way for broadband access (64,712 connections at the end of 2011), and during 2011 it was only provided by Crnogorski Telekom in Montenegro.
The number of WiMax connections at the end of December 2011 amounted to 7,296.
The number of cable connections has been steadily rising since 2011.
Prices of broadband access in Montenegro
During 2011, the prices of broadband access charged by Crnogorski Telekom remained the same. The only significant change took place in April 2010 when Crnogorski Telekom increased the speeds of some packages, so that double data communication was offered at the same price.
It is necessary to emphasize so-called Fl@T packages with unlimited data traffic from the offer of Crnogorski Telekom relating
28 www.ekip.me
to ADSL packages for residential customers, which were provided with the minimum duration of the subscriber contract of 18months,atthepricesindicatedinthetable(withVATincluded):
Package name Rate Data Traffic Price
Basic do 1 Mbps / 128 kbps 1 GB 13.99 €
Fl@T 2 do 2 Mbps / 256 kbps Flat 19.99 €
Fl@T 5 do 5 Mbps / 512 kbps Flat 24.99 €
Fl@T 7 do 7 Mbps / 768 kbps Flat 44.99 €
In its offer for non-residential customers, Crnogorski Telekom has only ADSL packages with unlimited data traffic, provided withaminimumdurationofthesubscribercontractof12months,atthefollowingprices(withVATincluded):
Package name Rate Data Traffic PriceFl@T B4 do 4 Mbps / 512 kbps Flat 30.00 €Fl@T B6 do 6 Mbps / 1 Mbps Flat 50.00 €Fl@T B8 do 8 Mbps / 1 Mbps Flat 65.00 €Fl@T B10 do 10 Mbps / 1 Mbps Flat 80.00 €
The establishment of a subscriber relationship with Crnogorski Telekom includes the price of the selected modem (regardless of the modem type), as well as the cost of ADSL modem installation in the amount of 49.50 €.
Modem prices included if the offer of Crnogorski Telekom are irrespective of whether the modems are offered to residential ornon-residentialcustomers,andtheyarepresentedinthefollowingtable(withVATincluded):
Modem type PriceADSL modem Type 1 (Bridge mode connection, e.g. D-link 360R) 17.50 €ADSL modem Type 2 (4-port switch, e.g. D-link DSL-2543B) 37.50 €ADSL modem Type 3 (4-port switch + WiFi, e.g. D-link DSL-2641B) 52.50 €ADSL modem Type 4 (home gateway) 45.00 €
The offer of various packages with many tariff profiles may often confuse customers, as they find it very difficult to decide which offer is the best. However, flat-rate tariffs of Crnogorski Telekom (in this case), eliminate any confusion, and customers are even ready to pay more for them than for the packages with limited data traffic. Bearing in mind that the volume of transmitted data is subject to additional charge once the limit is reached, customers mainly opt for one of flat-rate packages.
Crnogorski Telekom also offers to its customers (residential and non-residential) so-called triple-play packages, i.e. packages offering together the services of television, Internet and fixed telephone at affordable prices. All these packages are on postpaid basis, and a special benefit for customers is that at the end of the billing period, a common bill is delivered to them with separate data on consumption per each of these services.
ThetablebelowpresentsnewExtraTriopackagesofCrnogorskiTelekom,whichincludeExtraTV,ADSLandfixedtelephony.
Package TV Internet Telephone Price
Extra Trio Mini 25 channels from the Region
ADSL basic (1Mbps, data traffic 1GB)
“Comfort evening” (unlimited calls on T-Com network from 19-07, 100 min., free of charge to T-Mobile) 19.95€
Extra Trio Flat 2 57 channels A D S L F l @ t 2 (2Mbps,data traffic unlimited)
“Comfort” package (unlimited calls on T-Com network) 37.95€
Extra Trio Flat 5 57 channels ADSL Fl@t 5 (5Mbps, data traffic unlimited
“Comfort” package (unlimited calls on T-Com network, 100 min. free of charge to fixed network in Serbia) 44.95€
Prices of broadband access in M:Tel’s offer
In Montenegrin market, M:Tel also offers the services of broadband access with unlimited data traffic, at the following prices:
Connection speed 512kbps/128kbps 1024kbps/256kbps 2048kbps/256kbpsMonthly subscription fee for 12 months 22 € 35 € 43 €Monthly subscription fee for 24 months 20 € 33 € 41 €
TheamountsinthetableabovearewithVATincluded.During2010,aone-offconnectionchargeintheamountof200.00€was charged, with the possibility of payment in 10 monthly installments.
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Prices of broadband Internet access (ADSL) in comparison with prices in the Region
Monthly subscription fee for 1 Mbps in Montenegro was offered at the price which was under the average in the Region (14.43 €), and the comparison with the EU27 was not possible as their operators did not provide Internet service at 1Mbps.
1) In Montenegro, the tariff package of Crnogorski Telekom with 1 Mb/s was offered at the price of 13.99 €.2) In Serbia, the package of 1 Mbps was offered by alternative operators at the price of 13.9 €.3) In Macedonia, the package of 1 Mbps was offered at the price of 22.17 €.4) In Bosnia and Herzegovina, the package of 1Mbps was offered at the price of 10.17 €, 11.37 € and 14.96 €,
depending on the operator.
Monthly subscription fee for 2 Mbps in Montenegro was within the respective average fee in the Region (17.40 €), and comparison with the EU27 was not possible as their operators did not provide Internet service of 2Mbps.
1) In Montenegro, the flat tariff package of Crnogorski Telekom of 2 Mbps was offered at the price of 20.00 €.2) In Serbia, Telekom Serbia offered the package of 2 Mbps at the price of 20.16 €, while alternative operators
charged 21.03 €.3) In Macedonia, there was no offer of 2 Mbps package.4) In Bosnia and Herzegovina, the package of 2 Mbps was offered at the prices of 14.96 € and 20.94 €, depending
on operators.5) In Croatia, the package of 2 Mbps cost 10.92 €.
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2. DEGREE OF UNIVERSAL SERVICE IMPLEMENTATION IN ELECTRONIC CO MMUNICATION SECTOR WITH ASSESSMENT OF USER SATISFACTION WITH THIS SERVICE
2.1. European Union Regulatory Framework
The Law on Electronic Communications in Article 52, paragraph 1 defines Universal Service as a set of telecommunications services of specified quality which must be available to all end users at an affordable price, irrespective of their geographic location in the territory of Montenegro.
European legislation on Universal Service is defined in the following documents:
• DIRECTIVE 2002/22/EC of EuropeanParliament and Council of 7 March 2002, which refers to basic services and user rights in relation with electronic communication networks and services (Universal Service Directive);
• DIRECTIVE2002/58/ECoftheEuropeanParliament and Council of 12 June 2002 referring to private data processing and protection of privacy in electronic communications sector (Directive on privacy in electronic communications);
• DIRECTIVE2009/136/ECoftheEuropeanParliament and Council of 25 November 2009, amending the Directive 2002/22/EC, which refers to basic services and user rights in relation with electronic communication networks and services,
• DIRECTIVE2002/58/EC in relationwithpersonal data processing and the protection of privacy in electronic communications;
• DECREE(EC)No2006/2004oftheEuropeanParliament and Council of 27 October 2004 on cooperation among national regulatory authorities in the implementation of the user protection law (Rulebook on user protection, cooperation of NRAs).
2.2. Activities on implementation of the Universal Service
In the process that preceded the selection of operators to perform individual services from the scope of Universal Service seven regulations were issued governing this area. The regulations were issued by the Government of Montenegro (Decree on minimum set of services included in the Universal Services6), the authority of public administration responsible for telecommunications (Rulebook on the quality of services from the Universal Service7 and Rulebook on determination of categories of benefits for the use of the Universal Services8) and the Agency for Electronic Communications and Postal Services (Rulebook on methodology for calculation of net costs of the provision, and the amount and the mode of payment for financing of the Universal Service9, Rulebook on assessment of justification of users’ request for connection to the public telephone network and the needs of end-users related to geographic coverage by public payphones10, Rulebook on conducting a public tender and setting criteria for designation of the USO (Universal Servicer Operator)11 and Rulebook on the Universal Service tariffs and packages for users with low income and for disabled users12). After issuing the rulebook for the Universal Service, the Agency invited a public tender for the selection of operators for providing individual services from the scope of Universal Service. The public tender was invited on 25. 10. 2010 and lasted till 28. 12. 2010. Under the public tender of 25.01.2011, the Agency issued a decision on the selection of operators for providing individual services from the scope of the Universal Service for the period of 5 years in the whole territory of Montenegro.
Telenor d.o.o. Podgorica was selected to provide the service of fulfilling each reasonable user request for the connection to the public telephone network, at a fixed location, which included setting up telephone calls, transmission of communications by facsimile and data communication at rates suitable for functional Internet access, as well as to grant specific benefits to end users – disabled users and users with low income. Telenor shall provide under request of any citizen of Montenegro a connection to telecommunications network, regardless of geographic position of the building in which the citizen lives. This connection will enable making telephone calls, transmission of communication by facsimile and Internet access at a guaranteed rate of 144 kbit/s.
6 „Official Gazette of Montenegro“ No 60/107 „Official Gazette of Montenegro“ No 57/108 „ Official Gazette of Montenegro “ No 57/109 „ Official Gazette of Montenegro “ No 35/1010 „ Official Gazette of Montenegro “ No 35/1011 „ Official Gazette of Montenegro“ No 35/1012 „ Official Gazette of Montenegro“ No 14/11
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Telecommunications) against the decisions of the Agency on the selection of operators for providing individual services from the scope of the US:
• BusinessorganizationM:Teld.o.o.Podgorica,concerning the selection of both operators: Telenor d.o.o. and MCA d.o.o,
• Telenord.o.o.asintheiropinion,thisAgency’sdecision imposed on them obligations which were not in accordance with the accepted bid. In specific, the decision imposes an obligation to include the terminal equipment in the connection charge, and that for calculation of the volume of generated voice traffic, the calculation unit of the time interval of 1 second is to be used, and for the calculation of the volume of generated data traffic, except for SMS and MMS traffic, unit measures of transmitted volume of 1 kB.
The Ministry for Information Society and Telecommunications adopted on 09. 05. 2011 conclusions upon appeals, amendments to appeals and appeals withdrawn by M:Tel d.o.o. concerning the selection of the USO under the Agency decisions, making these decisions effective. The Ministry issued a decision on Telenor’s appeal against the decision of the Agency, and rejected Telenor’s appeal, confirming the Agency decision.
After the Agency’s decisions on the selection of operators for providing individual services from the scope of the Universal Service were made, several meetings were held in which the activities of the selected operators were defined, as well as the obligations that operators providing the services to end-users had to the former operators, and the deadlines for their implementation. In order to monitor the implementation of the US related to the services belonging to the scope of US services for which Telenor d.o.o. had been selected, a coordinating body was established, composed of the Agency and Telenor representatives.
The Agency also delivered letters to the Ministry of Information Society and Telecommunications, Ministry of Labour and Social Care, Ministry for Agriculture and Rural Development, and Ministry for Sustainable Development and Tourism, as well as to mayors of all municipalities in Montenegro. By these letters the Agency invited ministries and mayors of all municipalities to coordinate their activities in the process of the US implementation in Montenegro. In order to promote the services from the US, the Agency’s representatives, in cooperation with the representatives of Telenor d.o.o. gave presentations in the municipalities of Cetinje, Danilovgrad, Pljevlja, Mojkovac, Kolašin, Berane, Žabljak, Šavnik and Rožaje. Also, meetings were held with the representatives of several local communities.
Acting in accordance with Directive 2002/22/EC on Universal Service, the Agency had consultations with stakeholders (operators which provided services to end-users of mobile and fixed networks) concerning the need to select the USO for the provision of service of public payphones. During the consultation process it was found out that the existing equipment and installed capacities or similar services satisfied
Telenor offered the services from the scope of the Universal Service at the following conditions:
• Aone-offconnectioncharge–55.55€;• Monthlysubscriptionfee–6.79€;• Priceoflocalandlong-distancecallsinthe
period from 08h till 20h – 0.06 €/min, and in the period from 20h to 08h next day – 0.04 €/min;
• thepriceofcallstomobilenetworksintheperiod from 08h to 20h – 0.19 €/min, and in the period from 20h to 08h next day – 0.11 €/min; • thepriceofinternationalcalls–0.47€/min;• thepriceofInternettrafficof1MB–0.017€.
ThepricesaregivenwithoutVAT.Thebasicterminaluserequipment (modem) is included in the connection charge.
For disabled people and people with low income, Telenor provided universal services at the prices stated below:
• Aone-offconnectionchargefordisabledpeople and people with low income - 25.00 €(VATincluded;itwaspaidinatleastthreemonthly installments );
• Monthlysubscriptionfeefordisabledpeopleandpeoplewithlowincome–4.00€(VATincluded);
• ForallkindsofcallsandgeneratedInternettraffic thepriceswereby20% lowercompared to ones charged to other Universal Service users.
Telenor started the provision of the universal services during July 2011.
MCA Maribor d.o.o. the Republic of Slovenia was designated for the provision of the US, i.e. the service of the Universal Telephone Directory and Universal Enquiry Service for giving information to users about subscribers and for granting specific benefits for end users – disabled users and users with low income. For the purpose of an effective performance of the assignment in Montenegro, MCA Maribor established a business organization Teleinfo.me d.o.o. Podgorica. End-users of all networks in Montenegro (mobile and fixed networks, and public payphones) can, by dialing number 1180 for Universal Enquiry Service envisaged in the Numbering Plan, get information about telephone numbers of users of all networks. Teleinfo.me is obliged to make a comprehensive telephone directory which contains the numbers of all end-users who did not request that their information were not to be made public. The directory that the USO shall publish is to be both in printed and electronic formats. The price of a printed copy of the telephone directory will be 2.25 €, andofelectronicCD/DVDversion6.00€.Thedirectoryfordisabled users will be free of charge, and the price of calls to Universal Enquiry Service (their termination rate from the acceptedbid)is0.15€percall,withoutVAT.
The companies listed below have submitted appeals to the authority of public administration responsible for telecommunications (Ministry for Information Society and
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the needs in terms of distribution and availability, so the conclusion reached was that there was no need for the selection of the USO for the provision of public payphones service. After the process of public consultations had been completed, the Agency submitted to the Ministry of Information Society and Telecommunications an initiative for the correction of the scope of the services included in the US in the segment concerning public payphones.
The operator of the Universal Telephone Directory and Universal Telephone Enquiry Service, MCA Maribor d.o.o. could not reach in the initial phase of the service implementation an agreement with other operators about the price of calls to number 1180, so it addressed to the Agency to set the retail price of calls to the Universal Enquiry Service. The Agency made a decision and set the price of calls to number 1180, which was envisaged for this purpose by the Numbering Plan. This price was the same for end-users of each network (fixed, mobile and calls from public payphones) in Montenegro, and amounted to 25.81 €cent per call. The operator of the Universal Enquiry Service has a common database which contains information about telephone numbers of users received from operators providing the services of mobile and fixed networks to end-users. This operator started its work on 05. 12. 2011. Calls to number 1180 can be made from networks of all operators of public telephone services and from public payphones. In the period from the start of operation till the end of December 2011, there were 25,724 calls to number 1180 which originated in networks of operators providing services to end-users.
2.3. Assessment of users’ satisfaction with this service
The provision of the universal services is in the initial phase, and the number of users, volume of traffic and duration of the period of service provision are not sufficient to allow the application of prescribed measures of the quality of service, which would provide reliable results.
The USO Teleinfo.me submitted data about the US parameters for the quality of calls to the Universal Enquiry Service:
• The percentage of calls answered in the intervaluptodo20secondsis85.63%and
• Average time of US Enquiry Service answering is 14.7seconds,
• which was in accordance with the defined parameters.
At the request of the Agency, the operators from the Universal Enquiry Service (Call center 1180) made a survey of users’ satisfaction with the provided service. The survey included the sample of 139 users selected at random. During the survey, the operators put this question: ”How would you evaluate the quality of the service of call center 1180?” There were three answers offered to respondents in the survey: 1) satisfactory, 2) unsatisfactory, and 3) I am not sure, by which
they were able to describe their opinion about the quality of the service. They were also allowed to add their comment, suggestion or objection. The results were as follows:
• 133 respondents answered that the Universal Enquiry Service 1180 was satisfactory, which in accordance with the sample accounted for95.68%satisfiedusers.
• 5respondentsevaluatedthequalityoftheservice as unsatisfactory, which expressed in percentagesaccountedfor3.59%unsatisfiedusers.
• 1 respondent answered that he was not sure about the quality of the Universal Enquiry Service1180,whichaccountedfor0.71%ofusers who had not formed their opinion about the quality of the call center yet.
The results of the survey led to the conclusion that a big percentage of users are satisfied with the service provided by the Universal Enquiry Service.
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3. ASSIGNED LIMITED RESOURCES AND ASSESSMENT OF THEIR RATIONAL USE
3.1. Assigned radio-frequencies and assessment of their rational use
Radio frequency spectrum is limited natural resource which represents the property of general interest over which Montenegro has ownership and exercises its authorities. Competent state authorities, in compliance with international regulations which are applied in Montenegro, provide efficient and undisturbed use of radio frequency spectrum and ensure the rights of Montenegro in orbital positions. The Agency shall manage, supervise and control the use of radio frequency spectrum in compliance with the Radio Frequency Allocation Plan and radio frequency assignment plans, and the Law on Electronic Communications.
The Radio Frequency Spectrum Allocation Plan (“Official Gazette of Montenegro”, No 42/10), which was adopted by the Government of Montenegro, shall define radio frequency bands for individual radio communication services, and basic conditions for the use of radio frequency spectrum.
By the Radio Frequency Spectrum Allocation Plan, radio frequency bands allocated to military communication networks and systems have been harmonized at European level, in line with the NJFA – NATO Joint Civil/Military Frequency Agreement.
In addition to the RF Allocation Plan, the adoption of corresponding RF allotment plans is very important, as they contain more detail about the conditions and manner of utilization of individual radio frequencies according to specified radio-communication services, within specified radio frequency bands. During 2011, the Agency adopted the following allotment plans and made necessary amendments of the existing plans, in accordance with its competences stipulated by the Law and after the completed process of public consultations:
• RadioFrequencyAllotmentPlanfromthebands of 410 – 430 MHz for PMR/PAMR systems („Official Gazette of Montenegro“, No 7/11). This plan defines the allotment of blocks for PMR and PAMR systems, as well as the arrangement of radio frequency channels, and more detailed conditions for the use of bands for CDMA PAMR systems. • DecisionamendingBroadcastingFrequencyAllotment Plan in Montenegro (“Official Gazette of Montenegro“, No 23/11). In order to meet needs of national public broadcasting service, and to make sure that the rights of other RF customers were not jeopardized, the Agency for Electronic Communications and Postal Services, upon prior approval of the regulatory authority for program contents, issued a Decision
amending Broadcasting Frequency Allotment Plan in Montenegro.• RadioFrequencyAssignmentPlanfordigitalterrestrial broadcasting („Official Gazette of Montenegro“, No 55/11). The basic requirements for the use and assignment of radio frequencies allocated to digital terrestrial broadcasting systems are stipulated by an international agreement and RF Allotment plan – Geneva 2006 (GE06), which was adopted as the Final Act of the Regional Radio-communication Conference for planning digital terrestrial systems of broadcasting service in frequency bands of 174 – 230 MHz and 470 – 862 MHz Regions 1 and 3. This Allotment Plan defines: technical conditions and the way of using radio frequencies allocated by Montenegrin RFS Allocation for the use by digital terrestrial broadcasting systems and geographic areas (allotment zones) to be covered by digital broadcasting signal.
The mentioned RF allotment plans were prepared in compliance with relevant documents of the Electronic Communication Committee (ECC), European Conference of Postal and Telecommunications Administrations (CEPT) and International Telecommunication Union (ITU).
Use of radio frequencies
Residential and non-residential users in Montenegro can only use radio frequencies on the basis decisions to approve the use of radio frequencies issued by the Agency, in compliance with and under the procedure stipulated by the provisions of the Law on Electronic Communications. It should be noted that specific radio frequencies can be used without decisions to approve their use, in compliance with the Radio Frequency Spectrum Allocation Plan and international enactments accepted by Montenegro, under the provisions defined in the Rulebook on radio frequencies and conditions under which the frequencies can be used without authorization.
During 2011, the Agency issued the total of 316 decisions to approve the use of radio frequencies and 141 decisions on technical conditions for radio base stations in fixed and mobile services for operators which had gained the exclusive right to use radio frequencies in the whole territory of Montenegro. In the course of 2011, the Council of the Agency adopted 13 decisions on the withdrawal of authorization for the use of radio frequencies and rejected 8 requests as ungrounded. The following chart illustrates the number of issued authorizations per radio-communication services.
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Radio service No of issued authorizations N o o f w i t h d r a w n authorizations No of rejected requests
FIXED (radio-relay links) 133 7 4
FIXED (FWA13 networks) 4 - -
FIXED (RBS14) - - -
MOBILE (functional systems) 4 - -
MOBILE (GSM/DCS1800/UMTS/LTE networks) 141 - -
BROADCASTING 58 5 -
AERONAUTICAL 5 - -
MARITIME 66 1 -
RADIO-AMATEUR 43 - 4
SATELLITE
(SNG15andVSAT16 terminal stanice)3 - -
TOTAL: 457 13 8
According to Article 77 of the Law, in 3 cases the Agency issued temporary authorizations for the use of radio frequencies allocated for testing, measuring and giving attests for radio-communication equipment, for the limited area of coverage, and for the period of 90 days.
3.1.1. Radio frequencies assigned through the process of public tenderArticle 68 of the Law on Electronic Communications prescribes that if the Agency considers that interest in a particular band of the radio frequency spectrum could exceed the availability and thereby hinder the efficient use thereof, it shall acquire the opinions of interested parties concerning the conditions of use of frequencies, market value of frequencies and on limiting number of authorizations. If the Agency finds on the basis of the opinions of interested parties that allocated radio frequencies are not sufficient for all interested parties, it shall carry out the procedure of a public tender for the assignment of allocated radio frequencies.
Considering that there was an increased interest in the use of radio frequencies, the Agency carried out two surveys during 2011 to examine the interest in the use of radio frequencies. In one of the cases, the interest proved to exceed the available radio frequency resources, so the procedure for a public tender was conducted.
In March 2011, at the request of the Association for Telecommunications of M:Tel d.o.o. Podgorica for the authorization of radio frequency bands of 3600-3800 MHz for the implementation of network based on BWA - national level, the Agency announced a public invitation for expressing interest in the use of radio frequencies from the mentioned bands. After the public invitation, M:Tel was the only undertaking that had expressed the interest, so that according to Article 66, paragraph 2 and Article 68 paragraph 4 of the Law on Electronic Communications, the Council of the Agency thought that in this case there was no need for calling a public tender, and assigned the radio frequency block 2 x 25 MHz wide in the bands of 3600-3800 MHz to M:Tel directly, at their request.
In June 2011, at the request of business organization Farah Telecom d.o.o. Podgorica for the authorization for radio frequencies from the bands of 410-430 MHz, 880-915/925-960 MHz, 1710-1785/1805-1880 MHz, 1920-1980/2110-2170 MHz, 3600-3800 MHz and 11,7-12,5 GHz, the Agency conducted the procedure for the examination of interest in the use of radio frequencies from the stated bands.
After the public invitation, business organization BBMi d.o.o. Podgorica was the only one to express interest in the use of radio frequency bands of 410-430 MHz for the implementation of CDMA PAMR network on national level. Given the available RF resources within the mentioned bands, the Agency Council thought that it was unnecessary to carry out the process of public tender in this case and assigned the radio frequency block 2 x 2.5 MHz wide in 410-430 MHz bands to BBMi directly, at their request.
For the use of radio frequencies in the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz and 1920-1980/2110-2170 MHz for the implementation of a mobile electronic communication network in compliance with GSM/DCS1800, or IMT-2000/
13 FWA (Fixed Wireless Access)14 RBS (Radio Base Station)15 SNG (Satellite News Gathering)16 VSAT (Very Small Aperture Terminal)
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UMTS standard on national level, the interest was expressed by Farah Telecom, whose ambition was to become the fourth mobile operator in Montenegro. In addition to Farah Telecom, the interest for the use of radio frequencies in mentioned bands was expressed by all three current mobile operators: Crnogorski Telekom, Telenor and M:Tel for the purpose of expanding the existing networks and implementation of new technologies. As the expressed interest exceeded the available RF resources, according to Article 68 paragraph 4 of the Law on Electronic Communications, the Agency Council took a decision in November 2011 on calling a public tender for awarding authorizations for the use of radio frequencies in the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz and 1920-1980/2110-2170 MHz. Pursuant to the Law, the Ministry for Information Society and Telecommunications set the lowest fee for effective use of radio frequencies in the amount of 1,315,000.00 EUR which could be offered in the tender procedure. During the tender procedure, the only bid was submitted by Telenor. Telenor offered the amount of 1,649.500.00 EUR as a fee for the effective use of the radio frequencies, which would be used for increasing the capacities of the existing GSM/DCS1800, or IMT-2000/UMTS network, as well as for the implementation of new technologies, LTE in the first place. According to the tender terms, Telenor, as the first-ranked bidder, was obliged to offer to other holders of authorizations for the use of frequencies in the mentioned bands the transfer of right to use 1/3 of RF resources which were the subject of the tender at the price of 1/3 of the fee offered for the effective use of radio frequencies. Crnogorski Telekom accepted Telenor’s offer, whereas M:Tel advised the Agency that it was not interested in the transfer of right to use those radio frequencies. In January 2012, the Agency issued to Telenor and Crnogorski Telekom necessary authorizations for the use of radio frequencies in the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz and 1920-1980/2110-2170 MHz.
For the use of radio frequencies in the bands of 3600-3800 MHz for the implementation of BWA network – national level, business organization Broadcasting Center d.o.o. Podgorica was the only one to express the interest. With regard to available radio frequency resources in the mentioned band, the Council of the Agency found that it was not necessary to carry out the procedure of a public tender in this case, and that the radio frequency block 2 x 25 MHz wide in the bands of 3600-3800 MHz could be assigned to the Broadcasting Center directly, upon their request.
There was no interest expressed in the public call for the use of radio frequency bands of 11.7-12.5 GHz.
3.1.2. Analysis of occupancy of the most significant radio frequency bands
Fixed and mobile services
In Montenegro, radio frequency resources were assigned on exclusive basis in its whole territory from the following RF bands:
1. 410 - 430 MHz for implementation of CDMA PAMR electronic communications network;
2. 880 - 960 MHz for implementation of E-GSM/GSM public mobile electronic communications network;
3. 1710 – 1880 MHz for implementation of DCS1800 public mobile electronic communications network;
4. 1900 – 2170 MHz for implementation of IMT-2000/UMTS public mobile electronic communications network;
5. 3410 - 3600 MHz for implementation of BWA systems;
6. 3600 - 3800 MHz for implementation of BWA systems;
7. 11.7 – 12.5 GHz for distribution and emission of signals via wireless distribution systems up to end-users.
Radio frequencies from the band of 410-430 MHz were assigned to business organization BBMi d.o.o. Podgorica without a tender procedure, as it was the only undertaking interested in the use of this radio frequency band for the implementation of CDMA PAMR electronic communications network for providing electronic communication services on national level. The authorization was issued on 30. 12. 2011 for the validity period of 5 (five) years, and it prescribed that BBMi had to start using the approved frequencies in the period of one year from the date when this authorization came into force, i.e. no later than the end of 2012.
As stated before, at the end of 2011 the Agency carried out the tender for the award of authorizations for the use of radio frequencies in the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz and 1920-1980/2110-2170 MHz for implementation of the electronic communications network for providing electronic communication services in compliance with GSM/DCS1800 and IMT-2000/UMTS standards on national level.
In relation with the band of 3410-3600 MHz, authorization holders are business organization M:Tel d.o.o., BBMi d.o.o., WiMAX Montenegro d.o.o. and Montenegro Connect d.o.o., which all use approved radio frequencies, but M:Tel is the only one which provides services on commercial basis. During 2012, the rights of M:Tel, BBMi and WiMAX Montenegro to use radio frequencies will expire, and then the Agency will be able to consider potential requests for their extension, i.e. justification of such requests.
It should be noted that the Agency, following international trends in the field of radio communications, and the entry into force of the new allocation plan in 2010, adopted allotment plans that allowed the use of radio-frequency bands of 3410-3600 MHz and 3600-3800 MHz in a way that in addition to the use of duplex transmission based on the division of downlink and uplink channels in frequency domain (FDD), the time division domain (TDD) was also allowed and the use of terminal stations, except in FWA, NWA and MWA modes. Therefore, we may say that the creation of adequate regulatory framework created preconditions for more rational use of radio frequencies.
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During 2011, the Agency was addressed at various times by undertakings like M:Tel and PC Broadcasting Center, which expressed interest in the possibility to use the remaining radio frequency blocks in the bands of 3600 – 3800 MHz. Until that time, only one of four available paired blocks had been assigned to business organization Telenor d.o.o. The Allocation Plan for this band also allows the division of downlink and uplink channels in time domain and the use of terminal stations in nomadic and mobile modes. As they were the only applicants interested in the use of RF resources at the time, the Agency, without a tender procedure, assigned to M:Tel d.o.o., which had submitted all necessary documents in compliance with the Law, one paired RF bloc, with channel space of 5 MHz, i.e.. 2 x 25 MHz, while the Broadcasting Center had to submit technical documentation so that the Agency could issue the decision on the authorization for the use of RF resources. Once this process has been completed, there will be only one paired block available.
In the bands of 11.7 – 12.5 GHz, which has been assigned for the distribution and emission of signals to end-users over wireless distribution systems (MMDS – Multichannel Multipoint Distribution Service), only part of the band of 11.9 – 12.3 GHz has been assignedtoBroadbandMontenegrod.o.o.,outofwhichithasbeenusing320MHz,whichisenoughforthenumberofTVchannels available in their offer at present. The remaining 80 MHz will be used during the announced extension of the list of channels compared to the current BBM offer.
Business organizations Telenor d.o.o. and M:Tel connect their base stations to managing-switching centers situated in Podgorica by the systems of two-way fixed connections implemented in the form of rings, in the following bands:
• 6GHz-L (5925-6425MHzinaccordancewithRecommendationITU-RF.383-8),• 6GHz-U (6425-7125MHzinaccordancewithRecommendationITU-RF.384-10),• 8GHz (7725-8275MHzinaccordancewithRecommendationITU-RF.386-8),• 11GHz (10.7–11.7GHzinaccordancewithRecommendationITU-RF.387-10).
PC Broadcasting Center d.o.o. implemented its transmission system by combined use of two bands:• 6GHz-U (6425-7125MHzinaccordancewithRecommendationITU-RF.384-10),and• 7GHz-U (7425–7725MHzinaccordancewithRecommendationITU-RF.385-9).
The common route of those transmission systems is the most important radio corridor in Montenegro, Lovćen – Bjelasica (86.5km as the crow flies).
Crnogorski Telekom has based its transmission system mainly on the use of fibers:
The connection of base radio stations up to the most suitable connection point of the mentioned transmission systems is implemented by two-way fixed connections in the following bands:
• 13GHz (12.75-13.25GHzinaccordancewithRecommendationITU-RF.497-7),• 15GHz (14.5–15.35GHzinaccordancewithRecommendationITU-RF.636-3),• 18GHz (17.7–19.7GHzinaccordancewithRecommendationITU-RF.595-9),• 23GHz (21.2–23.6GHzinaccordancewithRecommendationITU-RF.637-3),• 26GHz (24.5–26.5GHzinaccordancewithRecommendationITU-RF.748-4).
The following Figure illustrates the shares of assigned radio frequency channels by radio frequency bands, assigned mainly to operators of public electronic communications, who, according to their needs, have implemented fixed connections of small, medium and large capacities.
14%
7%
2%2%
11%
2%2%
14%8%
7%
26%
5% 5925-6425 MHz
6425-7125 MHz
7125-7425 MHz
7425-7725 MHz
7725-8275 MHz
8275-8500 MHz
10,700-11,700 GHz
12,750-13,250 GHz
14,500-15,350 GHz
17,700-19,700 GHz
21,200-23,600 GHz
24,500-26,500 GHz
Overview of shares of assigned radio frequency channels per radio frequency bands (the data as of 31.12.2011)
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The Figure below presents a comparative overview of assigned radio frequency channels per bands, according to radio frequency users, which are identified by the Agency as major consumers of RF spectrum.
0
50
100
150
200
250
300
350
400
TELENOR
35%
5%7%
20%
2%
31%
1%
21,200-23,600 GHz
17,700-19,700 GHz
14,500-15,350 GHz
12,750-13,250 GHz
10,700-11,700 GHz
7425-7725 MHz
7125-7425 MHz
5925-6425 MHz
0
20
40
60
80
100
120
140
160
180
200
CRNOGORSKI TELEKOM
4%7%3%9%
28%
4%
26%
18%
1%
1%
24,500-26,500 GHz
21,200-23,600 GHz
17,700-19,700 GHz
14,500-15,350 GHz
12,750-13,250 GHz
8275-8500 MHz
7725-8275 MHz
7425-7725 MHz
7125-7425 MHz
6425-7125 MHz
0
50
100
150
200
250
300
MTEL
1%4%
31%
2%20%
10%
28%
6%
24,500-26,500 GHz
21,200-23,600 GHz
17,700-19,700 GHz
12,750-13,250 GHz
10,700-11,700 GHz
7725-8275 MHz
6425-7125 MHz
5925-6425 MHz
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0
10
20
30
40
50
60
70
80
90
RDC
2%2%
55%
15%
27%
17,7-19,7 GHz
7425-7725 MHz
6425-7125 MHz
5925-6425 MHz3800-4200 MHz
Comparative overview of assigned radio frequency channels per bands, depending on RF users. The ordinate represents the total number of assigned radio frequency channels per user
What is observed with these customers can be noticed here compared to 2010 is a growing tendency of using radio frequency resources in higher bands compared to 2010, especially in the bands from 21,200 to 23,600 GHz (23 GHz), because they have sufficiently developed its backbone transmission systems now, while the scope for further development of transmission network connection opens with the implementation of the connection to the transmission system, which generally involves shorter distances. Therefore, for successful implementation, the most appropriate use, particularly in terms of rational use of radio-frequency spectrum, is the use from so-called higher bands.
Professional (Private) mobile radio (PMR) is a part of land mobile service based on the use of simplex, semi-duplex and, if possible, duplex operation at terminal level, for the purpose of providing communication to a closed user group. PMR is usually used by business organizations for carrying out their operations, i.e. their functional systems of radio links. In Montenegro, PMRsystemsoperateinVHF(146-174MHz)andUHF(440-470MHz)radiofrequencybands,whichareusedinpercentagesof71%and29%respectively.TheFigurebelowshowstheratiooftheusesofthesetwofrequencybands.
71%
29%VHF
UHF
Ratio use of VHF and UHF radio frequency bands in which PMR systems operate in Montenegro
Both mentioned bands contain enough resources available for potential future users, and their availability will be growing compared to the current one and the manner of their usage will be improved by implementation of the ECC Recommendation T/R 25-08, which is under way.
VSAT/SNG
In2011twoauthorizationswereissuedfortheuseofradiofrequenciesforVSATterminalstationsintheterritoryofMontenegrofor the period of 5 years. Also, in 2011 6 authorizations were issued for the use of radio frequencies needed for the operation of SNG stations, whose validity period is three months and involves the use of radio frequencies for broadcasting extraordinary events, like football matches of Montenegrin national team.
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Broadcasting service
Bearing in mind that the Law amending the Law on Electronic Communications (“Official Gazette of Montenegro”, 49/10) prescribes that broadcasting services do not pay annual regulatory fees for the use of radio frequencies, as they pay those fees under a special law regulating program content, the Agency in early 2011 brought the decisions on authorizations for the use of radio frequencies issued in 2009 and 2010 in compliance with stated amendments of the regulatory framework. With regard to this, the Agency issued to electronic media 53 new decisions on authorizations to use radio frequencies for broadcasting service, terrestrial systems for emitting radio signals in the 87.5 – 108 MHz band and television signals in the 470 – 862 MHz band.
During 2011 the Agency also issued to electronic media decisions on the authorization for the use of radio frequencies, according to filed requests for obtaining authorizations, pursuant to the Law on Electronic Communications, RF Allocation Plan of Montenegro, Broadcasting Frequencies Assignment plan of Montenegro, Articles 2-4 and 19 of the Law on public broadcasting services in Montenegro and Article 196 of the Law on general administrative procedure.
For that purpose, the Agency issued additional authorizations for the use of radio frequencies to business organizations of “Eurogum” d.o.o. Cetinje, “Radio Mreža M” D.O.O. Nikšić, “Neboelectronic” d.o.o. Herceg Novi and non-governmental organization “Society for equality and tolerance-AI” Podgorica.
The Agency also issued three decisions on temporary authorization for the use of radio frequencies according to the request of the National Council for Roma people and Egyptians, Media center “Ratkol” d.o.o. Kolašin and business organization “Neboelectronic” d.o.o. Herceg Novi.
Acting ex officio and upon the request of business organization „The Broadcasting Center“ d.o.o. for broadcasting signals for national public broadcasting services of Radio and Television of Montenegro, the Agency issued to the public service an authorization for the use of radio frequencies for broadcasting analog television signal with 6 broadcasting sites (Bratogošt, Mrčevac, Kanjev Krš, Ostrog, Zavorovi and Kovačevo Brdo).
During 2011 acting upon the requests of entities from the area of electronic media, the Agency also withdrew some authorizations. Business organizations of “Antena M” d.o.o. Podgorica and “M Corona” d.o.o. Bar submitted to the Agency the requests for withdrawing the authorization for the use of radio frequencies for radio-relay links that the Agency had issued to those entities by its decisions. In their requests, the mentioned entities stated that for the purpose of transmission of broadcasting signals, they would use the system of radio-relay links owned by „The Broadcasting Center“ d.o.o. The Agency also received a request for withdrawing the authorization for the use of radio frequencies for specified radio-relay links submitted by the privately-owned institution “Radio television Panorama” Pljevlja, due to their unprofitable operation. Acting upon those requests, which the Agency considered justified, and in compliance with Article 81 paragraph 1 of the Law on Electronic Communications, the Agency adopted the
withdrawal of authorizations for the use of radio frequencies for some radio-relay links.
Being aware of the importance of the sector of audio-visual media services in Montenegro and the interest of their providers expressed to the Agency, pursuant to Article 99, paragraphs 1 and 2 of the Law on Electronic Media, the data on radio-frequencies available for calling of a public tender were delivered to the Agency for Electronic Media on several occasions during 2011. This Agency regularly informed the regulatory authority for electronic media about intense interest by the providers of audio-visual media services regarding the conditions and procedure for getting an authorization for the use of radio frequencies allocated to broadcasting service. In order to inform the public and stakeholders, the data on available radio frequencies allocated to terrestrial broadcasting systems is also placed on the Agency’s website.
3.1.3. Irrational use of radio frequenciesBased on the report on regular control and monitoring of RFS, and also the expert supervision by the Agency, it was found that during 2011 a number of entities were using radio frequencies allocated to broadcasting service in an irrational way.
The utilization of a number of radio frequencies, envisaged by the Broadcasting Frequency Allotment Plan of Montenegro for the use by national public broadcasting service Radio and Television of Montenegro (RTCG) did not start. Therefore, the Agency sent letters to “Broadcasting Center” d.o.o. and RTCG as early as in 2010, seeking the information about the reasons for non-utilization of the above stated frequencies and planned prospects for the start of their utilization.
Following these letters, “The Broadcasting Center” d.o.o. Podgorica delivered explanations to the Agency about non-utilization of those frequencies stating that it was due to the lack of financial resources allocated to the implementation of the transmitters. Considering the fact that the Government of Montenegro is also obliged to provide financial resources for the beginning of implementation of the network for terrestrial digital broadcasting, analog television transmitters in those frequencies might not be put into operation, particularly due to the fact the deadline for the termination of analog television is the end of 2012, such investments in analog transmitters would not be not rational from the financial point of use.
The deadline for the termination of analog television does not refer to broadcasting FM radio signals, and therefore the Agency took some concrete measures in the case of irrational utilization of radio frequencies in the band of 87.5 – 108 MHz. Specifically, on the basis of regular controls and monitoring of radio frequency spectrum, and expert supervision by the Agency’s expert services, it was found that business organization “IN CO” d.o.o. Podgorica had not started to use 15 radio frequencies in the band of 87.5 – 108 MHz allocated to broadcasting of radio FM signal for which the Agency had awarded the right of use to that business organization. The respective radio frequencies had not been used and that is why, the Agency, acting ex officio and in accordance with
40 www.ekip.me
Article 82 of the Law on Electronic Communications, issued a decision to “IN CO” d.o.o. Podgorica by which the authorization for the use of radio frequencies for broadcasting FM signals in the band of 87.5 – 108 MHz ceased to be valid.
3.1.4. International coordination of radio frequencies
One of very important responsibilities of the Agency in managing RF spectrum is coordination of the use of radio frequencies with competent administrations in neighbouring countries. During 2011, in compliance with the provisions of relevant ITU-R documents, radio frequencies allocated to fixed, mobile and broadcasting services were coordinated.
With Regulatory Agency for Communication of Bosnia and Herzegovina, the radio relay link in the band of 6,425-7,125 MHzwascoordinatedontherouteVeljigarač(MNE)-Leotar(BIH), at the request of business organization Dasto Montel d.o.o. Cetinje, while with the competent regulatory authority of the Republic of Albania and at the request of the company for telecommunications M:Tel d.o.o. Podgorica, radio frequencies in the band of 12,750-13,250 GHz for radio relay link Stegvaš (MNE) - Skadar (ALB) were coordinated. Although the coordination procedure was completed successfully, no authorization was issued, as meanwhile M:Tel dropped the submitted request.
In June 2011, a coordination meeting was held in Belgrade with the Republic Agency for Electronic Communications of Serbia (RATEL) in which two technical agreements were signed about the coordination of radio frequencies in the bands of 880-915/925-960 MHz, 1710-1785/1805-1880 MHz, and 1900-1980/2010-2025/2110-2170 MHz respectively, for IMT/UMTS systems. The participants in the meeting agreed upon more intensive activities on coordination of radio frequencies in other bands which were of interest (410-430 MHz for CDMA PAMR systems, 880-915/925-960 MHz for GSM systems, 1710-1785/1805-1880 MHz for DCS1800 systems, 3400-3800 MHz for BWA systems, etc.). The Technical agreement on coordination of IMT/UMTS systems in GSM bands of 880-915/925-960 MHz and 1710-1785/1805-1880 MHz, defined the manner of use of radio frequencies in mentioned bands and codes for IMT/UMTS networks in border area between the two countries, thus creating regulatory prerequisites for the implementation of UMTS systems in GSM bands. Another Technical agreement referred to coordination of radio frequencies in the bands of 1900-1980/2010-2025/2110-2170 MHz and codes for IMT/UMTS systems in border area between the two countries.
During 2011, in accordance with the provisions of international agreements, the Agency coordinated radio frequencies allocated to broadcasting service with the Croatian Agency for Post and Electronic Communications (HAKOM). On that occasion, a number of radio frequencies were successfully harmonized, and two agreements were signed thereupon. The agreement on bilateral coordination of broadcasting frequencies for T-DAB systems between the Administrations of Croatia and Montenegro concerns the coordination of radio frequencies
in the bands of 174-230 MHz which is, inter alia, allocated to terrestrial broadcasting of digital sound signals (T-DAB). The coordination included the total of 72 radio frequencies for Montenegro and 131 for Croatia, and was carried out in compliance with the procedure of the International Agreement GE06.The other agreement on bilateral coordination of broadcasting frequencies between the Administrations of Croatia and Montenegro for the needs of FM broadcasting systems referred to coordination of radio frequencies in the band of 87.5-108 MHz, allocated to terrestrial emission of FM broadcasting signals (FM radio). The coordination was carried out in compliance with the procedure from the International Agreement GE84 for the total of 27 radio frequencies for Montenegro and 23 radio frequencies for Croatia.
3.2. Assigned numbering/addresses and assessment of their rational use
The Law on Electronic Communications defines, inter alia, the responsibilities of the Agency in relation with limited resources – numbering and addresses. One of the competences of the Agency is the adoption and management of the Numbering Plan and Addressing Plan. The Numbering Plan17 is based on the Recommendation E.164 of the International Telecommunication Union (ITU). The Numbering Plan contains definitions, structure and register of numbers and codes for the numbering area of Montenegro. The Addressing Plan18 contains definitions and code structures of international signaling points, national signaling points and mobile networks, as well as identification code of the network for data communication and the way of managing it.
The Agency for Electronic Communications and Postal Services shall administer the Numbering and Addressing Plans in order to meet operators’ needs who, according to the Law, have right to be assigned numbers and addresses, making sure to do this in a fair and non-discriminatory way. On the basis of the request for an authorization for the use of numbering and/or addresses submitted by operators, the Agency issued an authorization for the use of these numbering resources. The Agency issues authorizations under the general administrative procedure and through a tender procedure, in compliance with the Law on Electronic Communications, Numbering Plan and Addressing Plan.
In 2011, operators submitted 42 requests for authorizations for numbers and/or addresses and 5 requests for the withdrawal of rights for the use of these resources. The operators listed below submitted requests for authorization for the use of scarce resources of numbering and/or addresses:
• ”CrnogorskiTelekom”-22requests,• ”Telenor”-9requests,• ”M:Tel”-6requests,• ”ProntotelCompany”-1request,
17 Numbering Plan was published in „Official Gazette of Montenegro“, No 34/09, 65/09 and 11/1018 Addressing Plan was published in „Official Gazette of Montenegro“ No 34/09
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• ”SkylinksTelecom”-2requests,• ”VoIPTelekom”-2requests.
The operators below submitted requests for the withdrawal of authorizations for the use of numbering and/or addresses:• ”CrnogorskiTelekom”-1request,• ”M:Tel”-1request,• ”Dynacom”-2requests,• ”Dimal”-1request.
On the basis of requests submitted, decisions were issued on the authorization for and withdrawal of rights to use numbers and/or addresses. The Agency shall keep a register of assigned numbers or addresses, and the overview of assigned numbers and addresses is placed on the Agency’s website.
The charts and graphs below present the overviews of numbering and addresses for which authorizations for use were issued or revoked in 2011, as well as the use of numbering and addresses as of 31.12.2011:
Overview of numbering and addresses for which authorizations were issued in 2011
Numbering type
Operator Total numbersCr
nogo
rski
Tele
kom
Tele
nor
M:Te
l
Skyl
inks
Tel
ecom
VoIPTelekom
Pron
tote
l Com
pany
Geographic numbers 1400 1400Non-geographic numbers 078 300000 300000Non-geographic numbers 080 2 2Non-geographic numbers 088 1000 1000Non-geographic numbers 094 and 095 3 3Short codes – four-digit number 3 1 1 1 1 7Short codes – five-digit number 12 10 26 48Non-geographic numbers for mobile networks 1000 1000
Overview of addresses for which authorizations for use were issued in 2011
Type of signaling point / code
Operator Total codes
Crn
og
ors
ki
Tele
kom
Tele
nor
M:Te
l
VoIPTelekom
Sk
yli
nk
s Te
leco
m
Pro
nto
tel
Com
pany
National signaling point 13 14 3 1 1 1 33
Overview of numbering for which authorizations for use were revoked in 2011
Numbering type
Operator Total numbers
Dyn
acom
Dim
al
M:Te
l
Crno
gors
ki
Tele
kom
Non-geographic numbers 078 10000 10000
Non-geographic numbers 088 5000 5000
Short codes – four-digit number 1 1
Short codes – five-digit number 1 1
Non-geographic numbers 080 1 1
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Overview of addresses for which authorizations for use were revoked in 2011
Type of signaling point /code
Operator Total codes
M:Te
l
Crn
og
ors
ki
Tele
kom
Dyn
acom
Dim
al
International signaling point 1 1
National signaling point 1 1 1 1 4
Overview of the use of numbering resources as of 31. 12. 2011
Numbering type
Operator
T o t a l numbers
Crno
gors
ki T
elek
om
Tel
enor
M:T
el
IP M
ont
VoIP
Tel
ekom
Skyl
inks
Tel
ecom
Wim
ax M
onte
negr
o
BBM
i
Pron
tote
l Com
pany
Geographic numbers 1445140 1,445,140
Non-geographic numbers 078 20000 10000 5000 300000 1000 10000 346,000
Non-geographic numbers 077 5300 5,300
Non-geographic numbers 080 47 47
Non-geographic numbers 088 1000 1000
Non-geographic numbers 094 and 095
86 86
Short codes- three-digit number
2 2
Short codes - four-digit number 18 2 2 1 1 1 1 26
Short codes- four-digit number – reserved
4 4
Short codes- five-digit number 230 67 51 348
Short codes - five-digit number – reserved
12 12
Non-geographic numbers for mobile networks (assigned)
1032000 1100000 1000000 3,132,000
Non-geographic numbers for mobile networks (reserved)
238000 238,000
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Overview of the use of addressing resources as of 31. 12. 2011
Type of signaling point / code
Operator T o t a l codes
Crn
og
ors
ki
Tele
kom
Tele
nor
Mte
l
Voip
Tel
ekom
Pron
tote
l C
ompa
ny
Skyl
inks
Te
leco
m
Wim
ax
Mon
tene
gro
IP M
ont
International signaling point (ISPC) 6 2 2 10
National signaling point (NSPC) 55 31 14 1 1 1 1 1 105
Mobile network code (MNC) 1 2 1 4
Data network identification code (DNIC) 2 2
Use of numbering resources as of 31. 12. 2011
Wimax Montenegro 0,02% M:Tel19,73%
Crnogorski Telekom 52,66%
BBMi 0,19%
Prontotel Company 0,01%
IP Mont 0,19%
Voip Telekom 0,12%
Skylinks Telecom 5,8%
Use of addressing resources as of 31. 12. 2011
Crnogorski Telekom 52,89%
Telenor28,92%
M:Tel 14,09%Skylinks Telecom 0,82%
Wimax Montenegro 0,82%
VoIP Telekom 0,82%
Prontotel Company 0,82%
IP Mont 0,82%
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4. LEVEL OF DEVELOPMENT OF THE ELECTRONIC COMMUNICATIONS SECTOR IN 2011, WITH THE OVERVIEW OF VOLUME, KIND AND QUALITY OF SERVICES PROVIDED TO END-USERS BY OPERATORS AND SERVICE PROVIDERS
4.1. Overview of registered electronic communications operators during 2011
Since the adoption of the Law on Electronic Communications 42 operators have been entered into the Register of operators which is kept by the Agency for Electronic Communications and Postal Services.
During 2011, the following economic entities were entered into the Registry of operators:1. „Media Net“ d.o.o. Podgorica, for the following operations: public cable electronic communications
network,publicelectroniccommunicationserviceofthedistributionofradioandTVprogramsuptoend-users and public electronic communication services of Internet access for the municipalities of Berane, Rožaje and Cetinje.
2. „M - kabl“ d.o.o Podgorica, for the following operations: public cable electronic communications network, publicelectroniccommunicationserviceofthedistributionofradioandTVprogramsuptoend-users,publicelectronic communication services of Internet access, public fixed electronic communications network and public fixed electronic communication services for the provision of public service of voice transmission over IT –based networks.
3. „Skylinks Telecom“ d.o.o. Podgorica,forcarryingoutVoIPelectroniccommunicationsservice:outgoinginternational calls, termination, calling cards, number (or carrier) pre-selection, soft-phone (PC, Mac, mobile), call shop, IP -PBX/Centrex, corporate SIP trunking, eFax, chat service.
4. „Satellite broadband service network Montenegro“ d.o.o. Podgorica, for providing the public electronic communications services over satellite, the public service of Internet access and the public service of leased lines.
5. „Teleinfo.ME“ d.o.o. Podgorica, for service from the scope of the Universal Service in the whole territory of Montenegro, for providing the services of Universal Directory and the Universal Enquiry Service for giving information about subscribers.
6. „Towers Net“ d.o.o. Podgorica, as the operator of public electronic communication services over the IP-basednetworkforprovidingthepublicserviceofInternetaccess,VoIP,videostreaming,faxandvoiceservice.
7. „VoIP telekom“ d.o.o. Podgorca, as the operator for providing the public fixed electronic communications network, public fixed electronic communications for the provision of the public service of voice transmission over IP-based networks, the value-added services, the service of wireless Internet access by means of frequencies in compliance with the Rulebook on radio frequencies and conditions under which RF can be used without authorization.
8. „ALO group“ d.o.o. Podgorica, for providing public electronic communication services over their own functional network – system.
4.2. Market of fixed telephony and public pay phones
In 2011, Crnogorski Telekom a.d., whose majority owner is Magyar Telekom, and M:Tel company, which is owned by Serbian Telekom and Telekom of Republika Srpska provided the services of fixed telephony.
Attheendof2011,thenumberoffixedsubscriberlinesamountedto170,856,whichcorrespondedthepenetrationof27.55%.Comparedto2010,ariseinthenumberoffixedsubscriberlinesof0.06%wasrecorded.Thetrendinthenumberoffixedsubscriber lines in Montenegro with penetration is illustrated by the following Figure.
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184.560 170.933 168.233 176.289 174.013 171.749 170.553 170.856
29,76%
27,56%
27,13%
28,43%28,06%
27,69% 27,50% 27,55%
24,00%
25,00%
26,00%
27,00%
28,00%
29,00%
30,00%
160.000
165.000
170.000
175.000
180.000
185.000
190.000
2004 2005 2006 2007 2008 2009 2010 2011
Changes in the number of �xed line subscribers in Montenegro in the period 2004 - 2011
Number of �xed linesPenetration
Out of the total number of fixed telephony connections, Crnogorski Telekom a.d. (T-Com) had 167,454 and M:Tel 3,402 connections,orinpercentages:T-Com98.01%andM:Tel1.99%.
It is necessary to note that operator M:Tel provides the services of fixed telephony by fixed wireless access - Wi-Max network (assigned numbering 078), implemented in frequency bands of 3.4 – 3.6 GHz.
The shares of fixed telephony operators according to the number of connections are illustrated by the Figure below.
167.454 (98,01%)
3.402 (1,99%)
T-Com M:Tel
Shares of �xed telephony operators according to the number of connections
ThelevelofdigitalizationoffixedconnectionsinMontenegrohasachieved100%forsixyearsinarow,accordingtowhich,based on this criterion, our country belongs to the group of developed European countries.
87,00%
92,50%
98,00%
99,80% 99,90% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00%
85%
90%
95%
100%
105%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Digitalization
Digitalization trend in Montenegro in the period 2001-2011
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The total number of ISDN connections at the end of 2011 amounted to 5,273, out of which 5,035 connections were in basic access and 238 in primary access. On this base the number of ISDN users was calculated, and at the end of 2011, it amounted to17,210.Thisnumberwasby3.03%smallercomparedtopreviousyear.ThefallinthenumberofISDNuserscanbeduetothe penetration of ADSL and WiMAX services to Montenegrin market.
The trend in the number of ISDN lines in the period 2001-2011 is given in the Figure below.
207574
2.783
5.061
7.1837.438 7.123
6.5986.001
5.4845.035
26 66 90 67193 123 155 187 209 226 238
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Trend in ISDN lines in Montenegro in the period 2001-2011
ISDN-PRAISDN-BA
ThenumberofADSLconnectionsin2011amountedto64,712,whichwasby12.80%morethanin2010.BearinginmindthatT-Com launched this service in 2005, it can be considered that such a rise has been really dynamic. Out of this number of ADSL connections,57,877connectionsor89.44%referredtoresidentialcustomersand6,835or10.56%tonon-residentialcustomers.
The trend in the number of ADSL connections in the period from 2005 to 2011, with the overview of connections per categories of residential and non-residential customers is given in the Figure below.
827 5.051 10.863
22.964
37.872
51.10757.877
284 1.988 3.565 4.875 5.601 6.263 6.8351.111
7.039
14.428
27.839
43.473
57.370
64.712
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
2005 2006 2007 2008 2009 2010 2011
Residential customersNon-residential customersTotal
Trend in the number of ADSL subscribers in Montenegro in the period 2005-2011
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Public pay phones
In 2011, only the Montenegro Post had a system of public payphones developed.19 Taking account of the total number of installed public payphones in the territory of Montenegro, i.e. the penetration of public payphones per 1000 citizens, it is obvious that the provision of this service had a falling trend due to increasing orientation of citizens, economy and tourists towards mobile telephony. That was particularly conspicuous in 2007, when the third mobile operator entered Montenegrin market.
1,49 1,65 1,52 1,30 1,20 1,02 0,86 0,51 0,44 0,33 0,310,00
0,25
0,50
0,75
1,00
1,25
1,50
1,75
2,00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Number of public pay phones per 1.000 inhabitants
During 2011 the Montenegro Post had the total of 193 public payphones, while other operators stopped providing that service. The majority of payphones, excluding Podgorica, was in coastal municipalities. The analysis of the number of payphones per operators has shown that in recent years only the Montenegro Post managed to maintain this service, although to a limited extent.
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
70,00%
80,00%
90,00%
100,00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Shares of operators in providing the service of public pay phones in Montenegro
BristolHalocardPost O�ce
19 AsmallnumberofpublicpayphoneswerealsoownedbyVoIPserviceoperators,suchas:VOIPd.o.o.fromUlcinjandPronto-Tel d.o.o. from Budva.
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4.3. Mobile telephony market
In Montenegrin mobile telephony market, there are three operators: „Telenor“ d.o.o, Crnogorski Telekom a.d. and M:Tel d.o.o.
At the end of 2011, the number of mobile telephony users in Montenegro totaled to 1,159,112, which corresponded to penetrationof186.94%.Comparedtotheendof2010,thenumberofusersshowedadropof6.32%.
The biggest penetration in mobile telephony market in Montenegro was recorded in September 2011 when it reached 205.58%,whilethelowestwasinMay,being172.76%.
The Figure below shows the penetration of mobile telephony in 2011 per months.
1.16
1.62
3
1.14
7.77
7
1.09
6.39
1
1.07
7.88
9
1.07
1.38
7
1.11
5.92
5
1.20
6.11
0
1.27
2.36
5
1.27
4.63
1
1.22
8.84
1
1.15
6.56
3
1.15
9.11
2
187,31%185,08%
176,80%173,81%
172,76%179,95%
194,49%
205,21% 205,58%
198,91%186,53%
186,94%
120%
130%
140%
150%
160%
170%
180%
190%
200%
210%
220%
900.000
950.000
1.000.000
1.050.000
1.100.000
1.150.000
1.200.000
1.250.000
1.300.000
1.350.000
1.400.000
01 02 03 04 05 06 07 08 09 10 11 12
Subscriber number Penetration
Penetration trends in mobile telephony in Montenegro during 2011
Out of 1,159,112 users of mobile telephony, the number of prepaid users reached 841,071, and the number of postpaid users amounted to 318,041. The shares of postpaid and prepaid users in the total number of customers are presented in the following Figure.
prepaid73%
postpaid27%
Shares of pre-paid and post-paid users in total number of users
Out of 1,159,112 users of mobile telephony in Montenegro at the end of 2011, mobile operator Telenor had 470,257, Crnogorski Telekom401,958andM:Tel286,897users,orinpercentages:Telenor40.57%,CrnogorskiTelekom34.68%andM:Tel24.75%.
The Figure below illustrates the share of each of these operators in the total number of users.
Telenor
T- mobile
Mtel
Operator shares in total number of users
M:Tel 24,75% Crnogorski Telekom 34,68%
Telenor 40,57%
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Out of the total number of 841,071 prepaid users, Telenor had 341,672, Crnogorski Telekom 272,036, and M:Tel 227,363 users, while out of the total number of 318,041 postpaid users, Crnogorski Telekom had 129,922, Telenor 128,585 and M:Tel 59,534 users.
The corresponding levels of shares according to the number of prepaid and postpaid users of mobile operators expressed in percentages are given in Figure below.
Telenor
T- mobile
Mtel
M:Tel 27% Crnogorski Telekom 32%
Telenor 41%
Operator shares in total number of pre-paid users
Traffic volume and structure
During 2011, the users of all three Montenegrin operators of mobile telephony generated 1,481,648,465 minutes of outgoing calls,whichaccountedfortheriseof4.1%comparedtopreviousyear.Outofthisnumber,theusersofTelenorhad575,516,103,ofCrnogorskiTelekom568,777,764andofM:Tel337,354,598minutesofoutgoingcallsorinpercentages:Telenor38.84%,CrnogorskiTelekom38.39%andM:Tel22.77%.Thesharesofallthreeoperatorsaccordingtothenumberofminutesofoutgoing calls are presented in the following Figure.
Telenor 38,84%
Crnogorski Telekom 38,39%
M:Tel 22,77%
Operator shares according to number of minutes of outgoing calls made during 2011
Telenor
T- mobile
Mtel
InDecember2011M:TelhadthebiggestshareinthemarketofSMSmessages(40%).ThenfollowedTelenorwith31%andCrnogorskiTelekomwith29%.
Market shares of operators per number of SMS messages during December 2011 are given in Figure below:
Crnogorski Telekom 29%
Telenor 31% Telenor
T- mobile
Mtel
M:Tel 40%
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4.3.1. Registration of prepaid customers of mobile services The Rulebook on the manner of registration of customers using the services of public communication networks (“Official Gazette of Montenegro”, No 77/2009 of 19. 11. 2009) defines the process of collecting, storing and registration of data on the users of fixed telephony, mobile telephony and Internet. This Rulebook determined that operators had to register the users of SIM cards which had been activated until the beginning of this Rulebook implementation, in the period of 18 months from the date of when its implementation had begun, i.e. until 27. 05. 2011. The Rulebook also determined that SIM cards whose holders had not get registered within the stipulated period would be permanently deactivated by operators, i.e. their further use had to be prevented. Several months before the envisaged deadline, the operators sought extension of the deadline for theregistrationofprepaidusersofmobiletelephony,asuntilthattime,only30%ofthemhadbeenregistered.TheMinistryfor Information Society and Telecommunications extended the deadline for registration of prepaid users by 31. 12. 2011 by the provisions of the Rulebook amending the Rulebook on the manner of registration of customers using the services of public communication networks (“Official Gazette of Montenegro”, No 24/11).
At the request of the Agency for Electronic Communications and Postal Services, operators informed users during 2011 about the obligation to be registered and about the necessary procedure for registration. According to information which operatorssubmittedtotheAgency,76%prepaidSIMcardswiththestatusofactivecards,wereregisteredbytheendof2011.The overview of registered prepaid users at the end of 2011 is given in the following table:
Number of registered prepaid users
Crnogorski Telekom (T-Mobile) 273,752
Telenor 398,426
M:Tel 263,485
Total 935,663
As it was determined by the Rulebook on the manner of registration of customers using the services of public communication networks that SIM cards whose users had not got registered by the stipulated deadline were to be permanently deactivated by operators, the Agency, at the very beginning of 2012, demanded from all three operators to take measures to prevent the use of unregistered SIM cards.
4.3.2. Implementation of mobile country code (MCC) 297 and replacement of SIM cardsAfter Montenegro had renewed its state independence, the International Telecommunication Union (ITU) assigned to Montenegro in September 2007, inter alia, a new mobile country code (MCC) 297. In the previous period, Montenegro along with Serbia, used the MCC 220. That mobile code was used by mobile telephony operators Telenor (ProMonte) and Crnogorski Telekom (T-Mobile). The third operator M:Tel has used MCC 297 from the beginning of its operations in Montenegro.
Implementation, i.e. the replacement of mobile codes (MCC+MNC) in Montenegro is the fist case of the kind in telecommunications practice in the world. The process of code replacement is a really complex activity, which is implemented in a long period of time and calls for engagement of considerable technical and staff resources. Having that in mind, relevant ministries of Montenegro and Serbia reached an agreement that a transitional period for the joint use of mobile country code MCC 220 should be four years, i.e. by 1 October 2011. By a subsequent agreement, this deadline was extended by 1 January 2012.
Implementation of new country codes MCC and MNC called for technical configuration of systems, complete replacement of SIM cards, where it was necessary to ensure functionality of services with a special focus on functioning of roaming service. The process required a complicated and challenging coordination of activities in all relevant network elements, replacement of SIM cards, amendments to global roaming agreements and configuration in the networks of roaming partners. The adjustment required from all operators which had roaming agreements with Montenegro to implement the new MCC to enable customers to use continually roaming service in partners’ networks. Therefore, for this purpose it was necessary to renew the procedure of the commercial launch of existing services with the new MCC in the same way as it had been done with the old MCC (distribution of new testing SIM, implementation of new parameters in the partners’ networks, testing of existing services and their validation, signing of new bilateral agreements on the commercial launch of services for the new MCC).
The switchover to the new MCC 297 and mobile network codes has been successfully completed, and the obligation to change codes in compliance with agreed deadlines has been fulfilled. Telenor completed the replacement of old codes with new ones on 11 November 2011, and a Crnogorski Telekom on14 December 2011.
Telenor implemented the mobile country code within the period from October 2009 till December 2011, through three phases:• Iphase:ImplementationofnewMCCandMNCcodesandprovidingconditionsforparalleluseofoldand
new MCC and MNC in the network – included implementation in core part of the network, service platforms and the System for billing and modification of user profile;
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• IIphase:ImplementationofnewMCCandMNCcodesandprovidingconditionsforparalleluseofoldandnewMCC and MNC in the networks of roaming partners – included the activities on intensive communications with roaming partners and joint work on implementation of new MCC and MNC and renewal of agreements with partners;
• IIIphase:ThereplacementofSIMcardsofallTelenorcustomers,whichincludedvariousstationaryandmobile ways of replacement, depending on the categories of customers (pre-paid/post-paid/ non-residential customers/residential customers).
A similar process was conducted in the mobile network of Crnogorski Telekom. During the change of E212 MCC, the most important and obvious procedure for the public was the replacement of SIM cards for all customers of Telenor and Crnogorski Telekom.
Telenor completed the replacement of SIM cards by 31. 01. 2012, whose numbers are given below:• forpostpaidcustomers:101,000• forprepaidcustomers:280,000.The number of replaced SIM cards of the customers of Crnogorski Telekom was as follows:• forpostpaidcustomers:113,484• forprepaidcustomers:248,916.
The customers that have not replaced their SIM cards yet can use services within the network, which allow them access. In order to complete this process in full, the operators shall in the forthcoming period continue to encourage the customers through different forms of communication to replace their SIM cards.
Now the new MCC 297 is the only code used in Montenegro, which in the combination of the MNC indicates a specific mobile telecommunication network, as can be seen in the following table:
OPERATOR Mobile country code MCC (ITU – E.212) Mobile network code MNC
Telenor d.o.o. 297 01
Crnogorski Telekom A.D. 297 02
M:Tel d.o.o. 297 03
MNC was assigned successively, in order of the operators’ entry to this telecommunications market.
M:Tel has used the code 297 03 from the beginning, while Telenor (ProMonte) and Crnogorski Telekom (T-Mobile) made replacement of these codes. Telenor has replaced code 220 02 with 297 01, and Crnogorski Telekom code 220 04 with 297 02.
The Agency forwarded to the ITU the form of notification about new mobile codes (MCC+MNC) in Montenegro to be published on the website of the ITU Operational Bulletin.
4.3.3. Harmonization of the form of itemized bills with Article 113 of the Law on Electronic Communications
According to Article 113 of the Law on Electronic Communications, operators which provide public communication services shall be obliged to provide the users with the itemized bill, unbundled to the extent that enables easy overview of all items and verification of the calculation of the amount. Paragraph 3 of the same article defines that the itemized bill for publicly available telephone services, at a fixed location, shall contain separately the data on the number of calls and their duration, number of accounting units, individual price per accounting unit, and amounts appearing separately for local calls, long-distance calls, international calls, calls to mobile public communications networks, calls to numbers of value-added services and data transfer calls. Pursuant to paragraph 4 Article 113 of the Law on Electronic Communications, the provision from paragraph 3 of this Article shall be applied to other publicly available electronic communications services.
Crnogorski Telekom, Telenor and M:Tel (for mobile services) delivered to their users detailed bills for provided services, which were itemized per service provided, but the bills did not contain the information about the number of calls and their duration, number of accounting units, individual price per accounting unit separately per the category of calls.
M:Tel delivered to its users detailed bills for provided services at a fixed location, which was as much in compliance with Article 113 of the Law, as possible. Only the calls to special numbers were not itemized per sub-categories, and therefore the data on the price of accounting interval was missing.
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Following the insistence on the part of the Agency that the form of a detailed bill had to be complied with the Law, the following agreement was reached with operators:
• harmonizationoftheformofadetailedbillfortheservicesprovidedatafixedlocationistobecarriedoutin one step.
• harmonizationoftheformofadetailedbillforprovidedmobileservicesistobemadeintwosteps.
The operators were delivered a draft bill form for services provided at a fixed location and for the services on the mobile network, in accordance with the agreed time schedule for harmonization. The deadline for the harmonization of a detailed bill was 31. 12. 2011.
On the basis of expert control whether operators were acting in compliance with the provisions of Article 113 of the Law, it was found that the operators had acted according to issued orders, and that monthly bills for provided services on the fixed and mobile networks of M:Tel-a and Crnogorski Telekom, as well as on the mobile network of Telenor contained all items envisaged by Article 113 of the Law.
4.4. Internet and broadband market
The rising trend in the number of users of broadband Internet access continued in 2011, so that the number of users of fixed broadbandaccessroseby14.3%andofmobilebroadbandaccessby89.4%.Thepenetrationoffixedbroadbandaccessattheendof2011was13.3%,andofmobilebroadbandaccesswas10.4%.Concerningthefixedbroadbandaccess,theusersofADSLwerethemostnumerouscategories(79%),followedbytheusersofWiMAXandCDS20,accountingfor7%and4%respectively.
All operators increased the number of their international links to the internet. Crnogorski Telekom had two links of the capacity of 10 Gb/s, one towards Telekom Serbia, the other towards Telekom Croatia. M:Tel had international Internet link of the capacity of 775 Mb/s towards Telekom Serbia, while Telenor had a link of the capacity of 450 Mb/s towards Telenor Serbia and a link of the capacity of 150 Mb/s towards Telekom Serbia. Dasto Montel had a link of the capacity of 20 Mb/s (only international links are stated here).
4.4.1. Dial-up Internet accessIt is obvious that dial-up Internet access cannot meet the needs of today’s users, so the number of its users and the volume of generated traffic have been decreasing from year to year.
CrnogorskiTelekomistheonlyoperatorthatprovidesthisservice,andcomparedto2010,thenumberofusersfellby62.8%.During 2011, 4,072 users had dial-up Internet access, out of which 1,875 were prepaid, and 2,197 postpaid users. The table below gives an overview of users with dial-up Internet access per categories of residential and non-residential users.
Number of users - prepaid Number of users - postpaidR e s i d e n t i a l users
Non-residential users Total R e s i d e n t i a l
usersNon-residential users Total
T-Com 1.689 186 1.875 1.919 278 2.197Total T-Com 4.072
Thedropinthenumberofuserswasfollowedbyadropindial-uptrafficof72.2%comparedto2010.TheusersofCrnogorskiTelekom generated dial-up traffic in duration of 6,285,363 minutes. The table below gives the overview of traffic per categories of residential and non-residential customers.
Prepaid dial-up traffic (minutes) Postpaid dial-up traffic (minutes)R e s i d e n t i a l users
Non-residential users Total R e s i d e n t i a l
users Non-residential users Total
T-Com 2.978.465 349.657 3.328.122 2.197.170 760.071 2.957.241Total 6.285.363
20 CDS – cable distribution systems
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4.4.2. Fixed broadband Internet access
ADSL Internet access
ThenumberofADSLuserswaspermanentlyrising,sothatitsnumberwasfor12.8%biggerthanin2010.CrnogorskiTelekomhad 64,717 ADSL users in 2011, out of which 57,928 were residential customers and 6,789 non-residential customers. The table below gives a comparative overview of the numbers of ADSL users.
ADSL users2005 2006 2007 2008 2009 2010 20111,095 6,639 14,428 27,839 43,473 57,370 64,712
The table below gives the numbers of ADSL users per municipalities
Municipality 2008 2009 2010 2011
Podgorica 8,798 15,978 20,833 23,809
Kolašin 235 315 352 413
Danilovgrad 486 837 977 1,242
Nikšić 1,513 2,352 3,753 5,131
Plužine 47 85 152 127
Šavnik 23 25 32 45
Žabljak 111 165 202 247
Pljevlja 508 857 1,359 1,215
Bijelo Polje 790 1,320 2,259 2,322
Mojkovac 118 244 302 430
Berane 485 825 1,315 1,524
Andrijevica 31 44 92 106
Plav 511 797 857 1,162
Rožaje 448 806 1,074 1,252
Cetinje 697 985 1,150 1,471
Herceg Novi 2,637 3,899 5,058 5,163
Kotor 2,326 3,086 3,709 4,310
Tivat 991 1,464 2,028 2,190
Budva 2,759 3,232 4,137 4,114
Bar 2,773 3,981 5,042 5,699
Ulcinj 1,551 2,176 2,687 2,740
Total: 27,838 43,473 57,370 64,712
Flat package - ADSL Fl@t2 was the most popular among residential users, with maximum download rate of 2Mb/s. About 79.3%residentialusersusedthatpackage.Outofthenumberofnon-residentialusers,71.6%usedFl@tB4packagewithmaximum download rate of 4Mbps.
AvailabilityofADSLservicewas99.9%,i.e.99.9%userswithfixedtelephoneconnectioncouldintroduceADSLservice.In2011, Crnogorski Telekom increased the number of ADSL hubs from 169 to 192.
WiMAX Internet access
ThenumberofM:Tel’suserswithWiMAXInternetaccessincreasedby7.4%comparedto2010,sothatattheendof2011,M:Telhad 7,291 users, out of which 6,695 were residential customers and 596 non-residential customers. The number of users of Telenor’s WiMAX network had not changed, and amounted to 5. The following table shows an overview of the numbers of
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WiMAX users in the period following the issuance of the first licenses (mid-2007).
WiMAX users2007 2008 2009 2010 20111,707 5,520 6,271 6,789 7,296
The table below shows the overview of M:Tel’s WiMAX users per municipalities.
Municipality 2008 2009 2010 2011
Bar 192 233 204 226
Berane 224 332 320 315
Bijelo Polje 235 382 254 178
Budva 156 10 912 1,225
Cetinje 507 484 442 421
Danilograd 1 0 13 23
Herceg Novi 27 49 65 78
Kolašin 0 3 6 10
Kotor 33 37 23 25
Mojkovac 0 0 1 2
Niksić 827 1036 928 938
Pljevlja 2 13 9 10
Podgorica 3,287 3,611 3,551 3,777
Rožaje 15 30 29 27
Tivat 14 35 23 23
Ulcinj 0 0 4 13
Total 5,520 6,255 6,784 7,291
Internet access via cable distribution systems (CDS)
In 2011, in addition to Podgorica, Pljevalja and Herceg Novi, CDS operator M-kabl started to provide the service of Internet access to Bijelo Polje, Tivat and Bar over its cable distribution network. The number of users more than tripled, so that at the end of 2011, M-kabl had 2,172 users, out of which 2,142 were residential customers and 30 non-residential customers. The most popularpackageamongresidentialcustomerswasflatpackageof768/64kb/s,whichwasusedby73.9%customers.Thetotal capacity of the link to the Internet was 250 Mb/s. The Table below shows an overview of M-kabl users per municipalities.
Municipality 2010 2011Podgorica 420 755Pljevlja 229 681Bijelo Polje - 229Herceg Novi 26 213Tivat - 85Bar - 209Total: 675 2,172
In addition to M-kabl, Internet access via cable distribution networks was also provided by Cabling, an operator from Budva. ThenumberofCablingusersincreasedby36.7%comparedto2010,sothatattheendof2011Cablinghad1,166users,outof which 1,102 were residential customers and 64 non-residential customers. Cabling provides the service of Internet access in collaboration with M:Tel.
Cabling users
2009 2010 2011
445 853 1,166
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FTTx
2011 saw more intensive fiber optic installations up to end-users, so that at the end of 2011 there were 8,152 connections installed, out of which 1,029 were active. This type of Internet access is available in Podgorica, Danilovgrad, Herceg Novi, Tivat, Budva and Bar. The operators that provide these services are Crnogorski Telekom and Cabling. The tables below present an overview of connections per municipalities and operators.
FTTx connections-per municipalitiesMunicipality Operator FTTH21 FTTB22 FTTC23
Installed Subscribers Installed Subscribers Installed Subscribers Bar CT 204 15Budva Cabling 223 34 49 49 174 173Budva CT 669 25Danilovgrad CT 6 6Herceg Novi CT 485 52Podgorica CT 6.231 619Tivat CT 111 56Total: 7,929 807 49 49 174 173
Operator FTTH FTTB FTTCInstalled Subscribers Installed Subscribers Installed Subscribers
Cabling 223 34 49 49 174 173CT 7,706 773Total installed 8,152Total subscribers 1,029
Internet service via leased lines
In the course of 2011, 4 operators provided Internet services via leased lines. In 2011 Crnogorski Telekom increased the number of leased lines from 193 to 417. This number decreased from 112 to 107 with MNNews, increased from 4 to 44 with M:Tel, and decreased from 2 to 1 with Cabling.
The table below shows the numbers of leased lines for providing Internet services per operators and municipalities.
Municipality Crnogorski Telekom MNNews Cabling M:Tel
Podgorica 283 67 0 39Danilovgrad 3 5 0 1Bar 10 1 0 0Berane 2 2 0 0Bijelo Polje 2 0 0 0Budva 34 6 1 2Cetinje 5 0 0 0Herceg Novi 6 3 0 0Kolašin 5 0 0 1Kotor 11 1 0 0Nikšić 24 8 0 0Pljevlja 7 1 0 1Plav 2 0 0 0Tivat 6 8 0 0Ulcinj 17 5 0 0Total: 417 107 1 44
21 FTTH - Fiber to the home22 FTTB - Fiber to the building23 FTTC – Fiber to the Curve/Cabinet
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Internet access via MPLS24
Out of 78 users of MipNet network of Crnogorski Telekom, only two used the service of Internet access.
3userson43locationsusedInternetaccessviaM:Tel’sIPMPLSVPNservice.
Wireless access points (2.4 GHz and 5 GHz)
The total number of wireless access points decreased from 125 to 107 in comparison with 2010, so that Crnogorski Telekom had 14, MNNews 69, Telenor 12 and Dasto Montel 12 access points.
In 2011, 1,561 users had Internet access via access points of Crnogorski Telekom, which was over seven times more compared to 2010.
ThenumberofTelenorusersamountedto2,398,whichshowedadropof44.8%comparedto2010.
At the end of 2011, MNNews had 2,600 users on wireless access points operating in radio-frequency band of 2.4 GHz, which accountedforariseof23.8%comparedto2010.MNNewsdidnotchargeforthisservice.
The number of Dasto Montel users increased from 357 to 376.
The table below shows the distribution of access points per municipalities at the end of 2011
Municipality Crnogorski Telekom MNNews Telenor Dasto Montel
Podgorica 2 11 3 0
Bar 1 2 0 0
Berane 0 7 0 0
Bijelo Polje 0 7 0 0
Budva 1 4 6 0
Cetinje 4 0 0 0
Herceg Novi 4 1 1 0
Kotor 1 1 2 0
Nikšić 0 2 0 0
Danilovgrad 0 3 0 0
Kolašin 1 0 0 0
Pljevlja 0 8 0 12
Tivat 0 14 0 0
Ulcinj 0 2 0 0
Andrijevica 0 0 0 0
Zabljak 0 7 0 0
Total: 14 69 12 12
The structure of broadband Internet access users per types of access, expressed in percentages, is given in the following Figure.
24 MPLS (Multiprotocol Label Switching)
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ADSL79%
WiMAX7%
KDS4%
Hot spots(2,4GHz i 5GHz) 8% FTTx
1%
Leased lines and MPLS 1%
ADSL
WiMAX
KDS
Hot spots(2,4GHz i 5GHz)
FTTx
Leased lines and MPLS
4.4.3. Mobile broadband Internet accessThenumberofusersofmobilebroadbandInternetaccessviadataSIMcardsroseby89.4%comparedto2010.ThenumberofCrnogorskiTelekomusersincreasedby45.6%,andthenumberofTelenorusersroseby144%.Thetablebelowillustratesthe structure of data SIM cards users in 2011.
Postpaid Prepaid Total
Crnogorski Telekom 7,685 19,765 27,450
Telenor 15,146 21,820 36,966
Total: 64,416
The following table shows the number of data SIM cards users per operators in the period 2008-2011. It should be noted that M:Tel does not offer data SIM cards which are used for data traffic only.
Users of data SIM cards2008 2009 2010 2011
T-Mobile 3,143 9,172 18,856 27,450
Telenor 4,954 11,183 15,149 36,966
Total 8,097 20,355 34,005 64,416
The users of data SIM cards of Crnogorski Telekom generated the traffic of 268,377,943 MB, which was almost a two-fold increase compared to 2010; the respective users of Telenor generated the traffic of 429,962,986 MB, which made an increase of250%incomparisonwith2011.
During 2011, 163,051 M:Tel users achieved Internet access by mobile phone or 3G modem, out of which 34,760 were postpaid users and 128,291 prepaid users. Out of the total number of M:Tel users that achieved Internet access by mobile phone or 3G modem40.9%gotconnectedviaUMTS/HSDPAtechnology.
4.4.4. Internet penetrationOn the basis of the Survey on the use of ICT in Montenegro, which was done in the period 01-28 February 2011, the results showedthat54.1%populationusedtheinternetinlastthreemonths.
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2,70%4,10%
12,50%16,00%
19,80%23,90%
31,50%
38,50%
43,90%
50,90%54,10%
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Internet penetration
The penetration of fixed broadband access (users of ADSL, WiMAX, cable modems, leased lines, FTTx, etc.) at the end of 2011 amountedto13.3%,whichmadeanincreaseof1.7%comparedto2010.Whenthepenetrationisconsideredinrelationwiththenumberofhouseholds,thenitreached42.4%,whichaccountedforariseof2.4%incomparisonwith2010.
The Figure below contains comparative data on the penetration of fixed broadband access in the Southeast European countries for the period January 2009 – January 2011. The source is the Report of Cullen International” (November 2011).
AL XK BA TR Avg-9
ME RS MK RO BG HR HU SI EU-27
IS
2,5% 5,1% 4,9% 8,2% 7,7% 5,5% 6,4% 8,8% 11,7%11,2%11,8% 16,3% 21,0%22,9%32,5%3,5% 6,2% 7,6% 9,6% 9,4% 8,3% 8,0% 11,1%13,0%13,0%16,1% 18,7% 22,9%24,8%32,8%3,6% 7,7% 10,2%10,3%10,6% 11,3%11,8% 12,8%14,0%14,9%18,7% 20,6% 24,1%26,6%34,2%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
3,6%7,7%
10,2%10,3%
10,6%11,3%
11,8%12,8%
14,0%
14,9%
18,7%20,6%
24,1%
26,6%
34,2%Penetration of �xed broadband access
Jan-09Jan-10Jan-11
Thepenetrationofmobilebroadbandaccesswas10.4%,whichmadeanincreaseof4.9%comparedto2010(onlytheusersof data SIM cards were included).
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The following Figure presents broadband access penetration in the period 2007-2011.
Internet penetration
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
2007 2008 2009 2010 2011
2,6% 5,5% 8,5% 11,6% 13,3%
1,4% 3,4% 5,5% 10,4%
�xed
mobile
4.5. VoIP service market
In2011thefollowingoperatorsprovidedVoIPservices:• VoIPTelekom,• IPMont• MontenegroPostd.o.o.• VoIPd.o.o.• ProntoTeld.o.o.
ThenumberofVoIPTelekomsubscribersroseby20.3%comparedto2010,sothatattheendof2011,thisoperatorhad391subscribers.Thenumberofsoldvouchersfellby38.5%comparedto2010,andthisoperatorsold1,600vouchersin2011.Totalgeneratedoutgoingtrafficin2011increasedby12.9%comparedto2010,amountingto251,549minutes,andthetransittrafficdecreasedby7.5%comparedto2010andreached398,278minutes.VoIPTelekomincreasedthecapacityofinternetlink compared to 2010. The capacity was increased from 1Mb/s to 4 Mb/s.
IPMontprovidestheseservicesbytheserviceofcarrierselection.ThenumberofIPMontusersfellby4.2%andthenumberofactivevouchersby20.9%comparedto2010.Attheendof2011,IPMonthad1,124users.During20114,133voucherswereactivated.Thegeneratedtrafficamountedto315,216minutes,whichwasadropof22.9%comparedto2010.Outofthetotaltraffic,29%waswithSerbia,and70%withotherinternationaldestinations.Thecapacityofinternetlinkwasincreasedcompared to 2010 from 2Mb/s to 3Mb/s.
During2011MontenegroPostd.o.o.increasedthenumberofpublicpayphonesbywhichitprovidedVoIPservices.Thenumber of payphones increased from 12 in 2010 to 52 at the end of 2011. In 2011, Montenegro Post had 20 payphones in the territory of the municipality of Herceg Novi, 7 in the territory of the municipality of Tivat, 11 in the territory of the municipality of Budva, 9 in the territory of the municipality of Bar and 5 in the territory of the municipality of Kotor. The traffic generated in2011increasedfrom123%comparedto2010,andamountedto272,182minutes.Outofthetotaltraffic,31.3%waswithSerbia,and66.2%withotherinternationaldestinations.
VOIPd.o.o.providedservicesbypayphonesandthetotaltrafficgeneratedamountedto20,708minutes,whichmadeanincreaseof3.4%comparedto2010.Outofthetotaltraffic,13%waswithSerbia,and83%withotherinternationaldestinations.
ProntoTelprovidedVoIPservicesbypublicpayphones(2payphonesinBudvaandoneinRafailovićiandBečići)andthisoperator had two non-residential customers in Budva. The users of ProntoTel generated 81,048 minutes of traffic in 2011, whichmadeanincreaseof150%comparedto2010.Outofthetotaltraffic,8.1%waswithSerbiaand90.8%withotherinternational destinations.
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MNNewsprovidedwholesaleVoIPservicetoMontenegroPost,andthetotalnumberofconsumedminutesamountedto272,182.
During2011,usersgenerated940,713minutesoftrafficthroughVoIPoperators,whichmadeariseof16.6%comparedto2010.
TheFigurebelowgivesanoverviewofgeneratedVoIPtrafficperoperators.
VOIP TELEKOM
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
IPMONTMONTENEGRO
POST Pronto-TelVOIP
2008 385469 1628982009 437617 4677002010 222886 4090372011 251549 315226
158835101619122298272182
20007 3243620708 81048
VoIP tra�c in minutes
4.6. Market of leased lines
Leased lines are a very important public electronic communication service, particularly for non-residential customers. They are used to connect the locations of non-residential customers in one country or in several countries by leased lines of permanent capacity.
In addition, leased lines make a base for alternative operators who compete, directly or indirectly, with the incumbent operator.
At present, the operators of electronic communications listed below provide the service of leased lines in Montenegrin market:• CrnogorskiTelekoma.d,• M:Teld.o.o,• BroadcastingCenterd.o.o,• MNnewsd.o.o.i• Fibernetd.o.o.
Compared to 2010, Fibernet launched the service of leased lines during 2011. Fibernet and Crnogorski Telekom are the only operators which use optic fiber as a physical medium for transmission when providing the service of leased lines. That enables these operators to meet the needs for high-capacity leased lines, both within the country and in relation with other countries. Other operators (M:Tel, Broadcasting Center and MNnews) provide the service of leased lines by use of radio transmission system as a physical medium. Those radio transmission systems used by mentioned operators are limiting factors in providing high-capacity leased lines.
In the majority of European countries, operators that developed within power and railway companies have been significant competitors to the incumbent operator. In Montenegro, Montenegrin Power Transmission System has been registered as the
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operator of leased lines. That company has laid fiber optic cables and installed transmission devices, but has not launched the service of leased lines yet.
4.6.1. Prices of leased line serviceDuring 2011 there was no change in retail prices of leased lines with Crnogorski Telekom as the incumbent operator, which had the biggest market share in the segment of this service. In relation with the prices of leased line services, it should be noted that in November 2010 the Agency issued a decision on designation of Crnogorski Telekom as the operator with significant market power in the relevant market of terminating or trunk segments of leased lines – wholesale level. Concerning the prices of these services, the Agency imposed an obligation on Crnogorski Telekom, as an interim arrangement until the setting of cost-oriented prices, to implement maximum prices for some categories of terminating or trunk segments of leased lines, in compliance with the COMMISSION RECOMMENDATION of 29 March 2005 on the provision of leased lines in the European Union — Part 2 — pricing aspects of wholesale leased lines part circuits). Crnogorski Telekom implemented the mentioned prices in February 2011 by publishing the prices in Reference Wholesale Offer for terminating segment of leased lines. It should be noted here that Crnogorski Telekom implemented a different pricing methodology for this type of service (the price depends on leased capacity and radial distance of terminal points) from the one it had implemented up to then.
For the comparison of prices of leased lines services in neighbouring countries the data was used from REPORT 1 - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries, November 2011). This Report was prepared by consulting company Cullen International for the purposes of the European Commission. The comparative data shows annual fees for leased lines on the retail level, without VATandone-offfees.
The following Figure shows comparative prices for leased lines of the capacity of 2Mb/s , 2 km long.
Montenegro
Serbia
Kosovo
Croatia
Island
Macedonia
Turkey
B&H-bh
B&H-ts
Albania 0
2000
4000
6000
8000
10000
12000
14000
Euro Average EU27
Annual charge for a 2Mb/s leased line, 2km long EU27 average: € 6.192
B&H-ht
SOURCE: REPORT 1 - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries (November 2011)
From this Figure it can be concluded that the prices were lower in Montenegro than the prices of this service in the countries from the Region. It should also be noted that the price of this type of leased lines, which is 3,300 € in Montenegro, is lower than the average price of this type of leased lines in the EU Member States, where it amounts to 6,192 € .
The Figure below shows comparative prices for leased lines of the capacity of 34Mb/s, 2 km long.
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Montenegro
Serbia
Kosovo
Croatia
Island
Macedonia
Turkey
B&H-bh
B&H-ts
Albania
B&H-ht
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Euro Average EU27
Annual charge for a 3Mb/s leased line, 2km long EU average: € 33.900
SOURCE: REPORT 1 - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries (November 2011)
It can be concluded from this Figure that prices in the previous Figure in Montenegro are somewhat higher than the prices of this service in other countries of the Region. Also, it should be noted that the price of this type of leased lines, which is 39,600 € in Montenegro, exceeds the average price of this type of leased lines in the EU Member States, where it amounts to 33,900 €.
4.6.2. Market structureThe total number of leased lines in 2011 amounted to 603. This was the total number of leased lines which included national and international leased lines of all capacities. It also included the full number of leased lines on retail and wholesale levels.
The structure of leased lines in 2011 according to capacities is shown in the Figure below:
Structure of leased lines per capacity in 2011
<2 Mb/s= 47.76%2Mb/s i nx2Mb/s = 50.41%
34Mb/s=0.33%
140/155Mb/s = 0.50% Other capacities =1.00%
Comparedto2010,thenumberofleasedlinesroseby7.1%(in2010therewere563leasedlines).Inrelationwiththenumberofleasedlinesperspecifiedcapacities,itshouldbenotedthattheriseof18.5%wasrecordedinthenumberofleasedlineswith the capacity of <2Mb/s.
The total income from providing the service of leased lines in 2011 amounted to 3,163,698.04 €. This income included earnings from the services of national and international leased lines of all capacities, and the income from leased lines on retail and wholesalelevels.Comparedto2010,thetotalrevenuefromtheserviceofleasedlinesdroppedby12.25%(in2010,thetotalrevenue from this service amounted to 3,605,258.64 €).
The structure of income according to the capacities of leased lines in 2011 is shown in the following Figure.
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Structure of income per leased lines capacity in 2011
2Mb/s i nx2Mb/s34Mb/s = 3.69%
140/155Mb/s10.35%Other capacities = 6.04%
<2Mb/s=13.71%
4.7. Market of distribution of radio and television channels to end-users
Dynamic development of cable television in Montenegro started in January 2007 when the first licenses were officially awarded under an international tender. Montenegro was among the last countries in the Region to develop electronic communication networks which are primarily used for the service of distribution of radio and television programs up to end-users. In spite of that, there are at present four technological platforms in Montenegro on the basis of which cable television is being developed, such as:
1. classical cable technology, improved in the 1970es, based on DOSCIS standards, where coaxial cables are primarily used as a physical layer or transmission medium;
2. MMDS platform, which as a physical layer uses radio waves from the frequency bands of 11.7 MHz to 12.5 MHz, and which is based on the distribution of television and radio programs via a terrestrial system of transmitters and repeaters in the above mentioned frequency bands;
3. DTH(DirecttoHome)platform,whereradioandTVprogramsaredistributedoveroneormoresatellites;4. IPTVplatform,whichisbasedontheIPprotocol,whosestandardizationisstillbeingdeveloped,andwhich
uses copper and fiber optic cables on the physical layer.
In 2011, the services of radio and television distribution up to end-users in the territory of Montenegro were provided over 4 different technological platforms by the following operators:
1. Cabling d.o.o, classical cable technology CDS,2. Eltamont d.o.o, classical cable technology CDS,3. MediaNet d.o.o, classical cable technology,4. M-kabl d.o.o, classical cable technology,5. Broadband Montenegro d.o.o, MMDS platform,6. TotalTVMontenegrod.o.o,DTHplatform,and7. CrnogorskiTelekoma.d,IPTVplatform.
WithregardtotheserviceofdistributionofradioandTVprogramstoend-usersviasomeofthesefourtechnologies(CDS,MMDS,DTH,IPTV),wewouldliketopointoutthatCrnogorskiTelekomandTotalTVMontenegroareinplacethroughoutthe territory of this country, whereas other operators have local of regional character, i.e. they are developing their systems in the territory of one or more municipalities, like:
• BroadbandMontenegrointheterritoriesofthemunicipalitiesofBar,Berane,BijeloPolje,Budva,Cetinje,HercegNovi, Kotor, Nikšić, Plav, Podgorica, Tivat and Ulcinj;
• CablingintheterritoriesofthemunicipalityofBudva;• EltamontintheterritoriesofthemunicipalityofNikšić;• MediaNetintheterritoriesofthemunicipalitiesofBeraneandRožaje;• M-kabl in the territories of the municipalities of Bar, Bijelo Polje, Herceg Novi, Kotor, Pljevlja, Podgorica and
Tivat.
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ThenumberofconnectionsforthedistributionofradioandTVprogramsattheendof2011amountedto122,404.Thetablebelow shows the connections per platforms for the last 4 years:
Date/Platform CDS MMDS DTH IPTV Total
31.12.2008 16,383 18,867 35,073 17,531 87,854
31.12.2009 19,699 24,486 33,858 29,927 107,970
31.12.2010 16,092 20,109 34,339 41,189 111,729
31.12.2011 15,745 19,948 36,503 50,208 122,404
Overview of connections per platforms
The trend in the number of connections for the period 2008-2011 is given in the Figure below:
87.854
107.970111.729
122.404
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
31.12.2008. 31.12.2009. 31.12.2010. 31.12.2011.
Connection number
Trend in the number of connections
Market shares of individual platforms expressed in percentages:• CDS-12.86%,• MMDS–16.30%,• DTH–29.82%,• IPTV–41.02%.
Market share
DTH = 29,82% KDS = 12,86%
MMDS = 16,30%IPTV = 41,02%
Market shares of CDS/MMDS/IPTV/DTH operators in the total number of connections
Comparedtotheendof2010,thenumberofconnectionsforthedistributionofradioandTVprogramsviavariousplatforms(CDS/MMDS/IPTV/DTH)roseby10,675attheendof2011,whichaccountedfortheriseof9.55%.Intheperiodfromtheendof2008totheendof2011,thatnumberincreasedby34,550,i.e.39.33%.Byandlarge,theoperatorsthatlaunchedtheprovisionof this service to end-users have seen the increase in the number of connections, while the degree of penetration and dynamics has varied among operators. The largest rise has been recorded by Crnogorski Telekom, which provides services viaIPTVplatform,andcurrentlyholds41.02%ofthemarket.
Out of the total number of connections, 119,467 accounted for residential customers. According to the data from the Statistical Office of Montenegro (the 2011 Census – Source: Monstat „Census, households and flats in 2011“) the number of households in Montenegro amounted to 194,795. The average household in Montenegro had 3.2 members. Therefore, the penetration of cabletelevisioncomparedtothenumberofhouseholdsamountedto61.33%,i.e.382,300users.
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Penetration of cable TV in relation with number of households
DTH = 18,74%
IPTV = 25,78%
Households without KDS/MMDS/IPTV 37,16%
KDS = 8,08%
MMDS = 10,24%
Penetration of CDS/MMDS/IPTV/DTH platforms in relation with the number of households
Within the basic packet, the operators offer on average 61 channels (at least 35, and 100 at the most), at the average fee of 9.38 € (at least 8.00€, and 10.00€ at the most). The networks with coaxial cables are being digitalized and replaced by networks with fiber optic cables, which improves the quality of services and choice of new services.
4.8. Interconnection and operator access
2011 saw significant changes in the segment of interconnection and operator access in the sector of electronic communications in Montenegro. What should be particularly noted is the fulfillment of obligations imposed by the decisions on designation of significant market power in some relevant markets. Operators implemented the imposed regulatory remedies. They primarily published reference interconnection offers for specified relevant markets, implemented the prices established in the analyses of relevant markets, and brought the existing agreements on interconnection and operator access in compliance with new conditions for providing some services on wholesale level.
What should be particularly noted is the fact that the Agency, following the practice in the EU Member States has imposed on the SMP operators a new set of remedies on wholesale level. Among the most important ones on wholesale level are, inter alia: unbundling of the local loop (fully-unbundled or shared access), broadband access on wholesale level, carrier pre-selection and leased subscriber lines on wholesale level. The conditions for providing the stated services on wholesale level are specified in detail in corresponding reference interconnection offers of SMP operators. Reference interconnection offers for some services on wholesale level were published by SMP operators in February 2011. The Agency, in compliance with its responsibilities defined by the Law, made necessary amendments to the reference interconnections offers by its decisions, after public hearing had been published.
Besides new obligations imposed on SMP operators, the Agency also prescribed the price reduction for some wholesale services in accordance with the carried out analyses of relevant markets, which the operators implemented during 2011. In this context what should also be noted are price reductions for call termination on fixed and mobile networks, for the service of call origination in fixed network, for the services of terminating segments of leased lines and the lease of space in telecommunication cable ducts.
The imposed regulatory remedies will create necessary conditions for strengthening the competition in the market, both by enhancing the position of existing alternative operators and encouraging the entry of new operators to Montenegrin market.
4.8.1. Prices of interconnection services
Prices of calls terminating on fixed networks
2011 saw the change in the prices of call termination on fixed networks, which was due to the obligations arising from the Analysis of relevant market of calls terminating on individual public telephone networks, which are provided at a fixed location – wholesale level, which the Agency completed in 2010.
In all reference reports for the EU Member States and countries of the Region, the prices of calls terminating on the network of the incumbent operator are compared. In Montenegro, those prices were as follows:
• The price of national calls terminating on the fixed network of Crnogorski Telekom since 12. 02. 2011 amounted to 1.88 €cent/min, and at the end of 2011 it was 1.07 €cent/min, which made a drop in price of thisserviceof60.3%comparedtotheendof2010;
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• ThepriceofcallsterminatingwithinthenetworkcodeofaccesspointonfixednetworkofCrnogorskiTelekom since 12. 02. 2011 was 1.59 €cent/min, and at the end of 2011 it was 0.93 €cent/min, which was a dropinpriceofthisserviceof58.6%comparedtotheendof2010.
The price of calls terminating on the fixed network of M:Tel also changed in compliance with obligations arising from the Analysis of relevant market of calls terminating on individual public telephone networks, which are provided at a fixed location – wholesale level, and amounted to 2.81 €cent/min as of 12. 02. 2011 to reduce to 1.42 €cent/min at the end of 2011, whichwasadropinpriceof52.6%comparedtotheendof2010.Asitcanbeseenfromthestatedpricesofcalltermination,the Agency allowed the asymmetry of these prices in a limited period of time.
For the comparison of the prices of calls terminating on the fixed network with respective prices in the countries of the Region, the data used was from REPORT I - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries, November 2011). This Report was prepared by the consulting firm Cullen International for the purposes of the European Commission.
The Figures below show the prices of calls terminating on fixed network for the categories of local and single transit on the network of incumbent operator, for neighbouring countries (prices per minute, which was the average price of the first three minutes in peak-time). The Figures below also present an average weighted value of prices for local and single transit termination for the EU Member States, which amounted to 0.47 €cent/min and 0.68 €cent/min respectively (Source: Digital Agenda Scoreboard 2011- Electronic communications market indicators, May 2011).
€ ce
nt/m
in
0,52 0,41 0,73 0,61 1,24 0,89 0,71 4,00 0,930,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
Price of call termination on the network of �xed incumbent operator –local call termination EU average – 0.47€cent/min
Montenegro
SerbiaKosovo
CroatiaIsland
Macedonia
TurkeyB&H
Albania
Average EU27
SOURCE: REPORT 1 - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries (November 2011)
Montenegro
SerbiaKosovo
CroatiaIsland
Macedonia
TurkeyB&H
Albania
€ ce
nt/m
in
Price of call termination on the network of �xed incumbent operator –single transit call terminationEU average – 0.68 €cent/min
0,79 0,97 0,75 1,95 1,34 0,93 1,070,0
0,5
1,0
1,5
2,0
2,5
3,0
Prosjek EU27
SOURCE: Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries (November 2011)
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On the basis of previous Figures, it can be realized that the price level of calls terminating on the network of Crnogorski Telekom was somewhat above the average price of this service in neighbouring countries. The prices of these services were also higher than the average prices in the EU Member States. In this context it should be noted that the prices of the service of calls terminating on the network of Crnogorski Telekom were reduced in two steps during 2011, following the Analysis of relevant market and the Agency’s decision.
The Figure below shows the trend of prices of calls terminating on the fixed network of Crnogorski Telekom in the period since 2005:
Price of call termination on the network of �xed incumbent operator in Montenegro
€ ce
nt/m
in
2,25 2,25 2,251,59
0,93
6,1 6,1
3 2,7 2,7 2,7
1,88
1,07
0
1
2
3
4
5
6
7
2005 2006 2007 2008 2009 2010 Feb. 2011 Nov. 2011
Local Single transit
This Figure shows that the prices of calls terminating on the fixed network were considerably reduced in the reporting period. The total reduction of the prices of calls terminating on the fixed network of Crnogorski Telekom for single transit level from 2005totheendof2011amountedto82.4%.Besides,theReferenceInterconnectionOfferfrom2008enabledcallterminationon local level, which had not been offered by Crnogorski Telekom before.
The Figure below shows the trend of average prices of calls terminating on fixed networks in the EU.
€ ce
nt/m
in 0,61 0,62 0,56 0,540,48
0,47
0,94 0,940,8 0,81
0,70,68
1,391,25
1,11 1,13
0,860,8
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
October 2005 October 2006 October 2007 October 2008 October 2009 October 2010
local Single transit Double transitAverage prices of call termination on the network of �xed incumbent operator in the EU
Source: Digital Agenda Scoreboard 2011 - Electronic communications market indicators, May 2011
This Figure shows that the slight downward trend in the prices of all categories of calls terminating on fixed network continued.
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Prices of calls terminating on mobile networks
During 2011, there was a change in the price of calls terminating on mobile networks, in compliance with the provisions of the Analysis of relevant market of call termination on individual mobile networks – wholesale level, so that the price of this service amounted to 8.5 €cent/min as of 12. 02. 2011, whereas at the end of 2011, it amounted to 7.06€cent/min, which was adropof30%comparedtotheendof2010.Besides,thepricesofSMSandMMSterminationdidnotchangeduring2011,remaining 2.2 €cent/SMS and 6.6 €cent/MMS respectively.
For the comparison of these prices with the respective prices in neighbouring countries, the data used was taken from REPORT I - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries, November 2011). This Report was prepared by the consulting firm Cullen International for the purposes of the European Commission.
The following Figure shows comparative data for the prices of calls terminating on mobile networks of major operators (according to their income and number of customers, in case that asymmetric prices of call termination were implemented) in neighbouring countries (per-minute price, based on the first three minutes of a call in so-called peak-time). It should be noted in 4 neighbouring countries (Croatia, Macedonia, Turkey and Albania) implemented asymmetric prices of calls terminating on mobile networks, whereas in Montenegro symmetric prices of this services were applied. As shown by the Figure, the prices of this service charged by operators in Montenegro was above the level of prices of this service charged by majority of operators in the countries of the Region, as well as above the level of the price in the EU Member States, where it amounted to 5.46 €cent/min (Source: Digital Agenda Scoreboard 2011- Electronic communications market indicators, May 2011).
Price of call termination on the networks of mobile operators EU average: 5.46 €cent/min
Montenegro
SerbiaKosovo
CroatiaIsla
nd
Macedonia
TurkeyB&H
Albania
5,32 3,33 5,04 1,37 5,48 9,20 4,80 6,30 7,060,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
10,00
Average EU27
€ c
enti/
min
SOURCE: REPORT I - Supply of services in monitoring regulatory and market developments for electronic communications and information society services in Enlargement Countries (November 2011)
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The Figure below shows the trend in the prices of calls terminating on mobile networks in Montenegro in the period from 2005.
Price of call termination on mobile networks in Montenegro
14 14
108,5
7,06
3 3
10 10 10
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 Feb. 2011 Nov. 2011
€ ce
nti/m
inMT for calls from �xed network MT for calls from mobile network
As the Figure shows, the price of calls terminating on mobile networks in Montenegro varied depending on whether a call originated on fixed or mobile network. That reason, that was discriminatory, was eliminated in 2007, since when the same price has been charged for calls terminating on mobile networks in Montenegro, regardless of the network in the country where a call originated.
Downward trend in the prices of calls terminating on mobile networks in the EU Member Stated continued, which is illustrated by the following Figure:
€ ce
nti/m
in
12,6511,01
9,67
8,23
6,585,46
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010
Average price of call termination on mobile networks in EU
Source: Digital Agenda Scoreboard 2011- Electronic communications market indicators, May 2011
The average price of calls terminating on mobile operators’ networks in the EU Member States continued its downward trend, whichisillustratedbytheFigure,anditdroppedby17%comparedtopreviousyear,whereasinMontenegroitrecordedafallof30%.However,therewerestillbigdifferencesinthepricesoftheseservicesamongMemberStates,from1.84€cent/min in Cyprus to 8.53 €cent/min in Luxembourg. In spite of the fact that the prices of calls terminating on mobile networks have had a steady downward trend, they are still much higher than the prices of calls terminating on fixed networks. In the EU Member States, regulatory measures are reducing these prices effectively through the “glide-path” mechanism.
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4.8.2. Market of call termination
Market of calls terminating on fixed networks
The total volume of traffic terminating on fixed networks in Montenegro in 2011 amounted to 76,006,083 minutes, which accountedforafallof12.29%comparedto2010.Thefallwasrecordedinthecategoryofnationalcalltermination(adropby10.5%comparedto2010),aswellasinthecategoryofinternationalcalltermination(adropby11.6%comparedto2010).The structure of call termination is shown in the Figure below:
Structure of calls terminating on �xed networks in 2011
International calls 87% National calls 13%
The income from calls terminating on operators’ fixed networks in Montenegro in 2011 amounted to 4,970,354 €, which accountedforthefallof17.45%comparedto2010.Abiggerfallwasrecordedintheincomefromnationalcalltermination(adropby30.44%comparedto2010),thaninthecategoryoftheincomefrominternationalcalltermination(adropby16.6%compared to 2010). The income structure of call termination is shown in the Figure below:
International calls 94.8% National calls 5.2%
Income structure of call termination in 2011
Market of calls terminating on mobile networks
The total volume of traffic terminating on mobile networks in Montenegro in 2011 amounted to 372,021,514 minutes, which accountedforafallof3.74%comparedto2010.Thefallwasrecordedinthecategoryofnationalcalltermination(adropby6.84%comparedto2010),whilethetotalvolumeofinternationalcallterminationincreased(theincreaseof3.23%comparedto 2010). The structure of call termination is shown in the following Figure:
International calls 33% National calls 67%
Structure of calls terminating on mobile networks in 2011
The income from calls terminating on mobile networks of Montenegrin operators in 2011 amounted to 36,547,121 €, which wasadecreaseof15.36%comparedto2010.Asignificantlygreaterdecreaseoccurredinthecategoryofincomefromnationalcalltermination(adropof21.9%comparedto2010),thaninthecategoryofinternationalcalltermination(adropof4.47%compared to 2010). The structure of income from call termination is shown in the Figure below:
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International calls 42.4% National calls 57.6%
Income structure of call terminating on mobile networks in 2011
4.9. Joint use of electronic communication infrastructure
The joint use of electronic communication infrastructure is regulated for the purpose of more rational use of space, protection of the environment and public health, public safety or urban planning, and to ensure to the greatest extent the availability of quality joint use of electronic communication infrastructure. Public operators shall, when constructing and utilizing communications networks, undertake all reasonable measures that enable availability and quality joint use of electronic communication infrastructure.
The joint use of electronic communications infrastructure is, in addition to the provisions of the Law on Electronic Communications, also regulated by:
• TheRulebookonthescopeandwayofthedeliveryofdatarelatedthecapacitiesofelectroniccommunicationinfrastructure which are of interest for joint use („Official Gazette of Montenegro“, No 79/09),
• Decisionontheformsofdocumentstobedeliveredbyoperatorsaboutthecapacitiesofelectroniccommunication infrastructure which are of interest for joint use („Official Gazette of Montenegro“, No 23/10).
Pursuant to the provision of the Law, operators shall deliver updated information about their capacities which are of interest for joint use of electronic communication infrastructure. The data which is of interest for the joint use refers to ownership over facilities, the type of facility (cable ducts, antenna masts and buildings), geographical location, technical characteristics of facility, the type of equipment and the owner of the equipment in the facility. The Agency collects data on electronic communication infrastructure which is of interest for the joint use, and updates the specified database.
At the end of 2011 cable ducts of Crnogorski Telekom were used by 3 operators (M-kabl, Fibernet and IPMont) in the territory of the municipalities of Podgorica, Bijelo Polje, Herceg Novi, Tivat, Kotor and Pljevlja, with the total length of 25 km.
The joint use of electronic communication infrastructure is mostly present on antenna masts. At the end of 2011, there were 448 antenna masts in operation in the territory of Montenegro, out of which 108 were owned by Crnogorski Telekom, 99 by Telenor, 100 by M:Tel and 141 by the Broadcasting Center.
CT
Telenor
Mtel
RDC
CT10824%
Telenor99
22%
RDC14132%
Mtel10022%
Figure 1: Operator share in the ownership over the total number of antenna masts
Thejointuseofspaceonantennamastsispresenton177(39.5%)antennamasts,outofwhich109belongtotheBroadcastingCenter, 34 to Telenor, 25 to Crnogorski Telekom and 9 to M:Tel, which is illustrated by the following Figure,
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CT
Telenor
Mtel
RDC
RDC10962%
CT25
14%
Telenor34
19%
MTEL9
5%
Figure 2: Operator share in leasing space on antenna masts to other operators
CrnogorskiTelekomleasesspaceonits25antennamasts(23%),anduses109antennamasts(50%)ofotheroperatorsforproviding its services.
Telenorleasesspaceonits34antennamasts(34%),anduses88antennamasts(47%)ofotheroperatorsforprovidingitsservices.
M:Telleasesspaceonits9antennamasts(9%),anduses104antennamasts(51%)ofotheroperatorsforprovidingitsservices.
TheBroadcastingCenterleasesspaceonits109antennamasts(77%),usingonlyitsownfacilitiesforitsoperations.
CrnogorskiTelekom,TelenorandM:Telarejointlypresentat49sites,whichaccountsforabout11%ofthetotalnumberofsites.
Thespacein138offacilities-buildings(39.5%)isjointlyusedbyseveraloperators,outofwhich75areownedbytheBroadcastingcenter, 36 by Telenor, 27 by Crnogorski Telekom and 1 by M:Tel.
CT
Telenor
Mtel
RDC
RDC75
54%
Telenor36
26%
CT27
19%
Mtel1
1%
Figure 3: Operator share in leasing space to other operators in facilities-buildings
Operators made the conditions for the joint use of electronic communication infrastructure available to the public in the following way:
• theBroadcastingcenter:throughtheRulebookongeneralconditionsfortheprovisionofservicesoftheBroadcasting Center d.o.o. and Price List of services of the Broadcasting Center d.o.o., which are placed on their official site;
• CrnogorskiTelekom:theproceduresforgainingrightsofuse,pricingandconditionsfortheuseofcableducts and space in facilities are defined in reference offers, in particular in Articles 11 and 13 of the Reference Offer for access to bundled local loop of Crnogorski Telekom, and in Article 27 and Annex II, sub-paragraph 11 of the Reference Interconnection Offer for fixed network of Crnogorski Telekom. The reference offers are published on the website of Crnogorski Telekom.
The joint use of electronic communication infrastructure is normally agreed by operators without the involvement of the Agency.
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5. PLANED AND COMPLETED ACTIVITIES OF THE AGENCY IN 2011
5.1. Administrative procedures
5.1.1. Exercise of user rights and user protectionThe protection of the public communication service users is defined by the Law on Electronic Communications. The user of public communication services is entitled to:
• have access to public electronic communication network in the period of eight days after the submission of the request, if it is technically feasible,
• usetheservicesofelectroniccommunicationsofpubliclyspecifiedquality,availabilityandsafety,• haveadetaileditemizedbillwiththepricesofelectroniccommunicationservices,intheformthatallows
the control of consumption,• theprotectionofsecrecyofelectroniccommunications,exceptinsituationsstipulatedbythelaw,• enjoy rights arising from other laws which regulate the issues of user protection, unless otherwise regulated
by this law.
A subscriber submits to the operator an objection concerning the access and quality of services immediately upon identifying such circumstances, while a subscriber shall submit the objection to a bill 8 days from the reception thereof, in writing. An operator shall decide about the objection within 8 days from the day of its receipt and make a decision in writing.
If an operator rejects the objection or does not make a decision within eight days from the day of the receipt of the objection, the user has the right to, within the following 15 days, submit the complaint to the Agency for Electronic Communications and Postal Services, which shall make the decision on the complaint within 15 days.
The complaint about the Agency’s decision may be submitted to the Ministry for Information Society and Telecommunications within 15 days from the day of receipt of the decision.
During 2011, the users of public communication services submitted 176 complaints about the decisions of operators under the users’ objections. The Table below presents the total number of user complaints and the way of their resolution per municipality.
MUNICIPALITY ACCEPTED REJECTED RESOLVEDDIFFERENTLY -ANSWERED
CONCLUSION ON SUSPENSION OF THE PROCEDURE
TOTAL IN 2011
Podgorica 29 35 12 5 81Nikšić 6 3 4 - 13Cetinje 1 1 - 1 3Herceg Novi 5 12 4 - 21Bijelo Polje 2 3 1 1 7Bar 2 9 1 - 12Danilovgrad 3 6 - - 9Budva 4 1 - - 5Kotor 2 5 1 - 8Berane 2 1 - - 3Tivat - 3 1 - 4Rožaje 2 - - - 2Pljevlja 1 - - - 1
Speaking of complaints about decisions of the Agency’s Council related to the protection of public communication service users, there were 28 such complaints in 2011.
• Outofthetotalnumberofcomplaints,sixweresubmittedbynon-residentialcustomersand15byresidentialcustomers – users. Also, complaints were submitted by operators. Thus Crnogorski Telekom filed five complaints about the Agency’s decisions, and Telenor two.
• 17complaintswereacceptedbytheMinistry’sdecisions.
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• TheMinistryacceptedeightusercomplaints,revoked the Agency’ decisions and ordered the Agency to conduct a hearing of the complaining party in a repeated procedure. In this repeated procedure, four Agency’s decisions were confirmed, while for other four complaints different (adopting) decisions were taken.
• Uponusers’complaintsandattheMinistry’srequest, the documentation for three cases was submitted, pending decision.
In cooperation with the Ministry for Information Society and Telecommunications, a form was drawn up for identification of irregularities and with measures taken by the Agency’s supervision service, in accordance with the Law on Electronic Communications and the Report on other data regarding users’ complaints. The performance of these activities is defined in the Action Plan for the implementation of the National Program for User Protection 2010 - 2012, which was adopted by the Government of Montenegro. Thus, the Agency since June 2011, delivered by the 15th day of the month the data for each month, in addition to action taken by the supervisory service of the Agency, the data about the received number of user complaints about operators’ decisions, as well as the data about the number of decisions taken on complaints.
In 2011, the Agency in collaboration with a NGO „Ecom“ from Podgorica and for the purpose of informing users, printed a brochure “Guidelines for electronic communication service users” in order to inform them how to become users of electronic communication services, what they should pay attention to when signing a contract, and also to inform them about the rights of electronic communication service users, and what user protection procedure is prescribed by the Law on Electronic Communications. The brochure was distributed through printed media in 60,000 copies. On the Agency website, in the section of „User protection“, the ability is given to interested users to make questions about their rights and right protection in the area of electronic communications.
With regard to the practice of some operators to retain in permanent possession the photocopies of subscribers’ identity documents when establishing a subscriber relationship, the Agency acted upon complaints of users submitted to the Agency for the protection of personal data according to the Law on the protection of personal data („Official Gazette of Montenegro“, No 79/08 and 70/09), and carried out an analysis of
subscriber contracts on which it had already given its approval, after which it ordered operators to delete from their contracts and General Conditions for the Use of Services the provisions concerning „retention in permanent possession photocopies of documents“.
In accordance with the implementation of Article 113 of the Law on Electronic Communications, which stipulates that operators that provide public communication services shall be obliged to issue to the users an itemized bill, unbundled to the extent that enables easy overview of all items and verification of the calculation of the amount, the Agency carried out several activities which resulted in issuing a decision, by which it ordered to Crnogorski Telekom A.D. Podgorica, to delete from the Price List of Services the items „the costs of subsequent payment for the use of TT services for covering the costs for crediting TT services,forwhich1%ofamonthlyamountofcreditcalculationis charged”. Consequently, Crnogorski Telekom harmonized users’ monthly bills and deleted that item from the bills for 2011.
The Agency also ordered the operators to comply itemized bills for mobile services with Article 113 of the Law, as they did not contain the data on the number of calls, duration of calls, number of calculation units, unit price of calculation units separately by call types, which operators implemented in bills for December 2011.
Concerning the obligation from Article 102 of the Law on Electronic Communications, which refers to giving approval on standard subscriber contracts by the Agency’s Council, in the same period the approvals were given on subscriber contracts with the following operators:1. Crnogorski Telekom A.D. – Contract on subscriber
relationship (for non-residential and residential customers), whose integral parts are: Offer for the establishment of the subscriber relationship for PSTN, rural and ISDN telecommunication connection; General conditions for the use of ADSL service; Offer for the use of the service of fast Internet access by use of ADSL technology (non-residential customers); General conditions for the use of Extra TVservice;OfferfortheestablishmentofsubscriberrelationshipforExtraTV(StartandMinipackages).
2. M:Tel d.o.o. Podgorica – Contract on the service of data communication by leasing a local – long-distance line E1-2 Mbps and Contract on the provision of the service of a leased line of the capacity of __ Mbps .
3. Telenor d.o.o. Podgorica - Contract on the provision of services from the scope of the Universal Service.
4. Cabling d.o.o. Budva – Contract on mutual rights and obligations related to the provision of cable TV.
5. M Kabl d.o.o. Podgorica – Annex to the Contract on the establishment of the customer relationship fortheserviceofdistributionofTVchannelsandInternet.
6. Broadcasting Center d.o.o. Podgorica – General contract on service provision.
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5.1.2. Administrative procedures at the requests of entities in the market of electronic communications and resolution of disputes among those entities
The Law on Electronic Communications defines, inter alia, that the Agency shall settle disputes arising among entities in the market of electronic communications, in collaboration with institutions in charge of the protection of competition and user protection.
The Law also stipulates that the Agency decides on the rights and obligations of operators which provide electronic communication services and/or ensure electronic communication networks, in the period of 30 (thirty) days from the day when the request was submitted, and that the procedure before the Agency will be subject to the provisions of the law regulating general administrative procedure unless, otherwise stipulated by the Law on Electronic Communications.
An appeal against the Agency’s decision can be filed with the Ministry for Information Society and Telecommunications within 15 days from the day of the decision receipt. The procedure under an operator’s appeal against the Agency’s decision is worked out by the provisions of the Law on general administrative procedure („Official Gazette of Montenegro“, No 60/03 and 32/11).
The Law on Electronic Communications also determines that in case of a dispute between operators that provide electronic communication networks and services, they may agree in writing or the Agency may propose that the dispute is resolved by application of the rules of mediation or arbitration procedure if it would contribute to better and more timely resolution of the dispute, for the purpose of efficient competition, market development and protection of the user interests. It is also laid down that if the Agency proposes the mechanism of mediation, it shall notify the parties to the dispute without delay.
To this end, the Agency is trying to act in a preventive manner as early as in a negotiation process, particularly among operators, as appropriate, and within the scope of its competences related to their requests, and the Agency will act in any case if the negotiation process has failed, by taking necessary decisions/orders on the joint use of telecommunication infrastructure, the use of specified services, negotiations about access and interconnection, etc.
In 2011, there were no disputes before the Agency between operators which provided electronic communication networks or services.
VoIPTelekomd.o.o.hadsomeinitiativesforresolvingadisputewith Crnogorski Telekom A.D. and Telenor d.o.o., to which initiativetheAgencyresponded.However,VoIPTelekomd.o.o.was not interested in solving the problem in the way that the Agency considered legal and appropriate, so gave up its requests to the Agency.
Crnogorski Telekom A.D. was ordered by the Decision No 0102-1781/4 of 08. 07. 2011 to bring its RIO for fixed network in compliance with the requirements from the Decision.
The approval was given to the “RIO of Crnogorski Telekom for operators of IP-based services of electronic communications”.
Two decisions about regulatory fees for 2011 were made for all operators. The Broadcasting Center d.o.o. and Telenor d.o.o. complained about the respective decisions. The Agency passed new decisions in a repeated procedure, which are at the moment in the appeal procedure before the relevant Ministry.
21 motions for enforcement were filed, whereas 50 motions for enforcement filed against broadcasters to the Commercial Court in Podgorica were withdrawn.
Five decisions were made by which seven operators were designated as operators with significant market power.
5.2. Development of regulation in the area of electronic communications and postal services
The Work Program and Financial Plan of the Agency for 2011 were adopted on 22.12.2010 at the session of Montenegrin Parliament. The Operational Plan for carrying out the Agency’s 2011 Work Program envisaged, inter alia, the adoption of secondary legislation from the scope of the Agency’s competences, and the preparation of inputs for a part of secondary legislation to be adopted by the relevant Ministry and the Government of Montenegro.
In the text to follow, there is a list of secondary legislation adopted by the Ministry for Information Society and Telecommunications, based on inputs prepared by the Agency:1. Rulebook on radio frequencies and conditions under
which radio frequencies can be used without authorization (“Official Gazette of Montenegro”, No 11/11),
2. Rulebook amending the Rulebook on the manner of registration of users of public communication network services (“Official Gazette of Montenegro”, No 24/11)
3. Rulebook amending the Rulebook on the manner of determination of electronic communication network elements and associated facilities, widths of protection zones and the types of radio corridors in whose zone the construction of other facilities is not permitted (“Official Gazette of Montenegro”, No 61/11)
The Agency adopted and published the following regulations:1. Rulebook on the Universal Service tariffs and packages
for users with low income and disabled users (“Official Gazette of Montenegro”, No 14/11),
2. Rulebook on the regulation of retail prices for electronic communication services, which are provided over public fixed telephone networks (“Official Gazette of Montenegro”, No 52/11),
3. Decision on relevant service markets subject to verification by the application of Three-Criteria Test (“Official Gazette of Montenegro” No 19/11),
4. Decision amending Radio Frequency Allotment Plan in Montenegro (“Official Gazette of Montenegro” No 23/11),
5. Decision on the requirements for the use of radio frequencies from the bands of 1710-1785/1805-1880 MHz for the provision of MCA service (not published in the Official Gazette, but it was adopted on 02. 02. 2011),
6. Radio Frequency Allotment Plan for digital terrestrial broadcasting (“Official Gazette of Montenegro” No 55/11).
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Law on Digital Broadcasting During 2011, the representatives of the Agency were actively involved in the preparation of the Law on Digital Broadcasting within a Working Group formed by the Ministry for Information Society and Telecommunications. This Law has envisaged that the process of a switchover from analog to digital broadcasting ofTVprogramsinMontenegroistobecompletedby31.12.2012 and that the parallel broadcasting of television programs in analog and digital technologies is to start no later than 01. 07. 2012. The Law was adopted by Montenegrin Parliament in the beginning of July 2011, and was published in the “Official Gazette of Montenegro, No 34/11“.
Law on Postal ServicesMontenegrin Parliament adopted at its fifth meeting of its second regular session in 2011 the Law on Postal Services, which was published in the “Official Gazette of Montenegro” No 57/11.
The Draft Law on Postal Services had previously been prepared by a working group, formed by the Ministry for Information Society and Telecommunications, in whose work, in addition to the representatives of the Ministry and Montenegro Post, the representatives of the Agency actively participated.
This Law regulates the conditions and the manner of performing universal and other postal services, as well as other issues which are important for providing postal services. The Law on Postal Services reduced to some extent the competences of the Government and Ministry in relation with previous legal arrangements, and increased the competencies of the Agency as an independent authority in the market of postal services.
In compliance with the competences of the Agency for Electronic Communications and Postal Services, which are defined by Article 65 of the Law on Postal Services, the Agency shall within the period of one year following the day of entry into force of this Law, adopt a number of specified regulations and enactments, and prepare inputs for the development of regulations and provisions to be adopted by the Ministry.
5.3. Implementation of the project on central administrative database of ported numbers and provision of the service of number portability
Number portability is a service which allows each subscriber to keep his/her number when changing the operator. A number can be ported from fixed to fixed network, and from mobile to mobile network. The procedure for implementation and provision of the service of number portability is defined by the Law on Electronic Communications and Postal Services and the Rulebook on number portability.After the adoption of the Rulebook on number portability, the Agency started preparations for a tender for the selection of the most favourable bid for the administration of central database system of ported numbers, while operators were busy adapting their networks, according to Article 98 of the Law, or Article 3 of the relevant Rulebook.
In December 2010, the Council of the Agency made a Decision on initiation and implementation of the process of public procurement. On 27 December, the Agency published a call No15/2010 for an open procedure for public procurement and for the most favourable bid for central administrative database of ported numbers (SCBPB). This procedure of public procurement was not conducted by the end, as after an appeal of the company „Broadcom S.A.“ from Luxembourg, the Commission for control of the procurement procedure decided on 18 February 2011 that this appeal was to be adopted, so that the procedure of public procurement had to be cancelled.The Agency, according to the conclusions from the decision of the Commission for the control of public procurement, made an amendment to the public procurement plan for 2011, adding the item of the service of the central database administration system for ported numbers and obtained a prior approval for the implementation of preliminary agreement in order to create conditions for a repeated tender. After this, the Council of the Agency made a decision for the initiation and implementation of the procedure for public procurement of the service of central database administration related to ported numbers. The Agency published a public call No 02/2011 on 10. 03. 2011. Public bid opening was held on 06. 04. 2011. Following the public call, four bids were submitted by the bidders listed below:1. A group of bidders Asseco SEE d.o.o. Belgrade, Serbia and
Next NP ApS Copenhagen Denmark,2. Teletech d.o.o. Maribor, Slovenia,3. Joint bid of GISData d.o.o. Belgrade, GISData d.o.o. Zagreb,
GISData d.o.o. Podgorica, Beltiston d.o.o. Zagreb, Alatel d.o.o. Podgorica and E-smart system d.o.o. Belgrade,
4. Consortioum Telelink d.o.o. Podgorica, Montenegro and Kapsch Zagreb.
The Commission for bid opening and evaluation made a report about the public procurement procedure on 21 April, in which it proposed that the contract for the subject procurement be awarded to the company Teletech from Slovenia, which was also the same bidder which had submitted a valid bid. In the meeting of the Agency’s Council held on 5 May 2011 a Decision was made about the contract award. The contract signing was delayed as Belgrade company Asseco SEE d.o.o. submitted a complaint about the procedure of this public procurement on 18. 05. 2011, pointing out:
• thatthebidoftheGroupofbiddersAssecoSEEd.o.o., Belgrade and Next NP ApS Copenhagen was arbitrarily designated as invalid;
• thatthebidofTeletechd.o.o.Maribor,Sloveniawas invalid, and
• thattheprovisionsoftheLawonPublicProcurementwere violated, as the price of the accepted bid was higher than the estimated value of the procurement.
Acting upon the complaint, the Agency made a Decision by which the complaint was rejected as fully ungrounded. The Company ASSeco SEE d.o.o. Belgrade submitted the complaint to the Commission for the control of public procurement, whose conclusion drawn on 17. 06. 2011 was that this complaint was to be rejected. Thus the procedure under the public call No 02/2011 was completed and on the same day the Contract for implementation of the central database system of ported numbers and for the service of administration for the period
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of four years was signed.
The administrator of the central database of ported number, Teletech d.o.o., in compliance with the tender documents and submitted bid, installed servers and communication equipment on primary and secondary locations in Podgorica and Bijelo Polje, completed the development of software and internal testing of the systems. Within the process of implementation of number portability service, Teletech d.o.o. gave operators and the Agency the training for the use of central database system for ported numbers (SCBPB).Meanwhile, the Agency made a decision on setting a one-off fee for the service of number portability and the manner of the division of fees among the operator receiving the number and the operator giving the number.After the adjustment of operators’ networks, trial operation and testing of the system of number portability in the real environment had been completed, the operators started to enter the requests for number porting in the Central database on 1 December 2011 and on that very day 150 requests were entered. Porting of these numbers was implemented in compliance with the defined procedure from the Rulebook, which marked the successful implementation of the service of telephone numbers portability in Montenegro.By the end of the year, 320 telephone numbers were ported in mobile networks. There were no requests for porting numbers among fixed networks. 159 numbers were ported to T-Mobile network, out of which 119 from Telenor and 40 from M:Tel. 103 numbers were ported to M:Tel network, i.e. 69 from Telenor and 34 from T-Mobile. 58 numbers were ported to Telenor network, i.e. 22 from T-Mobile and 36 from M:Tel. In the indicated period, the system of central database of ported numbers functioned satisfactorily, with full availability and with no faults in its operation.
5.4. Monitoring of radio-frequency spectrum
According to the Law on Electronic Communications, the Agency for Electronic Communications and Postal Services shall manage, supervise and control the use of radio frequency spectrum (hereinafter called: RF spectrum) in the territory of Montenegro, in compliance with the Radio Frequency Allocation Plan and Radio Frequency Allotment Plan. Accordingly, the Agency shall plan, design, establish and maintain RF spectrum
monitoring system, and shall, along with other authorized state bodies and in line with international regulations which are applied in Montenegro, ensure efficient and undisturbed use of this natural resource, which represents the property of general interest whose holder of property rights and responsibilities is Montenegro
Basically, the purpose of the RF spectrum control and monitoring is to provide support to RF spectrum management, including, inter alia, the assignment of radio frequencies and planning the use of RF spectrum. Monitoring organized in that way means “eyes and ears” of RF spectrum management, as the practice has shown that the authorized use of radio frequencies does not necessarily mean that they are properly utilized.
The basic tasks in the RF spectrum monitoring were:• controlandmeasurementoftechnicaland
operating parameters of radio emissions;• participationinsolvingtheproblemsofharmful
interferences;• detection, identificationandpositioningof
unauthorized radio emissions;• controlandmeasurementofparametersforthe
quality of radio-communication services;• identificationofoccupancyofspecifiedchannels
and RF bands, with generating frequency recordings;
• support incoordinationoftheuseofradiofrequencies with administrations of neighbouring countries;
• participationininternationalprograms(campaigns)for the RF spectrum control and monitoring.
During 2011, the RF spectrum control and monitoring in the territory of Montenegro was carried out according to the possibilities of control-measuring equipment and software. The majority of these activities were performed by use of mobile control-measuring station (hereinafter called MKMS), in conformity with the 2011 Plan for regular RF spectrum control and monitoring, and Guidelines on the requirements and procedure for the use of MKMS. The activities established by the Plan for regular RF spectrum control and monitoring in 2011 were completed in full. 2011 saw the largest number of visits to the fields and therefore the largest scope of regular control and monitoring of RF spectrum since 2006, when the Agency started performing these activities.
RF spectrum control and monitoring ac t iv it ies (b oth regular and extraordinary) in 2011 were also carried out from the Regional control-measuring center Crni Rt in the municipality of Bar (hereinafter called RKMC) and from the Remote-controlled control measuring center Crljenice in the municipality of Pljevlja (hereinafter called DUKMS Pljevlja). Basic tasks during 2011 referred to:
• identificationofunauthorizeduseofRFspectrum,with a special emphasis on the control of spurious emissions and identification of interferences in bands allocated for the needs of air transport and maritime navigation;
• identificationofoccupancyofspecifiedRFbands;
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• controlofunknownemissionsandidentificationof interferences in some RF bands;
• measuringandcontrolofoperatingparametersforlocalFMandTVbroadcastingemissions;
• measuringandcontrolofoperatingparametersof local authorized emissions of functional radio networks;
• extraordinarycontrolsandmonitoringactivitiesperformed at the request of the Agency or holders of authorizations for the use of frequencies.
Based on the RF spectrum control and monitoring activities performed from RKMC, DUKMS Pljevlja and MKMS, some carried-out activities referred to:
• preparationofreportsoncarried-outcontrol,regular or extraordinary controls, and RF spectrum monitoring;
• preparationandsendingletters–warningstoallauthorization holders in which irregularities in operation were noticed or non-compliance with terms stipulated by authorizations;
• keepingevidenceinelectronicformatonestablishedfaults with some users of RF spectrum, to which letters of warning were sent.
As it is known, besides MKMS, which has been in operation since 2006 and RKMC, which has been in operation since the end of 2008, DUKMS Pljevlja has also been in operation from mid-2010. In mid-2011, this station became remote-controllable after having been properly connected with telecommunications, so it has been made possible since then to control and perform measurements from the Agency premises, and since the end of the year, it has also been possible to do the same from the Main control-measuring center on Dajbabska Gora in Podgorica (hereinafter referred to as GKMC).By the control-measuring equipment available to the Agency it was possible to carry out control and measuring of RF spectrum in the frequency bands of 9 kHz to 3 GHz, in compliance with relevant ITU-R SM Recommendation. The major part of the equipment consists of ESMB – a measuring monitoring receiver intended for the reception of emissions in the above-mentioned frequency bands. In addition to this receiver, an identical antenna system has been installed in all control-measuring stations, comprising five antennas, out of which three are omnidirectional, and two are directional. Antenna system has been installed on corresponding antenna system, according to relevant ITU-R SM Recommendation. In RKMC Crni Rt there is a steel lattice antenna mast 30 m high; in DUKMS Pljevlja there is a steel lattice antenna mast
10 meters high, while MKMS is equipped with a pneumatic antenna mast which can be raised to the height of 10 meters above the ground surface, also in compliance with relevant ITU-R SM Recommendation.
Dedicated software ROHDE & SCHWARZ Argus version 5.2.2 SP2 was used for the needs of RF spectrum control and monitoring, which was installed in all control-measuring stations. This software, in addition to managing the control-measuring equipment installed in the mentioned stations, also allows all measuring results to be stored in a numerical form, while the same results are presented in graphical form in reports.
Regular RF spectrum control and monitoring by use of MKMS in 2011 included 37 micro-locations in19 Montenegrin municipalities, except for the municipality of Bar, which was controlled from RKMC and municipality of Pljevlja, controlled from DUKMS-Pljevlja. Micro-locations for the use of MKMS were selected according to the experience gained in the previous period, making sure that in each of 19 municipalities cyclical monitoring was carried out twice a year by use of MKMS.
Concerning the use of MKMS, the campaign of regular RF spectrum control and monitoring in 2011 included the total of 76 visits to the fields, which took about 714 working hours. The table below shows the use of MKMS in 2011.
Municipality Number of daily MKMS visitsAndrijevica 2Berane 5Bijelo Polje 5Budva 4Danilovgrad 2Žabljak 2Kolašin 4Kotor 4Mojkovac 2Nikšić 9Plav 3Plužine 2Podgorica 12Rožaje 4Tivat 4Ulcinj 5Herceg Novi 2Cetinje 3Šavnik 2
To sum up, this regime of MKMS use can be included in the category of very intensive use of the station. During 2011 three extraordinary RF spectrum controls and monitoring were performed from two RKMCs (on 08. 03., and on 28. 04. 2011), while one was performed by use of MKMS.
Carrying out tasks within RKMC meant that employees from Podgorica had to leave Podgorica and go to RKMC in order to perform planned tasks. At the end of 2011 it was made possible to perform a remote control of equipment and software for RF control and monitoring on the facility of RKMC was performed from GKMC. In that way, this facility was, in spite of with occasional problems in communication, became available for carrying out regular activities, so that the second cycle of RF spectrum monitoring and control at RKMC was performed by remote control from GKMC.
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After regular and extraordinary controls and monitoring of RF spectrum had been completed, detailed reports were made for each micro-location separately (including fixed stations of RKMC and DUKMS Pljevlja), i.e. 58 (fifty-eight) reports a l t o g e t h e r. T h e o b s e r v e d irregularities were stated in the reports, supplied with corresponding graphs of received emissions in
specified frequencies (channels) and in specified frequency bands. The reports for MKMS contained the photos of micro-locations in which RF spectrum control and monitoring were performed. Tables (numerical) of the results of those measurements which accompanied the enclosed graphs, which were not included in the report due to their scope, are stored in the electronic form in a specific format of the above mentioned dedicated software for RF spectrum monitoring – Argus. Also, all results of measurement can be exported from Argus to Microsoft Excel format.
After the analysis of measurement results collected in the process of RF spectrum control and measurement in 2011, the Agency sent 225 letters – warnings to authorization holders (which are here presented per municipality): Andrijevica – 2, Bar – 20, Berane – 13, Bijelo Polje – 13, Budva – 16, Danilovgrad - 3, Žabljak - 6, Kolašin - 10, Kotor - 16, Mojkovac - 7, Nikšić - 16, Plav – 8, Pljevlja – 5, Plužine - 5, Podgorica – 30, Rožaje – 8, Tivat – 17, Ulcinj - 15, Herceg Novi – 4, Cetinje – 9 and Šavnik - 2.
On the basis of all those controls and monitoring activities performed in 2011, and the data from the mentioned electronic application, it can be concluded that, like in 2010, the biggest number of irregularities in the RF spectrum (in the 10 kHz to 3 GHzfrequencybands)werecausedbytheusersofVHFI,VHFII,VHFIII,andUHFIVandVfrequencybands,particularlybyFM broadcasters, broadcasting in the VHF II bands (from 87.5 to 108 MHz). The noticed irregularities referred to the failure to meet maximum allowed values of some technical and operational parameters concerning FM broadcasts (the level of field strength, modulations – frequency deviations, the width of the occupied frequency bands, frequency carrier offset), or were due to insufficiently attenuated inter-modulation products thereof, which gave rise to harmful interferences and prevented a safe and uninterrupted use of other frequency bands. This was particularly remarkable in frequency bands allocated to aeronautical radio navigation service (in particular in the 108 through 137 MHz bands) and VHFIIIandUHFIV/VbandsusedforTVbroadcasting.Duringregular control and monitoring activities a large number of inter-modulated products of above mentioned FM radio broadcasting emissions was demodulated, which was mainly due to the lack of good quality filters, over-occupancy of FM bands and high radiated powers. All of them affected the safety of aerial navigation, especially in the areas around Podgorica Airport and Tivat Airport. It was also found that quite a few users of the mentioned band did not use the polarization of their waves as a parameter, which was defined by the Radio Frequency Allotment Plan, and subsequently included in the authorization for the use of frequencies.
The inspection controls also showed that a number of warned users of RF spectrum had not eliminated the faults, i.e. they
usually repeated them or only partially removed them. A number of RF spectrum users did not utilize the assigned resources (it usually referred to the same RF spectrum users), so it happened in some municipalities that they had no emissions fromVHFIIbands(87.5MHz–108MHz).Ontheotherhand,there were some users of frequency resources who always applied operating parameters which were in accordance with technical norms, and therefore could set a good example for other RF spectrum users. The emissions of functional systems almost fully met the requirements of technical criteria for basic operating parameters for those radio transmissions. No significant problems were identified in the use of bands allocated to maritime mobile service. In border municipalities thepresenceofFMandTVbroadcastingtransmissionsfromneighbouring countries were detected. It is very likely that transmissions from neighbouring countries in our territory also exist in other bands of importance (primarily in GSM/UMTS bands), but it cannot be determined with certainty by the equipment in fixed or mobile stations. As early as in 2012 newly acquired digital mobile control-measuring station will be used for measuring the quality of GSM/UMTS networks.
Generally speaking, the improvement of parameters related to the operation of broadcasting equipment by preventive activities (sending letters - warnings) was noticeable and the situation was much better in 2011 than in 2010.
In October 2011 the works on GKMC were completed, so that it was opened for work, i.e. put into operation on 06. 10. 2011. It should be noted that this facility is of particular importance, which owing to its position dominantly receives and controls radio transmissions from a greater areas of Podgorica, Danilovgrad with Bjelopavlićka plain, emission center of LovćenandBjelasica,VeljaGora,apartofBarmunicipality,as well as from neighbouring Albania. It was pointed out before that along with the completion of GKMC, that facility was connected by telecommunications with the Agency’s premises and the buildings of RKMC and DUKMS Pljevlja. That assignment was, after the conducted tender procedure, awarded to the Broadcasting Center d.o.o. Now the control-measuring equipment can be remotely managed from GKMC.
During 2011, activities were completed in relation with the purchase of a mobile control-measuring station for monitoring of digital radio transmissions on the move (hereinafter called DMKMS). The representatives of the Agency, according to the Contract signed on 12. 01. 2011, started final designing and adaptation of the vehicle and installation of equipment formonitoringGSM/UMTS/DVB-Tbands.On22.07.2011thetakeover was carried out in Podgorica (stated in the minutes), as well as and quality acceptance of the adapted vehicle with installed equipment, when the required test on acceptance on our part was performed.
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After the delivery, the employees from the Section for RF spectrum control and monitoring (hereinafter referred to as the Section) were actively engaged, as much as their planned assignments allowed them, in theoretical and practical training for the work with new DMKMS, so that they could start in II quarter 2012 with the first measuring of the parameters of quality and signal coverage by authorized GSM/UMTS networks throughout Montenegro.Concerning the specialization and international affirmation in the area of RF spectrum monitoring and control, the employees responsible for these activities have continued their active participation in the work of CEPT/ECC WG FM PT22 working group, which is only in charge of issues related to organization, measurement procedures and the manner of monitoring of specified frequency bands and services.
5.5. Completion of works on the Main control-measuring center on Dajbabska gora in Podgorica and activities on the construction of three new remote-controlled control-measuring stations in Rožaje, Kotor and Ulcinj
After the conducted legal procedure, the access road to GKMC on Dajbabska Gora was finished at the end of February 2011. In the first half of February, a tender for public procurement in lots was called for the remaining works on GKMC related to the completion of architectural and crafts works on electric power, telecommunication, hydro-technical and thermo-technical installations. The Agency awarded the contracts for work performance in lots to the following companies:
• forfinalarchitecturalandcraftsworks,andtheworks on electrical power installations and hydro-technical installations – to Consortium comprised by business organizations: „Erlang“ from Nikšić, „Elko Tim“ from Podgorica, „Tangenta“ from Nikšić, „MP Bedem“ from Nikšić, „Primavera“ from Herceg Novi, „Urban Studio“ from Podgorica and „Sigurnost“ from Podgorica,
• forfinalworksontelecommunicationinstallations-to Consortium comprised by business organizations: „Hidrocop“ from Podgorica, „Pro Engineering“ from Podgorica and „Koving-M“ from Budva; and
• forfinalworksonthermo-technicalinstallations–tobusiness organization „Grijanje“ from Danilovgrad.
The procedures for the selection of contractors per stated lots (five lots) lasted until 6 July 2011, when the Agency signed the last contract on the completion of works on thermo-technical installations. Public procurement in lots took a lot of time due to a big number of bidders and the fact that some bidders used its right to submit an objection or a complaint about the award of the contracts on work performance. Concerning the lots for the selection of contractors for electric power and telecommunications installations, the State Commission
accepted the complaints of the bidders and returned the cases to the Agency, as an ordering authority to carry out new scoring and evaluation of submitted bids for the same lots, which considerably prolonged the process of public procurements for all lots and significantly delayed the beginning of works. Due to the nature of remaining crafts and installation works for the completion of facilities on Dajbabska Gora, and for the purpose of work synchronization, it was necessary to introduce into work all contractors for lots at the same time, so that the works started with full intensity only in the beginning of July and were completed at the end of October 2011. During July 2011, the Agency initiated some procedures of public procurements for: the completion of manufacturing and installation of a panoramic lift in June (awarded to a business organization „Euro Prost“ from Gračanica in B&H), arrangement of the access area to GKMC (awarded to „Inženjering Put“ from Podgorica) and office furnishing in GKMC (awarded to businesses „Ing Invest“ from Danilovgrad and „DR Trade“ from Podgorica).All these works were finished in October, after which time the facility was put out into operation.During 2011 the activities continued on the construction of three previously planned remote-controlled control-measuring stations in the municipalities of Rožaje, Kotor and Ulcinj. For remote-controlled stations in Rožaje and Kotor, the Agency ensured, after prior obtaining technical requirements and approvals of competent local authorities and public companies in those municipalities, the preparation and review of major designs for their construction as early as in 2010. In the same year, the requests were submitted to relevant secretariats in the municipalities of Rožaje and Kotor for issuing a town planning approval and building permit. In the procedure of issuing a town planning approval for the remote-controlled station in Kotor, after signing a contract with the municipality of Kotor in 2009 on a long-term lease of land where the future station was supposed to be built, a dispute arose as to whether the land was owned by the Municipality or the state of Montenegro. By the end of 2011, the issue of ownership over the subject plot had not been resolved, which stopped the procedure of issuing a building permit and consequently, the beginning of the construction of the remote-controlled station. For the remote-controlled station in Rožaje, the Agency obtained through corresponding procedures in 2010 necessary technical requirements from competent local authorities and public companies, on the basis of which it provided preparation and review of technical documents for the construction of the remote-controlled station. At the end of December 2010 the Agency submitted to the competent secretariat of the municipality of Rožaje a request for obtaining a town planning approval and building permit. In the first half of 2011, the Agency repeatedly supplemented the submitted documents at the request of the mentioned secretariat. Those supplements were necessary for the obtaining of agricultural approval, by which the Agency was given approval by the Secretariat for Economy of Rožaje municipality that the agricultural land could be used for non-agricultural purposes, i.e. for the construction of the remote-controlled station, and the transport approval, by which the Agency was allowed by the Directorate for Transport of Montenegro and on the basis of the prepared preliminary design of the transport connection, to get connected to the regional road Rožaje-Tutin; the supplements were also needed for the preparation of the project for connection of the power cable to a pole transformer which was nearest to the location where the future remote-controlled station was to be built. On
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the basis of the supplemented documentation, the competent secretariat of Rožaje municipality issued at the end of December 2011 a permit for the construction of a remote-controlled station. By an appeal filed within the statutory time, the Agency contested the issued permit due to the inappropriately short term of construction of one month. For the construction of the remote-controlled station in Ulcinj municipality, the Agency signed a contract with the Municipality on the lease of the land for the construction of a remote-controlled station in 2010. After the contract signing, the Agency submitted requests to competent local authorities and public companies for obtaining technical requirements for the preparation of the main design for the construction of the remote-controlled station. The procedure for issuing urban-technical requirements for the construction of the remote-controlled station has been under way since November 2010, due to procrastination of the relevant local authority to give its opinion on the environmental impact of the equipment which would be installed in the remote-controlled station. This procedure was not completed in 2011 in spite of the fact that the Agency had forwarded to that authority the opinions of competent authorities from other municipalities where the construction of remote-controlled station had been carried out or planned, stating that there was not a bad environmental impact of such equipment.
5.6. Study on further development of the RF spectrum control and monitoring system in the period 2012-2016
During 2011, the Agency was engaged in the development of the Study on further development of the RF spectrum control and monitoring system in the period 2012-2016. Baselines which were used in preparation of the project task were the competences of the Agency stipulated by the law, such as:
• tocarryoutapermanentmonitoringoftheRFspectrum,
• tocoordinatetheuseofradiofrequencieswithadministrations of neighbouring countries,
• tosupervisetheworkofoperatorsintheelectroniccommunication sector,
• toadministerRFspectrumincompliancewiththeRadio Frequency Allocation Plan and allotment plans,
• thatsupervisorsshallcontrolthecomplianceofrequirements for the use of radio frequencies and the compliance of operating parameters with regulations and norms; identify the origin and location of the sources of hindering radiation and harmful interferences in the RF spectrum; and work on timely identification of radio stations which use radio frequencies without authorizations.
Bearing in mind the professional qualifications of employees, the Council of the Agency decided that the study was to be prepared by expert services of the Agency and that a renowned institution had to be engaged to review the document and to give a comprehensive expert view of the solutions proposed
by this Study. After several months’ work, expert services prepared the mentioned Study in mid-2011. The purpose of the document is to provide, on the basis of general concept of RF spectrum monitoring in Montenegro defined by the 2003 Study and the current state of its implementation, the guidelines and time schedule for further development of the system in the period from 2012 to 2016, taking account of regulatory, technical and technological advances in radio-communications, as well as market changes that had taken place in the period from 2003 to 2011. At the end of October 2011, the Agency, after prior submission of a request for getting an approval for starting a negotiation process without previous invitation to tender, received from the Public Procurement Directorate the required approval, so that the procedure stipulated by law was conducted and a contract signed with the Faculty for Electrical Engineering of the University of Montenegro, as the only institution in Montenegro capable of doing the review of the mentioned document in a competent way, taking account of the state’s interests. The contract was signed on 08. 12. 2011 and the Faculty for Electrical Engineering was committed to submit a report on the review in the period of 90 days from the day of the contract signing.
5.7. Expert supervision in electronic communications
Pursuant to the Law on Electronic Communications, supervision over the activities of operators registered with the Agency for Electronic communications and Postal Services shall be performed by the Agency through Supervisor for Electronic Communications. Supervisors for Electronic Communications shall perform the activities of supervision, as specified in the procedure defined by the Law on Electronic Communications and the Law on Inspection Supervision. Regular expert supervisions over the operators registered with the Agency and over the entities to which the Agency had issued authorizations for the use of radio frequencies were carried out in compliance with the 2011 Plan of Electronic Communications Supervision, which was approved by the Agency’s Council. Extraordinary controls were carried out, as appropriate, in the following cases:
• whensupervisorsfoundthattheentitycarriedout its operations without registration and the authorization of the Agency,
• whenradiostationscausedinterferenceswiththe operation of other radio stations,
• when radiospectrummonitoring reportsindicated the occurrence of irregularities in the work of radio stations,
• whenanoperator,useroranotherentitysubmitteda reasonable request for carrying out the control.
Control inspections were conducted as appropriate, i.e. in case when it was necessary to check whether the operations were carried out in compliance with the decision of the supervisor for electronic communications, or decisions and orders of the Agency.
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When conducting expert supervision in compliance with the Law on Inspection Supervision, supervisors primarily acted in a preventive. They pointed out the established irregularities and determined a deadline for their correction.During 2011, there were 263 controls, by which the Supervision Plan for this period was fully accomplished. They consisted of 212 planned controls, 24 controls at the request for expert supervision, 21 controls made ex-officio and 6 control examinations of compliance with the imposed activities.The table below presents the controls per type conducted during 2011:
Year 2011 Planned controlsExtraordinary controls
Total controlsAt the request Ex officio Control
examinationsJanuary 10 1 2 0 13February 16 2 3 0 21March 25 2 3 4 34April 19 4 2 0 25May 22 2 0 0 24June 29 5 1 1 36July 7 0 1 0 8August 8 2 2 1 13September 21 1 2 0 24October 27 1 1 0 29November 19 3 3 0 25December 9 1 1 0 11Total 212 24 21 6 263
80,6%
9,1%
8,0%
2,3%
On request
Ex-o�cio
Planned inspections
Control
Comparative overview of expert supervision in 2009, 2010 and 2011 is given in the table and graph below:
Year Planed controls Extraordinary controls Total controls
2009 203 44 2472010 181 65 2462011 212 51 263
0
50
100
150
200
250
300
2009 2010 2011
Extraordinary inspections
Planned inspections
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Minutes were made on carried out controls. The representatives of the supervised entities had no objection to the minutes. The copies of the minutes were given to authorized representatives of supervised entities and duly records were kept in accordance with the Law on Inspection Supervision.
In 106 cases, it was ordered to supervise entities to eliminate identified irregularities. Out of that number of cases, in 66 cases the elimination of irregularities was ordered by minutes, and in 40 cases a decision was attached to the minutes. In comparison with the total number of carried out controls, the percentage of irregularities identified in 2011 amounted to 40.3%.Theidentifiedirregularitiesreferredto:
• thelackofauthorizationfortheuseofradiofrequencies,• non-complianceofoperatingparametersofthesystemwithissuedauthorizationfortheuseofradio
frequencies (change of frequencies, deviation of frequencies, channel width, capacity, antenna system, etc.),• thelackoftheAgencyCouncil’sapprovalonstandardsubscriberagreements,• thelackofauthorizationfortheuseofnumberingforsomeshortcodes,• thelackofauthorizationsfortheuseofaddressesforsomecodesofsignalingpoints,• non-complianceoftheformofitemizedbillswiththeprovisionsoftheLaw,• non-compliancewiththeprovisionorderingpublicavailabilityofpricesandgeneralconditionsfortheuse
of public electronic communication services,• thelackofanattestforelectricalinstallationandlightningprotectionofthefacility,• non-compliancewiththedeadlinesindicatedintheAgency’sDecisionsandapplicableRulebooks(number
portability, universal telephone directory, etc.).
The table below contains a comparative overview of irregularities identified by supervision controls conducted in 2009, 2010 and 2011.
YearNumber of conducted controls
Number of irregularities identified
Percentage of irregularities identified
2009 247 102 41.3%2010 246 98 39.8%2011 263 106 40.3%
The examinations of broadcasters’ equipment operation were carried out in broadcasting facilities in the municipalities of Bar, Kotor, Tivat, Budva, Ulcinj, Nikšić, Kolašin, Bijelo Polje, Andrijevica, Rožaje, Mojkovac, Plav, Pljevlja, Šavnik, Podgorica and Cetinje. On those occasions, in case of a numbers of broadcasters, non-compliance of the operating parameters of the system with issued authorizations for the use of radio frequencies was identified (deviation of frequencies, the lack of output filter, etc.). OnthebroadcastingfacilityVeljiGraditwasfoundthatbroadcastersRadioDandRadioDPlusdidnotoperateinassignedfrequencies, but they had swapped them. An order was issued to bring the work of the equipment in compliance with issued authorizations. Also, for all other irregularities identified orders were issued in the minutes that work of the equipment had to be brought in compliance with applicable authorizations.
DuringthecontroloftheuseofVSATstations,itwasfoundthatCrnogorskakomercijalnabankausedtheequipmentwithoutthe Agency’s approval, and that the British Information Centre did not use frequencies in compliance with the authorization. After the orders issued in the minutes, measures were undertaken by the supervised entities, and the work of the equipment was brought in compliance with the provisions of the Law on Electronic Communications.
The equipment of mobile operators was examined (RBSs and RR links) in the municipalities of Podgorica, Tivat, Kotor, Pljevlja, Plužine, Žabljak, Berane, Andrijevica, Plav, Kolašin, Budva and Danilovgrad. On those occasions, the following irregularities were identified:
• CrnogorskiTelekomused10RRlinkswithoutauthorizationfortheuseofradiofrequencies,7RRlinkscontraryto the issued authorizations for the use of radio frequencies, 4 RBS without authorization and 1 RBS contrary to the issued authorization;
• Telenor used 14 RR links without authorizations for the use of radio frequencies, 28 RR links contrary to the issued authorizations for the use of radio frequencies, 27 RBS without an authorization, 3 RBS contrary to the issued authorization, while in the meantime, the validity period for the authorization for one RBS had expired;
• M:TelusedoneWimaxstationand1RRlinkwithoutavalidauthorization.
It was found that all three operators did not have attest on applied measures for the protection of devices and equipment on some locations, so a deadline was set in the minutes for the elimination of irregularities identified, and those requirements were met. It was also found that the Broadcasting Center did not possess authorization for the use of radio frequencies in which the equipment worked and which this operator used as access links for the digital system of radio-relay links. In all those cases, it was ordered by a decision that an authorization had to be obtained for the use of radio frequencies or, otherwise, the frequencies had to be put out of use. The operator met the requirements contained in the issued decisions within the envisaged timeframe.
By the control of the provision of the leased lines with the Broadcasting Center (RDC), it was found that RDC used the equipment for RR links from an unlicensed band (5.4 GHz), which operated by power higher than allowed. Also, the prices of leased lines were
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set according to capacities only, without taking account of distances. It was also found that RDC provided the service of traffic routing on a location for which the prices were neither defined nor published in the Price List. For these irregularities identified, the decisions were issued and elimination of irregularities ordered, which the operator complied with within the stipulated time, except for pricing of leased lines according to capacities and distances, as the deadline has not expired yet.
With the operator of Montenegro power transmission system a control of the services of leasing optical fiber was conducted. This control showed that the operator had not obtained the approval of the Agency’s Council on the form of the subscriber agreement, and had not published general conditions of service providing in compliance with the Agency Council’s decision. For irregularities identified an order was issued in the minutes in order to bring this service provision in compliance with applicable legal regulations, which the operator followed and acted accordingly. During the control of the services of leasing optical fiber lines and leased lines with the operator of Fibernet, it was found out that this operator had not launched the services yet.
With the operator of MNNews the irregularities identified referred to the absence of the approval of the Agency’s Council on standard subscriber agreements and non-compliance with the provision that prices and general conditions for the use of public electronic communication services had to be publicly available. It was ordered by a decision that these irregularities had to be eliminated, and the operator followed the order and acted accordingly.
The control of the system for service provision via fixed wireless access (WiMAX) was conducted with M:Tel, Telenor, BBMi, MontenegroConnect,WiMAXMontenegro,andviaWiFiaccesswithDastoMontel,W-netandVIPBroadbandMontenegro.OperatorsWiMAXMontenegro,MontenegroConnect,W-netandVIPBroadbandMontenegrohadnotlaunchedtheservicesyet, BBMi had three users only, Telenor had 18 users (the majority were Telenor employees and test users at the same time), Dasto Montel had 331 users, and M:Tel had 7,103 users. Due to the lack of adequate telecommunication infrastructure, M:Tel had not implemented 13,749 requests, and Telenor 20 requests. Operator Dasto Montel had not obtained the Agency Council’s approval on the form of a subscriber agreement, general conditions of service provision had not been published in compliance with the Agency Council’s decision, and the form of the bill had not been in accordance with Article 113 of the Law on Electronic Communications. For irregularities identified, orders were given in the minutes to bring the service provision in compliance with applicable legal regulations, which was subsequently done.
ThecontrolofprovidingtheservicesofInternetandradioandTVprogrambroadcastinguptoend-userswasconductedwithCabling(Budva)andM-kabl(Tivat,Herceg-Novi,BijeloPoljeiPljevlja)operators.AtBBMandTotalTVMontenegrooperatorsthecontrolofprovidingtheservicesofradioandTVprogrambroadcastinguptoend-userswasconducted.AtM-kabloperator,itwas found that in addition to the basic subscriber agreement, the users had to sign an Annex to the agreement, which did not have the approval of the Agency’s Council. It was ordered by the Minutes that a request for approval had to be submitted for getting approval on the form of the Annex to the Agreement, which the supervised entity followed and acted accordingly. No irregularities in work were noticed with other operators.
ThecontrolofthesystemforprovidingtheserviceofvoiceovertheInternet(VoIP)wasconductedwithIPMONT,Pronto-Tel,Montecom,VoIPandVoIPTelekomoperators.OperatorMontecomhadnotlaunchedtheserviceyet.TheirregularitiesidentifiedwithPronto-TelandVoIPoperatorsreferredtotheabsenceofawebsiteandthelackofpubliclyavailablepricesandtariffsofservice providing. Also, it was observed with Pronto-Tel operator that the billing of services for end-users in Montenegro was made in Ukraine, and that the form of subscriber’s bill was not brought in compliance with Article 113 of the Law. In all these cases the operators were ordered by a decision to eliminate the noticed irregularities. Operator Pronto-Tel advised that the imposed activities were carried out before the expiry of the deadline ordered by the decision, which was confirmed during a subsequent control.Also,VoIPoperatoractedinaccordancewithordersfromthedecision.WithVoIPTelekom,itwasestablishedthatgeneralconditions for service provision had not been placed at the operator’s website, the approval of the Agency’s Council about the form of the subscriber agreement had not been obtained, the form of the detailed bill was not in compliance with the Law, the prices from the tariff plan were not brought in compliance with the publicly available (published) price list, the attests for electrical installations and fire protection were missing. An order was issued in the minutes that observed irregularities had to be harmonized with applicable legal regulations.
The switching system operation of Crnogorski Telekom was examined at the exchanges of LC1 Podgorica, LC3 Podgorica, LC Herceg Novi, LC Tivat, LC Bijelo Polje, LC Plav, LC Danilovgrad, LC Cetinje, at international and transit exchanges of IC/TC Podgorica and IC/TC Bijelo Polje, and the control was made of MSC T-Mobile in Podgorica and Bijelo Polje. The facilities were secured with necessary systems and devices for fire protection, which were serviced on regular basis. During 2009 and 2010 the installation of new batteries was completed and diesel-electric generator purchased, which increased the autonomy of the device operation in case of the power supply interruption from the power grid. Longer halts in the operation of remote subscriber levels were identified on the territories which were affected by floods at the end of 2010. The faults were identified in the work of the equipment referring to the absence of attests for electric and lightning installations, so an order was issued for their procurement. It was also found that there was no authorization for the use of certain numbering, so a decision was made orderingthattheauthorizationhadtobeobtained.Verificationoftheaccuracyofmeasurementofalltelephoneexchangeshasnot been fully completed, although the operator made a request for such verification of measurement to the Metrology Office.
The control of providing MIPNET service by Crnogorski Telekom showed that the supervised entity had not made publicly available on the official price list granted discounts of services and the principles of their setting. The discounts for some customers ranged from-70%ontheconnectionchargeand-50%onmonthlysubscriptionfeecomparedtotheofficialpricelist.
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In 2011, the controls were conducted with Crnogorski Telekom, Telenor and M:Tel in relation with acting upon the decisions for SMP operators. Crnogorski Telekom and M:Tel had published Reference Interconnection Offers on their official websites, and Telenor did it after the control. During April 2011, after the control had been made, operators brought the existing interconnection agreements in compliance with the published RIOs, which was later checked through the control of interconnection billing. In November the operators also harmonized their prices in agreements and RIOs according to the Decisions issued by the Agency.
The system for service billing of Telenor, Crnogorski Telekom and M:Tel (interconnection and subscriber billing) was also controlled. No irregularities were identified in service billing. Expert supervision was done of mobile telephony switching systems with Telenor and M:Tel. It was found that M:Tel had no authorization for the use of some short codes, and the authorization for the use of signaling points, so it was ordered by a decision to obtain them. The verification of accuracy of time measurement in telephone exchanges has not been fully done yet, although all operators have submitted requests for the verification of the accuracy of measurement to the Metrology Office in due time.
The control of functional systems operation was conducted at Airport Podorica, the Protection and rescue service of Podgorica and Kotor, Power Distribution (Kotor, Mojkovac, Plav, Budva), Taxi Nikšić, Taxi Žabljak, Taxi Berane, Taxi Kolašin, Taxi Podgorica, Taxi Budva. No irregularities in operation were identified on those occasions.
With the operators of Crnogorski Telekom, Telenor and M:Tel the control focused on whether their work was in compliance with Section IX (User Rights and Protection of User Interests) from the Law on Electronic Communications. On that occasion it was established that operators had followed the imposed obligations from the decisions related to irregularities identified earlier, and demand for their elimination (non-compliance of the form of itemized bill delivered by operators with the Law on Electronic Communications; the absence of the approval of the Agency’s Council on standard subscriber agreements, unavailability of some public service prices, inability to limit consumption and failure to enable geographic number portability).
The control of whether the operators Crnogorski Telekom, M:Tel and Telenor had acted in compliance with the provisions of the Rulebook on number portability after its entry into force showed that the operators had not started the application of the Rulebook immediately. The operators kept the requests for number portability longer than it was stipulated by the Rulebook. Decisions were made that the submitted requests were to be processed, and the operators were ordered to act further in accordance with the provisions of the Rulebook.
The control of whether Crnogorski Telekom acted upon the decision of the Agency’s Council showed that Crnogorski Telekom had carried out the activities ordered by the decision, and deleted from the price list the item ˝Costs of additional payment for the use of TT Services .̋ Also, the control of the provision of service of limited consumption in the accounting period by Crnogorski Telekom according to the decision of the supervisor for electronic communications it was found that the
supervised entity had acted in compliance with the requirements from the decision. Service users at a fixed location, as well as the users of mobile services were enabled to activate, at request, the service of limited consumption up to the amount they indicated, regardless of the package they were using.
The control was carried out of the registration of prepaid users of mobile telephony in Montenegro with the operators Crnogorski Telekom, Telenor and M:Tel. The control showed that the operators were performing the registration of service users of public communication networks in line with the Rulebook on the manner of registration of service users of public telecommunication networks. The registration of new prepaid users was performed at the points of card sale (outlets, kiosks, supermarkets) in the way that they first had to fill in a registration form, and later that data was entered in a database. The format of the registration form of all operators contains all necessary information prescribed by the Rulebook. All operators took advantage of the contact with their customers at their outlets in order to inform them about the obligation to be registered. The operators also sent their old users a notification through SMS messages about their obligation to register their prepaid numbers. The deadline for the registration of all prepaid users was 31. 12. 2011 and the control of operators’ acting in accordance with this requirement was carried out in the beginning of 2012.
The control was also conducted of the system for billing the services of leased lines with Crnogorski Telekom (classical and Internet leased lines) and M:Tel (Internet leased lines). The provided services were billed in compliance with the signed agreements. The operators had not made publicly available the principles for determining discounts on the provision of leased lines.
Expert supervision over the users of electronic communications was performed at their request or at the request of the Department for the protection of user rights and interests. The requests referred to irregularities in delivered monthly bills for provided services, inadequate quality of service, and the failure in service provision.
On the basis of initiatives for launching a monitoring procedure, the following controls were performed at operators’ requests:
• operatorVoIPTelekomreportedthatoperatorsPronto-TelandVoIPdidnotbilltheirservicesin the territory of Montenegro. Along with the performance of planned controls with those operators, these statements were checked, and an order was issued in the form of a decision that the irregularities observed had to be eliminated.
• TheBroadcastingCenterreportedthatoperatorBBM provided the service of transmission of broadcasting signals to broadcasting facilities, and also provided that service to Television Montena, though it was not registered with the Agency for that kind of service. The statements from the report were confirmed during the expert supervision, where it was found that BBM had not done the billing nor charged Television Montena for this service. In consultations with the representatives of Television Montena and BBM, an order was issued that BBM had to comply the work of its equipment with the applicable authorization for providing the services of radio and television
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programs distribution up to end-users, and to terminate its contract with Television Montena, which defined the conditions of providing the service of signal transmission up to broadcasting facilities from which Television Montena further did the broadcasting. It was also agreed that Television Montena had to install receivers at the locations where it already had transmitters installed, and being the end-user of BBM, to use the receiver’s output signal for modulation of the transmitter, in which way the quality of signal would not be affected.
• OperatorM:TelreportedthatCrnogorskiTelekomdid not act in compliance with the provisions of the Rulebook on number portability, i.e. that it refused to port numbers under the pretext that subscriber numbers were in a closed user group (CUG) and had not left it before the application of number portability.
Due to the failure to supply data in the format and within the deadline requested by the Agency, the Supervision Department issued a misdemeanor warrant to Telenor and a responsible person in Telenor in accordance with the Law on Misdemeanors.
Cooperation with other inspection authorities
In compliance with Article 134, paragraph 2, point 5 of the Law on Electronic Communications, the inspector for electronic communications was informed about:
• TheprovisionoftelecommunicationservicetotheNational Police of Montenegro by undertaking SBS Network Montenegro. The control showed that SBS Network Montenegro did provide the services of Internet access via satellite without being registered for it with the Agency. SBS Network Montenegro sent a letter No 0205-3979/1 of 08. 10. 2010 to the Agency, requesting to be entered into the Operator Registry. The Agency responded negatively to this letter, justifying its attitude by the fact that the way in which the provision of the electronic communication service had been planned was not in line with Article 24, paragraph 2 of the Law on Electronic Communications. By an additional application for the entry into the Operator Registry by SBS Network Montenegro, this operator was issued a decision on the entry into the Operator Registry;
• TheprovisionofthevoiceovertheInternet(VoIP)inthe municipality of Ulcinj by a residential customer without an authorization from the Agency;
• Theuseof radio frequencieswithout theauthorization of the Protection and Rescue Service of Municipal Assembly of Pljevlja;
• BroadcastingofTVLunaprogramsfromthelocation of Kofiljača-Plav, without an authorization for frequency use.
Also, on the basis of an initiative for launching a monitoring procedure, a control was performed on request of Crnogorski Telekom, which had reported that the owner of the ˝Rivijera˝
Hotel at Njivice – Herceg Novi, within which there was a remote subscriber level, had blocked up the front door, thus preventing the access to equipment for providing telephone services at a fixed location. In collaboration with the chief inspector for electronic communications and postal services, the control was performed and the controlled subject was ordered to enable the access to the equipment.
On the basis of the complaint of Cabling operator about illegal provisionoftheserviceofTVprogrambroadcastinguptoend-users, in collaboration with the chief inspector for electronic communications and postal services and a representative of the Agency for Electronic Media, a control procedure was performed in the municipality of Budva. No violation of the Law was identified on that occasion.
5.8. Process of switchover from analog to digital broadcasting system
Pursuant to the conclusion of the Government of Montenegro from the session held at the end of 2010, the Ministry for Information Society and Telecommunications organized a public hearing about the Draft Law on Digital Broadcasting. The public hearing lasted in the period from 28. 01 - 08. 02. 2011 and the central hearing took place on 07. 02. 2011. After the completion of the public hearing, the Ministry for Information Society and Telecommunications adopted the Decision No 346-01-768/1-11 of 18. 02. 2011 and formed a working group, which comprised also the representatives of the Agency. Its task was to prepare Draft Law on Digital Broadcasting. The deadline for the preparation was the second quarter of 2011. The Working group completed its task successfully and forwarded in due time the Draft Law to the Government, which on its side, and thus fulfilling Montenegro’s commitments from the Stabilization and Association Agreement, adopted the Draft Law on Digital Broadcasting. This Law envisaged that the process of switchoverfromanalogtodigitalbroadcastingofTVprogramsin Montenegro had to be completed by 31. 12. 2012. As it was stated by the Government of Montenegro, digitalization would beimplementedbyintroductionofDVB-T2standard,whichenables a quick transition from analog to digital technology for all commercial electronic media, while at the same time a high level of utilization of RF spectrum is reached and the achieved level of media pluralism in Montenegro is maintained. Montenegrin Parliament adopted the Law on Digital Broadcasting at the beginning of July 2011 and it was published in the »Official Gazette of Montenegro Gore“ No 34/11.
At the beginning of March 2011, the Ministry for Information Society and Telecommunications established a working group, whose task was to conduct an analysis of costs of introducing a DVB-T2technologyandforbuildinganothermultiplexinordertoassessthejustificationofDVB-T2technology.Thedeadlinefor the completion of the analysis was 31 March 2011. Within the activities that this commission had to carry out, a meeting was held on the premises of the Broadcasting Center d.o.o. Podgorica (hereinafter called the RDC), in order to reach an agreement about the method of work and relevant data for
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the assessment. As this assessment called for necessary data in termsofcomparisonofDVB-TandDVB-T2technologies,whichcould only be supplied by RDC, and bearing in mind previous preparations for digitalization, it was concluded that RDC was obliged to submit it to the relevant Ministry.
The text of the Law on Broadcasting Digitalization, or any other document does give rise to the conclusion that the applicable standard for digital broadcasting in Montenegro has changed. Taking account of further technological development and significantadvantagesofDVB-T2standardcomparedtoprevious ones, there is a statement in the Strategy of Information Society Development 2012 – 2016, Section 6.1-Technology and infrastructure for media and broadcasting, adopted by the Government of Montenegro at the end of 2011, which reads asfollows:“DVB-T2standardisanadoptedstandardfordigitalbroadcasting, which was approved in September 2009 by the European Telecommunications Standards Institute (ETSI)”.
After signing the contract on the purchase of equipment needed for digital broadcasting between the European Union Delegation Podgorica (Montenegro) and the Italian company Eurotel, which equipment would be used by RDC in the beginning of June 2011, Ministry for Information Society and Telecommunications formed a committee for monitoring the implementation of the project for the switchover from analog to digital broadcasting systems, which besides the representatives of the Ministry and RDC, included a representative of this Agency. The first (and only) meeting of the committee, summoned by the committee Chairman, was held on 02. 09. 2011. The committee adopted conclusions about the necessity of further work on the adoption of RFS Allotment Plan for digital terrestrial broadcasting, as well as further activities in the first phase of transmission equipment procurement by RDC.
Pursuant to provisions of Article 3 and Article 18 of the Law on Digital Broadcasting, on 30. 09. 2011 the Agency’s Council adopted the RF Allotment Plan for digital terrestrial broadcasting („Official Gazette of Montenegro“ No 55/11), after prior approval of the Council of the Agency for Electronic Media on this plan, according to the Law on Electronic Communications. The RF Allotment Plan for digital terrestrial broadcasting determines:
• technicalrequirementsandthemannerofuseof radio frequencies which were allocated by the RFS Allocation Plan in Montenegro (“Official Gazette of Montenegro” No 42/10) for the use by digital terrestrial broadcasting systems,
• geographicareas(allotmentzones)tobecoveredby a digital broadcasting signal.
5.9. Giving opinion about spatial planning documents
The Agency for Electronic Communications and Postal Services, in the capacity of a legal entity responsible for telecommunications and postal affairs, according to Article 38 of the Law on Spatial Development and Construction of Buildings shall, on request of the body in charge of preparatory activities, supply all data available, as well as its proposals and opinions necessary for
elaboration of the planning document.
In 2011 the Agency issued 38 opinions about the planning documents in the part referring to electronic communications, out of which 29 were forwarded to the Ministry of Sustainable Development and Tourism and 9 to local self-government units (6 to the Municipality of Herceg Novi and one opinion to the municipalities of Pljevlja, Žabljak and Tivat respectively). The Agency’s opinion about the draft planning documents is based on the Law on Electronic Communications, bylaws adopted thereupon, on the Strategy for the Development of Information Society 2012 to 2016: Montenegro – digital society and modern trends in the development of electronic communications. By giving its opinions about the draft planning documents, the Agency is trying to create pre-conditions and define the directions of further and accelerated development of ICT sector and broadband access, to bring investments into ICT sector, to promote competition in the electronic communication market, to ensure availability of broadband access, to stimulate citizens and legal entities to use available ICT tools and services in everyday life and business, and finally to ensure the implementation of state-of-the-art technological solutions. In that way, the Agency provides guidelines which are the base for the development of strong and generally available infrastructure, which allows joint use by a number of operators when providing a high speed broadband connection, and the use of modern services by all users.
Along with the proposals and suggestions for the preparation of planning documents, in part related to electronic communications the Agency supplied available data about operators and services they provided in municipalities in the areas included in the planning documents, as well as about the number of service users, antenna masts, base radio stations and switching systems placed in the areas of municipalities. The Agency also referred to the adequate assessment of the level of electronic communications development within the planning document, based on the data about fixed telephony penetration and fixed broadband access, and on the comparison with the level of development in the EU Member States.
When giving opinion about the planning documents, the Agency particularly highlighted the following items:
• the importanceof implementationofnewtechniques and technologies, market liberalization and competition in the electronic communications sector, which should speed up the development of electronic communications, the increase in the number of services, their economic affordability and geographic availability, contribute to better and bigger awareness of citizens and ensure a faster development of economy and a municipality as a whole;
• planningandbuildingofelectroniccommunicationinfrastructure have to meet the requirements of several electronic communication operators, which would offer to citizens good-quality, modern and affordable electronic communication services;
• planningofelectroniccommunicationnetworkshas to be based both on the implementation of operators’ plans and on the infrastructure which local authorities could use for their own needs;
• building,reconstructionandreplacementof
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electronic communication systems should be performed according to the highest technological and environmental criteria;
• plannedfacilitiesandthefacilities incabletelecommunication ducts and home installations should allow further modernization of electronic communication networks (FTTX technology) with no need for carrying out additional works;
• theuseofopticfibercablesintheaccessnetwork,which would enable the use of more advanced services, whose provision is just being launched or is planned to be launched.
By giving information about electronic communication sector concerning operators, services and infrastructure, and the opinions needed for the preparation of planning documents, the Agency improved their quality and profiling of its position in development activities both in the electronic communication sector and the entire Montenegrin society.
5.10. Issuing requirements during the construction of apartment and office buildings
The Agency for Electronic Communications and Postal Services shall issue, on request, requirements during the construction of properties, in accordance with the provisions of Modifications of and Additions to the Law on Electronic Communications („Official Gazette of Montenegro“ No 32/11) and Modifications of and Additions to the Law on Spatial Development and Construction („Official Gazette of Montenegro“ No 34/11). Pursuant to Article 26 paragraph 4 of the Law on Electronic Communications, the Agency shall determine the requirements for building of subscriber communication cables, cables for cable distribution and/or joint antenna systems. In paragraph 5 of the same article, it is stated that these requirements are determined with the compensation of real costs which are established by the Agency. On the recommendation of the Ministry of Sustainable Development and Tourism, and with a view of reducing costs of obtaining a building permit, the Agency at present issues the requirements from its scope of competencies free of charge.
A request for obtaining requirements during the construction of facilities is submitted to the Agency by the authorities of local self-government units – secretariats responsible for the activities on spatial development and construction of facilities, and the Ministry of Sustainable Development and Tourism. In the period from 23. 08. 2011 to 31. 12. 2011, 310 requests were submitted. The Agency was addressed for issuing requirements by the following authorities:
- the Ministry of Sustainable Development and Tourism
26 requests
-Secretariat for spatial development, housing, utilities and environmental protection of Bar municipality
107 requests
-
Secretariat for planning and spatial development and environmental protection of the Royal Capital of Cetinje Cetinje
3 requests
-Secretariat for spatial planning and construction of Herceg Novi municipality
35 requests
-Secretariat for spatial planning and development and environmental protection of Podgorica, the capital
116 requests
-Secretariat za spatial development and environmental protection of Tivat municipality
16 requests
-Secretariat for urban planning and spatial development of Ulcinj municipality
7 requests
According to submitted requests for issuing requirements for the construction of facilities within the timeframe stipulated by the Law, the conditions were issued for building and reconstruction of various facilities: apartment buildings – for individual and collective housing, tourist buildings (hotels, villas, holiday resorts), office buildings, apartment–office buildings, base stations, transformer stations, cable lines, as well as the conditions for: construction and reconstruction of roads, building of terminals for liquid fuels, construction of a sanitary depot, building of piers, reconstruction of bridges, revitalization of fortifications, development of various public spaces.
5.11. International activities
At the beginning of October 2011, the Agency organized for the ninth time in a row International Conference named „Topical issues in electronic communications sector regulation“. About 90 participants attended the Conference, including the representatives of regulatory authorities from Serbia, Croatia,
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Slovenia, Albania, Macedonia, Romania, Germany and Montenegro; the representatives of relevant ministries from Croatia, Bosnia and Herzegovina and Montenegro, as well as the representatives of the various operators from Montenegro and neighbouring countries. The participants in the Conference primarily discussed the issues related to the position of regulatory authorities in the process of sector regulation, and the issues regarding the implementation of the EU new regulatory framework. The Conference also dealt with the rights and protection of user interests, the protection of privacy, the issues related to number portability, cost accounting and accounting separation. The focus of the Conference was the issue of RFS „re-farming“, as well as the questions related to the purpose and use of digital dividend. Being aware of a perennial contribution to international reputation of the Information Technology Achievement Festival (INFOFEST)andthankstotheten-yearwork,attheendofXVIIIINFOFEST the organizer gave the Agency for Electronic Communications and Postal Services of Montenegro a great award of INFOFEST. On behalf of the INFOFEST as an organizer,theawardwaspresentedbyPhDVujicaLazović,Professor, and Deputy Prime Minister of the Government of Montenegro, who is also the Minister for Information Society and Telecommunications in the Government of Montenegro, and PhD Milica Pejanović-Đurišić, Prof. and President of the INFOFEST Expert Board. On behalf of the Agency, the award was received by Mr Zoran Sekulić, Executive Director of the Agency.
During 2011, the Agency continued collaboration with the most important international institutions in the field of electronic communications, like the International Telecommunication Union (ITU), the European Conference of Postal and Telecommunications Administrations (CEPT), the European Commission and Cullen International. The Agency also established collaboration with the Body of European Regulators for Electronic Communications (BEREC), and continued cooperation with NRAs from neighbouring countries in issues referring to general matters of the regulation of electronic communications and postal services, and also in some specific projects.
Within the cooperation with the ITU, the representatives of the Agency for Electronic Communications and Postal Services attended a two-day seminar organized at the end of June by the ITU Telecommunication Development Bureau. The Seminar brought together 35 representatives – regulators’ heads and experts in this field from 24 countries. During the two-day training, the lecturers pointed out the importance of implementation of pricing and cost models for the development of a competitive environment. The Seminar covered two topics: Economics of competitiveness, rules on the protection of competition and regulation, Market definition – Structure and purpose of carrying out the process of market analysis, Definition of regulatory strategy for the implementation of accounting separation and cost accounting – Selection of an optimum approach in compliance with national specificities, Price control and its correlation with cost modeling and regulatory accounting. In addition to this, the representatives of the Agency took part in meetings and discussions held according to the instructions of the ITU Radio-communication Bureau (RRB) in order to resolve the problem of harmful interferences in broadcasting service in
the Mediterranean area. In these meetings, which were attended by the representatives of the ITU-R Bureau, the representatives of Italy whose stations had been causing interferences, and the representatives of neighbouring administrations, various views were presented and a critical review of the harmful interference was given, stressing that Italy had to undertake urgent measures to resolve the reported problems. Therefore it was agreed that a database had to be established which would contain all reported interferences caused by the stations of Italian administration, in compliance with the Radio Regulations (RR), that such a database should be a base for making a road map with a view of defining concrete steps for problem solution, particularly dates for their completion, which would be permanently updated, in order to allow all stakeholders the monitoring of this problem and insight in all results, i.e. problems solved, if any, or the failure to solve them. Concerning this issue, the representatives of the Agency expressed their readiness to cooperate in detecting and eliminating harmful interferences, in compliance with the provisions of the above mentioned international instrument regulating the use of radio frequencies. The representatives of the Agency participated together with the representative of the Ministry for Information Society and Telecommunications in the second session of the Conference Preparatory Meeting (CPM2511-2) for the World Radio-communication Conference (WRC26-12), where they discussed many issues related to future use of radio frequency spectrum and the development of radio-communication in terms of enabling further convergence and coordination of all radio services.
During 2011, the Agency had an intensive cooperation with CEPT, which referred to the delivery of much information and filling in questionnaires which some CEPT working bodies used for the development of documents, proposals of technical standards, etc. Also, the participation in some CEPT working groups continued. With a view of the preparations for the World Radio-communication Conference (WRC2012), a plenary meeting of Conference Preparatory Group of CEPT countries was held in order to define European Common Proposal – ECP and prepare a European Common Position (ECP) in the mentioned meeting. The Plenary meeting also discussed project team (PT) reports, which were used to form draft European common proposals under the items in the WRC-12 Agenda.
The Body of European Regulators for Electronic Communications (BEREC) provides a platform for cooperation, exchange of information and the best practice among regulators for electronic communications, prepares opinions and views about various regulatory questions for the need of the European Commission and Council – on their request or independently. The Agency for Electronic Communications and Postal Services, as a national regulatory authority from Montenegro joined BEREC and gained the observer status in September 2011, which was confirmed by its signing of the Declaration of Commitment at the BEREC General Assembly held in Barcelona. It has had this status since gaining the status of a candidate for EU membership. BEREC has the Board of Regulators (BoR) and Management Committee (MC). When preparing decisions to be adopted by the Board of Regulators, the Board is assisted by a working group (Contact Network – CN), which includes senior representatives of all members. Plenary sessions of the BoR and MC are held four times a year, as back-to-back events.
25 Conference Preparatory Meeting26 World Radiocommuniction Conference
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Recognizing the importance that electronic communication services have for social and economic welfare, and taking account of a common base for plans and programs, and willingness to have regular contacts and develop practical cooperation in issues related to electronic communication services and to the exchange of information, experience and documentation referring to development of regulation in electronic communication services, during 2011 the Agency signed the Memorandum of Understanding in the field of electronic communications with national regulatory authorities from Croatia, Turkey and Macedonia, and the Memorandum on cooperation in postal affairs with the regulatory authority from Serbia.
Perennial cooperation with Cullen International from Brussels also continued. A new three-year contract on assistance in the implementation of the Project of Monitoring and Development of the markets of electronic communications and information about social services was awarded by the European Commission to Cullen International after a public tender. The main objective of the project is to help progress in monitoring by each country from the South East Europe, in line with the integration of the EU internal markets for electronic communications and information of social services. During last year the first Cullen International Forum was held in Tirana in the period from 26 to 28 September. The Forum discussed the topics defined in a preliminary meeting in Brussels on 31. 03. 2011 (according to the new European methodology for data collection and processing) and monitored the progress that nine countries from the Enlargement had achieved in relation with alignment of their legislation, law enforcement and implementation, as well as capabilities, transparency and independence of NRAs in the monitoring of regulatory and market developments. Cullen International will prepare a periodical Status Reports, which will present a large range of actual information and regulations in national markets, and the information about how markets are regulated in Montenegro, Serbia, Kosovo, Macedonia, Albania, Bosnia and Herzegovina, Croatia and Turkey.
In the beginning of 2011, the Agency made a Grant Agreement with the EU Delegation in Montenegro concerning the participation in a regional project of Digital television in the South East Europe(SEEDigi.TV),whichhasbeenimplementedundertheauspices of the Transnational East-European cooperation for the period 2007 – 2013, and financially supported from the EU structural funds ERDF, IPA and ENPI. In addition to this Agency, the Agency for Electronic Media is also included in this project with the same status. During 2011 the representatives of the Agency had significant participation in this project whose
objective is a harmonization of legal, economic and technical aspects of digitalization, as well as of the framework which has to ensure quality information of consumers and the protection of their interests.
On 1 December 2011, the European Commission – General Directorate for Enlargement organized in Brussels a TAIEX Seminar on the issue of postal services (TAIEX-ref 47018), which was attended by the representatives of relevant ministries and national regulatory authorities from the countries of the Western Balkans region. The Seminar was organized with a view of helping the participants to solve the problems and dilemmas which might arise in the process of alignment of national legislation with the EU acquis and the problems of establishing specific institutional structures in the field of postal services. The representatives of the Agency attended the Seminar as members of Montenegrin delegation. The Seminar was interactive, as during discussions and exchange of experience among the countries, many institutional and regulatory issues were discussed, which referred to independence in the postal service market, abolition of privileges in terms of a reserved postal service, pricing and the methodology of pricing and systems for accountancy keeping, better quality of postal services. General Directorate for internal markets and services organized individual bilateral talks of interested delegations with an expert of the European Commission responsible for harmonization with European legislation in the field of postal services.
5.12. Survey about the use of information and communication technologies in Montenegro
The survey about the use of information and communications technologies in Montenegro for the purposes of the Agency for Electronic Communications and Postal Services was carried out by DeFacto Consultancy expert team. The survey was carried out in the period from 1 to 28 February 2011. The methodology of research was adjusted to the prescribed methodology used by EUROSTAT, after the amendments made in 2008. Within this survey, another survey was also made referring to user satisfaction with the services of fixed telephony, mobile telephony, Internet anddistributionofTVprograms.
The information about the use of ICT by individuals and households was collected through a representative sample of 1503 respondents.
The main characteristic of the sample was the choice based on multilevel random sampling procedure, which enabled that a standardstatisticalerrorwas+/-2.53%witha95%confidenceintervalforthedistributionof50%.AccordingtoEUROSTATmethodology, the survey comprised:
• Individualsagedfrom16to74• Householdsinwhichatleastonemember
was aged between 16 and 74.
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For the purpose of carrying out a survey of enterprises, a sample of 500 enterprises was selected. The base for the sample was the data of the Union of Employers and of the Business Registry of Companies. The sample was four-fold stratified with a random sample of companies within the defined stratums. The criteria for stratification were: size, number of employees, type of ownership and regional distribution.
After the completion of the survey, the results gained were presented to the public in a press conference. A publication containing the results of the survey was delivered to the government authorities, local governments, local self-governments, the Chamber of Commerce of Montenegro, printed and electronic media, University units, organizations for user protection and to regulatory authorities for electronic communications in neighbouring countries. The survey can be found in full at the Agency’s website, www.ekip.me, in the section Reports. The text below contains only the information from the survey referring to electronic communication services.
Fixed telephony
72.2%respondentsstatedtheyhadafixedtelephonelineintheir households. Among those who had no telephone lines, 75%statedthattheyusedamobilephoneinsteadofthefixedone,and20%answeredthatinstallationofthefixedlinewasnottechnicallyfeasible.5.1%respondentshavechangedthefixedtelephonyprovider.85.5%respondentshavebeensatisfiedwith the quality of service. In relation with specific services, thegreatestsatisfaction(90.8%)referstolocalcallsandthegreatestdissatisfaction(48.2%)tovalue-addedservices.63.5%respondentshavebeensatisfiedwithserviceprices.13.7%respondents would change their fixed telephony provider if theycouldkeeptheirpresentnumber.79.1%respondentswhohave used the service of call centers have been satisfied with thatservice.Concerningthatservice,28.8%respondentshavebeen most dissatisfied with waiting time for answers.
94.6%respondentshaveanactivemobiletelephonenumber,outofwhom52%respondentshaveonenumber,26.7%twonumbersand15.9%morethantwomobiletelephonenumbers.Only5.4%respondentshavenoactivemobiletelephonenumber.Voiceserviceshavebeenusedmostly(92.1%),thenfollowedSMS-MMSmessages(70.3%),andInternetaccess(20%).Only7.7%respondentshaveusedvideocalls.Therespondentshavebeen mostly satisfied with voice services and SMS-MMS (over 90%),andtheleastsatisfiedwithvideocalls(40.3%).90.6%havebeensatisfiedwithcustomersupportservice,but22%
respondents have been mostly dissatisfied with waiting time foranswerstothem.40.8%respondentshaveusedroamingservices,outofwhom23.9%havebeensatisfiedwiththem,while59.6%thinktheytheirpricesaretoohigh.32.4%respondentshavechangedtheirmobileoperatorsofar.9.3%respondentswould change their mobile operator if they could keep their present number.
TV program distributors
58.9%respondentsusetheservicesofTVprogramproviders.77.2%respondentsaresatisfiedwiththeofferand80.9%withprices.
Use of computers and Internet access
66.5%respondentshavecomputeraccessathomeand59.3%have Internet access, regardless of whether they use it or not. Out of respondents who have access, but do not have Internet accessathome,34.8%haveexplainedthatthereasonisthelackofknowledgehowtouseit,32.1%answeredthatInternetisexpensive,and26.3%thattheequipmentnecessaryforInternetaccessisexpensive.55.6%householdshaveADSLconnection,and29.4%usedial-upconnection.Inlastthreemonths,theInternethasbeenusedby54.1%respondents.Outofthatnumber,71.6%useInterneteverydayoralmosteveryday.39.5%respondentshaveneverusedthe Internet. Out of the respondents who use the Internet, the largestnumberofthem,i.e.89%,useitathome.TheInternetismostlyusedfore-mailing(67.6%),readingnews(51.9%),accesstosocialnetworks,chatting(49.5%)andfortelephoning(41.3%).86.1%respondentsaresatisfiedwiththequalityoftheInternetservice,while69.2%aresatisfiedwithprices.52.1%thinkthatthereshouldbemoreInternetproviders.81.7%respondentsaresatisfiedwiththeserviceofcustomersupport,while26.4%respondents are dissatisfied with waiting time for answers.InJanuary2011,96.3%ofcompaniescoveredbythesurveyusedcomputersindoingbusiness,and55.9%ofemployeesused their computer at least once a week. In January 2011, 94.9%companieshadInternetaccess,and54.5%employeesusedacomputerwithInternetaccess.89.5%companieshadADSL connection.
5.13. Development of human resources
According to the Rulebook on work organization and job classification in the Agency for Electronic Communications and Postal Services, which was adopted by the Agency Council, the Agency for Electronic Communications and Postal Services organizes the work of its services through the work of departments, divisions and units.
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There are the following organization units within the Agency:• LegalDepartment• EconomicDepartment• ElectronicNetworksandServiceDepartment• Radio-communicationDepartment• PostalAffairsDepartment;• UnitforGeneralMatters,and• SupervisionDivision,
Departments and Unit are organized through internal organization units – sections, as illustrated by the following Figure:
The administrative capacities of the Agency for Electronic Communications and Postal Services are on a high level and it should be noted that according to the mentioned Rulebook on work organization and job classification in the Agency for Electronic Communications and Postal Services, all employees are obliged to develop professional skills for the purpose of better performance of their tasks and duties which fall within the scope of their jobs. Permanent professional development of employees with regard to new technological solutions in the fields of electronic communications, radio-communication and postal services, is achieved through participation in scientific events, seminars and conferences, and work in working groups under the auspices of ITU, CEPT, BEREC, etc. and organization of international expert meetings.
At the end of 2011, the Agency had 68 employees: 4 Council members (the President and three Members), Executive Director and 63 staff members. The qualification structure of employees was as follows:
• PhDdegree-2employees,• MAdegree-2employees,• B.Sc.inElectricalEngineering-24employees,• B.Sc.inEconomics-13employees• BLL-8employees• BA–inEnglishLanguage-1employee,• B.Sc.inCivilEngineering-1employee,• Spec.Sci.inElectricalEngineering–4employees,• HigherEducation-1employee,• SecondarySchoolEducation-12employees.
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5.14. European Integrations – Chapter 10: Information Society and Media
During 2011, the representatives of the Agency for Electronic Communications and Postal Services participated in activities in the process of European integrations related to Chapter 10 „Information society and media“.
In the beginning of April 2011, the representatives of the Agency took part in the preparation of material and direct presentation of the state in the market of electronic communications in the meeting of Sub-Committee for innovations, human resources, information society and social policy in Brussels. Operational conclusions by the above mentioned Sub-Committee which referred to the Agency’s work and role, were presented through the Report of the meeting by the following wording: „Further, Montenegro informed about universal services, tariff rebalancing, market analysis and number portability. The Commission noted that progress in creating conditions for a competitive market had been made, but further efforts are needed, so the Commission encouraged Montenegro to put higher priority on enforcement and implementation.. The Commission positively assessed the work of the Agency for Electronic Communications and Postal Services (EKIP), particularly in relation with user protection, and reminded Montenegro to maintain the independence of the Agency“.
The evidence on the progress Montenegro has made in this area can be found in evaluations of the European Commission in the Report on Montenegro progress in 2011 (Brussels, 12. 10. 2011), where it was stated: “The Regulator, Agency for Electronic Communications and Postal Services (EKIP), has built its administrative capacities and has sufficient resources to carry out its tasks. EKIP has developed its activities in terms of adoption and implementation of legislation, preparations for market analysis and making decisions on significant market power (SMP). It has significantly stepped up its work on user protection issue, forcing operators to strictly follow the law and publish tariffs and general conditions. One undertaking has been selected as universal services provider for the period of 5 years, and another one to provide the universal telephone directory and enquiry service. The number of complaints against the Agency’s decisions has increased. The majority of decisions have been confirmed in appeal procedures.
During 2011, the Agency prepared documents on progress in electronic communications on quarterly basis in order to keep closer to the adoption of the EU Acquis by Montenegro in that field, i.e., to the obligations referred to in Article 106 of the Stabilization and Association Agreement between the European Community and its Member States and Montenegro relating to networks and services of electronic communications.
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6. POSTAL SERVICE MARKET
6.1. Regulation of postal service market
According to data obtained from annual reports of registered postal operators, more than 15 million of various postal services were provided in the market of postal services in Montenegro in 2011, which was also the case in 2010.
6.1.1. Montenegro PostThe performed physical volume of services rendered by Montenegro Post in 2011 compared to 2010 is given in the Table below:
TYPE OF SERVICE Performance in 2011 Performance in 2010 Index (11/10)
MAILINGSERVICES 7,068,573 6,971,955 104.4 PACKAGESERVICES-PARCELS 10,018 11,879 84.3 EXPRESSSERVICES 18,502 21,693 85.3 SERVICESOFMONEYOPERATIONS 7,002,567 7,147,460 98.0 SUPPLEMENTARYSERVICES 343,617 359,300 95.6 TELEGRAPHICSERVICES 171,967 203,376 84.6 TELEPHONESERVICES 252,247 262,473 96.1
The Figure below contains the physical volume of services rendered by Montenegro Post in 2011 compared to 2010:
SUPPLEMENTARY
SERVICESTELEGRAPHIC
SERVICES
TELEPHONE SERVICES
EX PRESS SERVICES
SERVICES OF M
ONEY
OPERATIONS
PACKAGE SERVICES
01.000.0002.000.0003.000.0004.000.0005.000.0006.000.0007.000.0008.000.000
2011
2010
MAILING SERVICES
The physical volume of services in 2011 was smaller in almost all segments, except for mailing services, whose volume was by 1.4%biggerincomparisonwith2010.Thedownwardtrendinphysicalvolumeofservicescouldalsobeseenintheservicesofmoneyoperations,wherethegeneratedphysicalvolumewasby2%smallerthanin2010.Thephysicalvolumeoftelephoneandtelegraphicservicesalsorecordedafallof3.9%and15.4%respectivelycomparedto2010.
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The Figure below shows the structure of generated physical volume of services provided by Montenegro Post.
Mailing services 47,54%
Telephone services 1,70%
Package services 0,07%
Express services 0,13% Supplementary services 2,31%
Telegraphic services 1,16%
Services of moneyoperations 47,09%
In the structure of physical volume of services, mailing services and the services of money operations had the biggest shares (47.54%and47.09%respectively).
Financial indicators of Montenegro Post
Revenue
ITEM 2010 2011I. OPERATING INCOME 11,619,383 12,164,031
1. Income from service sale- UPS 10,860,795 11,397,538
POSTALSERVICES 5,598,245 5,864,750
MONEY ORDERS 1,628,441 1,493,103
MONEY OPERATIONS 2,241,354 2,501,220
TELEGRAPHSERVICE 605,053 558,812
PUBLICPAY-PHONESERVICES 271,516 199,877
HYBRIDMAILSERVICES 346,060 397,711
OTHERSERVICES 170,126 382,065
2. Income from service sale - MPS 554,213 576,538
POSTALSERVICES 317,252 313,870 313,870
TELEGRAPHSERVICES 66,803 63,114 63,114
INTERNATIONAL COMPUTATION 170,157 199,554 199,554
3. Income from goods sale 204,375 189,955
II. OTHER OPERATING INCOME 4,729,274 2,645.783
III. FINANCIAL INCOME 156,491 118,118
I-III. TOTAL REVENUE 16,505,148 14,927,931
TherevenuesoftheMontenegroPostearnedin2011amountedto14.927.932.00€andwereby9.6%smallerincomparisonwith the revenues raised in 2010.
Theoperatingrevenueearnedin2011wasby4.7%biggerthantherevenuein2010.
Postalserviceshadthebiggestshareintotaloperatingrevenue(39.3%).
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Expenditures
ITEM 2010 2011
I OPERATING COSTS 15,172,237 14,830,724
1. DIRECT COSTS OF GOODS AND MATERIAL 14,830,724 14.195.874
2. LABOUR COSTS 1,069,758 1,117,168
3. DEPRECIATION COSTS 9,682,754 9,270,547
4. OTHER OPERATING COSTS 600,865 598,996
II FINANCIAL COSTS 25,482 15,529
III TOTAL EXPENDITURES 14,856,206 14,211,403
Theexpendituresin2011amountedto14.211.403.00€andwereby4.3%smallerthanin2010.Thebiggestshareintotalexpenditureshadlabourcosts(65.2%).
Montenegro Post achieved a positive financial result in 2011, earning the profit of 716,529.00 €.
The capital of Montenegro Post is the state capital and it amounted to 36.986.789.00 € as of 31. 12. 2011, which was by 2,356,231.00 € more than in previous year. The main cause of the increase was the effects of a retroactive correction of material misstatements and changes in accounting policies.
6.1.2. Other postal operatorsIn addition to Montenegro Post, the following operators were also present in the postal service market:
• ‘’KingscliffeDistributionMontenegro’’(DHL);• ‘’CityExpress’’–PodgoricaOffice;• „RheaExpress“d.o.o.Podgorica-Fedex;• „MontenomaksControl&Logistics“;• „TimKop“-(TNT);• „ExpressCourier“-(UPS)
The structure of revenues gained by other postal operators in 2011 compared to 2010 is shown in the following Figure:
0%10%20%30%40%50%60%70%
2011
2010
In2011therevenueofotherpostaloperatorsroseby51%incomparisonwith2010.
The Figure below presents market shares of other operators in the market of postal services, excluding Montenegro Post.
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DHL 62%
FEDEX 7%
TNT 12%
CITY 14%
UPS 3%
MONTENOMAKS 2%
Amongotherpostaloperatorsinthemarket,theleadingpositionwasoccupiedbyDHLwith62%,CityExpresswith14%,TNTwith12%,Fedexwith7%,Montenomakswith2%andUPS3%marketshare.
6.1.3. Montenegro Post and other operatorsMarket shares of operators in the market of postal services are given in the Figure below:
OTHER OPERATORS 3%
MONTENEGRO POST 97%
Montenegro Post, as the Universal Postal Operator, still has a significant market share and plays a dominant part in the market ofpostalservices.However,thesharesofotherpostalserviceoperatorsin2011roseby2%comparedtopreviousyear.
Market shares of operators in the market of express services are given in the Figure below.
CITY EXPRESS 49%
MONTENOMAKS 16%
UPS 6%
FEDEX 3%Montenegro Post 14%
TNT 5%
DHL 7%
In providing express services, other operators have a dominant part compared to Montenegro Post, so the situation is like this:CityExpress49%,Montenomaks16%,MontenegroPost14%,DHL7%,UPS6%,TNT5%andFedex3%.
The Figure below shows market shares of operators in the market of parcel services:
CITY EXSPRESS 82%
UPS 0%
MONTENOMAKS 3%
FEDEX 2% Montenegro Post 9%
TNT 2%
DHL 2%
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TheleadingpositioninthemarketofparcelserviceswasoccupiedbyCityExpresswith82%,beingfollowedbyMontenegroPost9%,Montenomaks3%,DHL2%,Fedex2%,TNT2%andUPS0.45%.
If postal operators in Montenegro want to maintain or increase demand for their services, they have to offer innovative services in the period to come, and to improve the provision of current postal services, finding a way to reduce prices of some products and services. Postal operators will have to get more and more adjusted to specific needs of postal service users.
Business strategies and plans of postal operators, particularly of the universal postal operator, which is obliged to provide the universal postal services, shall also be based on changes, which will take place after the envisaged full opening of the postal service market starting from 01. 01. 2013.
6.2. Quality of provision of universal postal service
One of the principles underlying the regulation of relations in the postal services is providing quality and implementation of standards in carrying out postal services.
The quality of universal postal service includes the measures of quality related to all phases of the technological process of providing universal postal service, which providers of a universal postal service shall ensure to users of postal services.
The quality of postal services provision ensures a competitive advantage in the postal service market and consumer confidence.
The Rulebook on general conditions for rendering postal services (“Official Gazette of Montenegro”, No. 29/06) sets the standards of quality in domestic and international postal services, where it is pointed out, inter alia, that the quality of the provisionofuniversalqualitypostalservicemeansdelivering95%ofpostalitemsinthenationalpostalservicewithintheprescribed deadlines. What is meant under the terms of delivery of postal items is the time from the receipt of postal items up to their delivery. The postal operator shall deliver postal items within the period of three working days.
TheinternationalpostaltrafficwiththecountriesoftheEuropeanUnionshallensurethetransferofapproximately85%oftheletterswithintheperiodofthreeworkingdaysand97%upto5workingdays.
The deadlines for the transfer of items in international postal services depend on the distance of the receiving state, transport links and quality standards of national operators of universal postal services.
During 2011, Montenegrin Post completed control and measurement of the quality of transfer of postal items in three segments:
•Measuringthequalityofthetransferofordinaryletters;•Measuringthequalityoftransferofrecordedpostalitemsindomesticpostaltraffic;•Measuringthequalityoftransferofregisteredpostalitemsfrominternationalincomingtraffic.
6.2.1. Measuring the quality in transferring ordinary letters in the national postal trafficControl and measurement of the quality of transfer and delivery of ordinary postal items were implemented in two ways:
a) by photographing ordinary postal items in the Postal Center and checking the time of their delivery at postal units, and
b) by throwing different types of ordinary postal items in mailboxes, and monitoring their delivery.
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Quality control of the transfer and delivery of ordinary postal items is given in the following table.
Time of transfer and delivery Number of items %
1 day 87 45.1%
2 days 75 38.9%
3 days 24 12.4%
Total up to 3 days 186 96.4%
From 4 to 5 days 3 1.5%
More than 5 days 4 2.1%
Total more than 3 days 7 3.6%
Total sample 193 100%
Outof193ordinarypostalitems,186itemsor96.4%wasdeliveredwithinthreedays,whichwasabovethegoalprescribedfor this standard (Article 56 of the Rulebook on general conditions for carrying out postal services).
The quality of delivery improved compared to the results of measuring conducted in 2010 for the standards of quality J+1 and J+2.
- forstandardJ+1,thevalueachievedlastyearwas31%,andthisyearitwas45.1%.- forstandardJ+2thevalueachievedlastyearwas30%,andthisyearitwas38.9%.
Control of discharge of postal mailboxes
The control of discharge of postal mailboxes was carried out in June 2011. The subject of control was accuracy, appearance, regularity of discharge, time of discharge and transfer speed of ordinary items received in this way.
The table below refers to the ordinary letters thrown into the mailbox, and it shows the speed of transfer of these items.
Up to 3 days More than 3 days Not taken out
Number of items 42 30 10 2
Numberofitemsin% 100% 71.4% 23.8% 4.8%
The results of these controls showed that out of 42 items thrown into mailboxes, 40 was taken out of mailboxes, while two items were taken after the warning of the Department of Quality and Internal Control office (mail franchise posts of RijekaCrnojevića and Bioče). It was also found that throughout the system mailboxes were poorly maintained or not maintained at all.
In future, Montenegro Post, following the example of the networks and systems of the EU countries, shall pay greater attention to maintaining existing and installing new mailboxes, as well as to modernization of appearance of the existing mailboxes.
6.2.2. Measuring the quality in transferring recorded postal items in domestic postal trafficBasedonasampleof22,665ofrecordedpostalitems,itwasfoundthat95.70%postalitemsweredeliveredwithinthreedays,whichmeansthatfortheprescribedstandardJ+3thequalityof95%wasachievedindomesticpostaltraffic,incompliancewith Articles 56 and 58 of the Rulebook on general conditions for providing postal services.
Sample Up to 3 days More than 3 days
Number of items 22,665 21,689 976
Numberofitemsin% 100% 95.70% 4.30%
The sample of 22.665 recorded postal items was taken from the database of “Track and Trace Montenegro Post”, for the period of 06 - 20. 06. 2010.
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6.2.3. Measuring the quality of transferring registered postal items in international incoming trafficThis measure, which checks the quality of the transfer of registered items that come from international traffic, Montenegro Post still does not carry out from end to end (from the place of shipment to the place of receipt), as required by international standards. It is done in such a way that at least one segment of time can be observed in which international postal items are delivered in Montenegro. There are still no valid data about the time from the receipt of a postal item abroad up to its arrival in Montenegro. Due to such incomplete information it is not possible to assess the quality of transfer of postal items in international traffic compared to the standard and quality objectives prescribed by Article 56 of the Rulebook on general conditions for providing postal services.
Sample – number of postal items Up to 3 days Up to 5 days More than 5 days
276 265 8 3
100% 96% 2.9% 1.1%
Theresultsofmeasuringthequalityoftransferofregisteredpostalitemsfrominternationalincomingtrafficshowthat96%ofitemsaredeliveredwithinthreedays,2.9%moreisdeliveredwithinfivedays,whichmakes98.9%ofallitems,whiletheremaining1.1%ofitemsininternationalisdeliveredinmorethanfivedays.
6.2.4. Received and resolved inquiries in domestic and internationalThetotalnumberofreceivedenquiriesindomestictrafficamountedto923.Outofthatnumber921,i.e.99.8%,wasresolved(positive answer 883, negative answer 38), while there were 2 unsolved cases (the indicated cause was the change of address).
Ininternationaltraffic,thenumberofenquiriesreceivedin2011was313.All313enquiries,i.e.100%,weresolved(positiveanswer 280, negative answer 33).
