BROADBAND DEVELOPMENT IN THE REPUBLIC OF SERBIA - current status and perspectives -

1. BROADBAND DEVELOPMENT IN THE REPUBLIC OF SERBIA- current status and perspectives - Dr Milan Janković Director, RATEL

2. ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

3. MARKET OVERVIEW ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

4. INTERNET Source: RATEL (Annual reports submitted by the operators on 31 December for each of the respective years) ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

5. STRATEGIC GOALS - SERBIA • Enhancement of competition within the electronic communications market • Implementation of new technologies • Digital television –ASO • 4G mobile technology – LTE • Fiber To The Home – FTTH, etc. • The aim of the Strategy for the Development of Broadband in the Republic of Serbia until 2012 is a 20% broadband penetration rate • (the total of 1.2 million connections) • 4Mb/s in fixed networks • 512kb/s in mobile networks • Efficient management of the radio frequency spectrum (digital dividend) ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

6. PROJECTED ECONOMIC BENEFIT IN 2020 Source: BCG Study (The Boston Consulting Group) 2010. ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

7. ICT DEVELOPMENT INDEX – IDI • This Index combines 11 indicators divided into three sub-indices: • ICT infrastructure and access • ICT use (primarily by individuals, but also households and undertakings) and the intensity of use • ICTskills (or human capacity necessary for the effective use of ICTs) Source: RATEL ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

8. Why build the NATIONAL BROADBAND NETWORK? How to build the NATIONAL BROADBAND NETWORK? What innovations should the design of the NATIONAL BROADBAND NETWORK include? ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

9. Stimulate innovation +2-3% +5-10% -5% +1.3% Productivity Employment rate CO2 emission Gross national income + 10% Broadband penetration ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

10. How to build the NATIONAL BROADBAND NETWORK (NBN)? Goals Technology Regulation Financing • Coverage • Bitrate • Social and economic advantages FTTx, Wireless/satellite technology selection based on technical and economic analysis • Transparent work • Fair competition • Guaranteed coverage • Government budget • Bank loans • Supplier credit • Public/private partnership NBN project Establish a new company to build NBN? • First layer: open access passive network • Second layer: open access passive network • Interconnection points • Level playing field • Reasonable profit and return on investment (ROI) • Affordable prices • Efficient investments Open access Business plan Operation model ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

11. Innovations in NBN designMulti-layer open access model Local governments offering a network will sell bandwidth to communication operators wholesale and service providers retail, instead of doing business with private persons. Infrastructure operators offering passive network (dark fiber) Operators offering active network (wholesale access) Service operators offering innovative services such as IPTV, with end-users By applying this model, the NBN developers can further be divided as follows: The main role of the state: Create Universal coverage Open access Fair competition Stimulate cooperation through partnerships (private/public sector...) Service Utility player Vertical service operator RSP RSP Bitrate RSP Optical fiber Infrastructure operator (mainly local governments) Underground infrastructure Access right ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

12. B&H Bulgaria Hungary • Operators are the owners of both old and new cable ducts • Incumbent operator BTC is required to: • - provide access to the physical infrastructure (and local loop) to other operators • - publish standard offer • Cable duct owners: • - Operators • - Private companies • - Local government institutions • - State companies • No difference between old and new infrastructure • Cable duct ownership • (no specific regulation) • Operators who invested in the construction are the owners of the newly built infrastructure 1. Are cable ducts the property of the state or operators? Are there any differences regarding property issues in terms of the „old“ and the newly built infrastructure? • Operators own the major part of the infrastructure • No difference between old and new infrastructure • Cable duct owners • - mainly operators (Crnogorski • Telekom dominant) • - local self-governments to a smaller extent • - Montenegrin Railways • Ownership over and usage of the new cable ducts defined by contracts with investors • Cable duct ownership irrelevant • Anyone with free space in the communications infrastructure has the status of infrastructure operator with the obligation to provide access to other operators, charging for the lease • No difference between old and new infrastructure Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

13. B&H Bulgaria Hungary • Possibilities: • - concessions • - permanent lease • - temporary lease • LSGs in charge of granting building permits • No time framework for the right to use cable ducts • Public operator can build – municipality permit (pursuant to the building regulation) • Concessions do not apply • (liberal market model) • Communications network operators • have the right to build a network on, above or under private/state land pursuant to • - Law on Electronic Communications • - Law on Roads • - Law on Spatial Planning 2. Under what conditions is the state-owned property (streets, road passages, land in the vicinity of railways, etc.) used for building cable ducts (concessions, permanent or temporary lease)? Who is in charge of granting requests for building and in accordance with which by-laws? • Building requirements stipulated under Law on Environment Protection • Local self-governments in charge of granting building permits • Building regulated by: • - Law on Roads • - Law on Railways • Building regulated by: • - Law on Spatial Planning and Building • - Rules on technical requirements for cable ducts (HAKOM) • - Law on Electronic Communications (Right of Way) • - Rules on right of way authorization and fee – right of way authorization issued (HAKOM) Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

14. B&H Bulgaria Hungary • The owner of OPGW cables is the state-owned electrical power company OVIT • Electronic communications operators are using optic fibres • Prices, terms and conditions of use are determined by contracts with OVIT • The owner of OPGW cables is NEK EAD, the operator of the national high-voltage electric transmission network (100% state-owned) • NEK EAD is planning to lease communication network services on commercial terms • Approved by the Ministry of Economy and Energetics • Electric power companies are the owners • Usage for the telecommunications purposes requires a Public Network Operator General Authorization 3. Who is the owner of OPGW cable fibres? Are the fibres available to electronic communications operators? Who is in charge of determining the price and terms and conditions of use? • Owned by HEP (electric power company) • Prices, terms and conditions for lease of networks to electronic communications operators are determined by HEP and other owners of telecom infrastructure • Owned by: • - CGES (55% state-owned electric power company) • - registered public fixed electronic communications network operator and dark fiber and leased lines service provider • Prices, terms and conditions have to be publicly available • APEK regulates the usage of optical (FTTH) network owned by the incumbent operator • Other owners of optical networks are leasing the infrastructure on commercial terms Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

15. B&H Bulgaria Hungary • Right to build networks, including duct infrastructure • Right to grant building • When cable ducts and passive (optical) infrastructure are owned by local self-governments, they have to create licensing requirements • They are given all rights stipulated under the regulations on building, urban and spatial planning • Usage and leasing of built telecom infrastructure are subject to operator’s discretion (permit granted by RAK) 4. What rights are granted to local self-governments (LSGs) in relation to building and use of cable ducts and passive (optical) infrastructure? • Anyone, including the local self-governments, can invest in optical infrastructure • LSGs can use the ducts of other infrastructure operators without the obligation to provide access • If LSGs wish to provide access, they need to register as operators • No special rights • Local self-governments are building optical infrastructure with the support of • - public EU funds • - public/private partnerships • LSGs can build communications networks pursuant to • - Law on Electronic Communications • - Law on Spatial Planning and Building • Operators can build alone or together with LSGs (in the latter case the network is owned by LSG, whereas the operator enjoys preferential terms of usage for a while) Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

16. B&H Bulgaria Hungary • Both private and state companies are subject to the Law on Telecommunications • Some communications operators use duct infrastructure of the private electric power companies on commercial terms • There is no regulation so far • The usage of the infrastructure owned by state operators is defined by lease contracts • Telecom infrastructure owned by state companies can be used with the General authorization for public network operator issued by RAK • It is the founders of the legal entity that decide on the right to perform additional business activities, not RAK 5. What are the terms and conditions of use of the infrastructure owned by state operators (electric power industry, railways, gas pipeline) who are not engaged in providing electronic communications services (power masts, facilities)? • Building is subject to: • - Law on electronic Communications • - Rules on manner and terms and conditions for access to and shared usage of electronic communications infrastructure and associated equipment • All infrastructure operators have the obligation to lease available capacities • No obligations • State operators can offer their infrastructure on commercial basis • Terms and conditions are determined by the infrastructure owners/operators • Operators are using the infrastructure based on commercial agreements Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

17. Bulgaria B&H Hungary • Yes – There is a national state network connecting almost all national and local authorities. • The national state network is managed and developed by the Executive Agency for Electronic Communications Networks and Information Systems (with the Ministry of Transport and ICT) • Capacities of state operators are also used pursuant to the Law on Public Procurement • No • There is a private telecom network using the capacities of public operators, for the purpose of connecting LSG units and state institutions • javnih operatora • No • Establishing a special network is possible, yet there is no adequate legal entity registered for telecommunications to which RAK could grant a permit 6. Does the state, apart from the needs of the army and police, have a public communications network (state telecommunications infrastructure) for the purpose of connecting local self-government units, schools and health centres, or does it use the capacities of public operators? • No • There is no state telecom infrastructure, apart form the one owned or majority owned by state companies • No • There is a public network for connecting academic institutions (ARNES) • The state uses mostly the capacities of public operators • No • Public institutions communicate exclusively through services of the public telecom networks Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

18. B&H Bulgaria Hungary • Prices, terms and conditions of access to and use of the duct infrastructure of the incumbent BTC are regulated under a Reference offer to be adopted by the Communications Regulation Commission • The major problem is related to the laying of unshielded optical cables in ducts by alternative operators, not allowed by BTC • The Market Decisions in Market 4 are new • RUO procedure is underway • Therefore there are no problems encountered in praxis yet • Disloyal competition • Obstructions between operators regarding building and operation of telecom networks • To a smaller extent LSGs in the implementation of the building regulations 7. Please state the relevant problems your Agency often encounters in relation to infrastructure. • No disputes between operators regarding the shared usage of telecom ducts (remedied by HAKOM’s Rules) • The major problem is the establishing of regulatory framework stimulating the investments in the infrastructure • None. • Lack of data • There is a need for a data base on the communication infrastructure, in particular on cable ducts Slovenia Croatia Montenegro ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

19. PUBLIC ENTERPRISE ELECTRIC POWER INDUSTRY OF SERBIA (“ELEKTROPRIVREDA SRBIJE”) Schematic design of the new telecom network locations and capacity Optical network ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

20. PUBLIC ENTERPRISE ELECTRIC NETWORKS OF SERBIA (“ELEKTROMREŽA SRBIJE”) European electric power line telecom network Optical telecom system (late 2010) ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

21. PUBLIC ENTERPRISE SERBIAN RAILWAYS (“ŽELEZNICE SRBIJE”) Circuit-Switching network Transmission systems ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

22. ACADEMIC NETWORK OF THE REPUBLIC OF SERBIA - AMRES Leased long-distance optical lines Current state Long-distance lines optical infrastructure SEELight Project ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

23. NATIONAL BROADBAND NETWORKservices mean improvement PUBLIC SECURITY ECONOMY • Strategically located IP cameras provide surveillance of the activities in the street • Coordination of traffic signalling • - reduces congestion • - helps evacuation • - enables traffic video surveillance • Reduces digital divide by enabling broadband access in underdeveloped areas • Promotes tourism by enabling open access to information on the go • Meets the economic and trade needs for infrastructure in a more efficient way HEALTH EDUCATION • Doctors and caretakers can access single database of patients online • Medical tests will be available to doctors and patients online • Emergence services can access patients database online • Students can: • - follow distant learning classes • - cooperate in preparation of video and audio learning materials • Parents, students and professors can critically assess teaching plans, tasks and performance online ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

24. NATIONAL BROADBAND NETWORK introduces new lifestyle Enjoy quality entertainment anytime on any platform • Watch high resolution video on demand any time • Participate in a performance real time from home • Play virtual real time games with anyone in the world • Download music or other contents immediately Greater possibilities for shopping and trade Entertainment • Virtual online shops with real time chat and video • Receive advice from salespersons or experts in real time (e.g. cosmetics) Trade Cooperation Communication Work with anyone, anywhere, anytime • Work from home when desired and video calls with colleagues from home or office • Collaboration on difficult tasks with colleagues abroad, from a distant hotel • Schooling via virtual classroom during illness Communication with anyone in the virtual community • Video calls with family as if you were in the same room • Chat and share photos or videos with friends • Possibility to reach interest group in the virtual community • Participate in the discussion with a class from another school ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

25. THE FUTURE BUILT ON BROADBAND “Governments need to raise broadband to the top of the development agenda, so that rollout is accelerated and the benefits are brought to as many people as possible.” Dr Hamadoun Toure- ITU Secretary General International Telecommunication Union (ITU) and UNESCO published the report in English, French, Spanish, Russian, Chineseand Arab Republic Agency for Electronic Communications of the Republic of Serbia (RATEL) published the report in Serbian www.ratel.rs ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania

26. THANK YOU FOR YOUR ATTENTION Republic Agency for Electronic Communications (RATEL) Višnjićeva 8 11000 Beograd Republika Srbija Contact centre & fax: +381 11 3242 673 Fax: +381 11 3232 537 www.ratel.rs ratel@ratel.rs Dr Milan Janković milan.jankovic@ratel.rs ITU Regional Forum for Europe on Broadband, September 2012, Tirana, Republic of Albania