electronic broadband communications in Romania for the period 2009-2015 On the grounds of art. 108 in Romania†s Constitution
electronic broadband communications in Romania for the period 2009 †2015 provisioned for in the annex that is an integral part of this decision
communications in Romania for the period 2009-2015 CONTENT I. INTRODUCTORY PART€ †††††††††††††††††â€
I. 2 Anticipated advantages for the development of broadband communication services††II. CURRENT SITUATION ANALYSIS ††††††††††††â€
II. 1 Overview on the existing situation on broadband communication services market II. 2 SWOT Analysis †††††††††††††††â€
V FINANCIAL DEMAND AND OPTIONS †††††††††â€
IV. 1 Financial demand for the development program of broadband communication services ††††††††††††††††††â€
†††IV. 2 Financing means†VI GLOSSARY OF USED TERMS AND ABBREVIATIONS †â€
Electronic broadband communications have become a world †wide priority in late 1990s, as a result of the fact that a society based on knowledge has a
significant impact on competitiveness, on the rapid development of communications and IT technologies as well as on telecom markets liberalization
Economy competitiveness. This vision, formulated after the European council in Lisbon, in 2000 (Lisbon strategy) intended to outline the main directions of strategies
of European population ageing as well as by a fierce competition globally In achieving the fundamental objectives of Lisbon Strategy †sustaining
economic growth and creation of new working places †one of the main instruments identified was the development of a knowledge based economy corroborated with
incentives for the IT and communications sector (ICT. Thus, the advantages of using ICT services and equipment over creation of an information society able to
stimulate the growth of economic competitiveness, and of social cohesion were generally acknowledged The action plans (e-Europe 2002, e-Europe 2005, i2010) that envisaged the
implementation of the objectives set in the Lisbon Strategy, concentrated round the creation of an †information society for all†by extending the access and use of
Internet, as an info disseminating environment and supplying services and content creating new markets, thus contributing to a growth in economic productivity.
o An increase of investments in research concerning ICT o Promotion of a comprehensive information society
use of broadband communication services was identified as major objective 4 In this context, it became obvious that Romania also needs a political
electronic broadband communications, as determining factor in the creation of an information society. This strategy, on a medium term, must consist of realities and
lining all relevant resources to promote broadband services in Romania The document was structured on five main components consistent with the
•Definition of electronic broadband communications concept and presentation of the anticipated advantages of developing broadband
communication services •An analysis of the current situation in Romania •Definition of general principles and strategic objectives
•Identification of the financial demand and options During the options elaboration strategies and definition of priority intervention
The current strategy is based on data in the Diagnosis Analysis †Report on communication services in broadband (Roland Berger 2006) and on those supplied by the National Authority in
Communications concerning coverage with electronic broadband communications 5 I. 1 Definition of the broadband communication concept
Broadband, beyond its lexical or technical definition, irrespective of the transmission means (cable, radio, fiber optics) or of the speed we ensure,
defines the connectivity degree to the network and, implicitly, the quantity of info we have
The essence of the concept concerning broadband communications can be understood only if it is interpreted as a set of technological opportunities that allow
rapid transmission of a huge volume of data, so that the access to a wide range of
digital services may be ensured. The band width that is required by different on-line services varies significantly, depending on the respective services
The National Authority for Communications (ANC) establishes a general definition which is based only on the quantitative dimension of the Internet
connections, emphasizing the transfer speed of 144 kbps as a threshold for delimiting connections in broadband as compared to those in narrowband
In order to monitor the development of broadband access availability we must complete the general definition with quantitative indicators that can be gradually
changed depending on the demand modification at the level of the end-user, but also depending on the offer of applications and services.
The uniform and final definition of broadband communications is worsen by aspects as dynamism of technological
innovation, the different development levels, the level of coverage with infrastructure networks as well as the difference as concerns the applications popularity
used in the process of providing electronic broadband communication services â€oebroadband connection represents that type of electronic communication that, by
Percentage of the population with no access to broadband communications Percentage County Number of counties
communications is limited due to different circumstances, we shall call as failure zone any locality with 10,000 inhabitants at most, where at least one internet
services provider is present I. 2 Anticipated advantages for the development of broadband communication services
Benefits of broadband communication access do not materialize by means of activities performances. The later can be executed without access also, but with far
more difficulty, in a restricted area, geographically limited. The great benefit is that it shall allow fulfillment of activities in a new form.
This possibility, as well as its influence on the entire society has started just to occur. Work at home by means of
unemployment, transportation or environment. Another exemple is e-education that represents an alternative to the traditional learning method,
broadband communications shall also play an extremely important part for applications that shall emerge as a consequence of the occurance of new needs
generated by the information society and knowledge based economy Measurable benefits resulting from the access to broadband communications
include •An easier and more rapid way of looking for information †information is
•Simplifying relations among citizens, enterprises, companies businesses, public administration and other entities •Creation of new opportunities on labour market (example, work at
home •A more efficient management of enterprises, especially of small and medium sized enterprises,
which leads to an increase in efficiency and develops competitiveness •New opportunities for entertainment or cultural life
•Improvement of population†s life quality in rural and disadvantaged areas by supporting development of tourism
•Implementation of telemedicine communications among doctors for sharing of experience From the effects point of view, we consider that broadband communications
shall become conspicuous on the following levels Education: Broadband communications can contribute to an increase in
Romanian school†s value by implementing new teaching †learning methods (e -learning), the possibility to interactively communicate with teachers and students all
over the world or to increase the degree of specialization of employees at companies†level by developing programs of E training and e-Coaching
At the same time new opportunities arise for the knowledge level of universities by the possibility to develop
same time it supposes the existence of broadband communication infrastructure as well as certain human resources experienced in new technologies,
Successful implementation of communication technologies has tangible effects in increasing the degree of innovation by the possibility to virtually aggregate best
The announced investments by companies as Infineon, Motorola, Nokia or Ruwel in research-development centers in Romania are relevant for illustrating the potential of
Economy: The interconnectivity between the business environment and that of digital communications is still at an initial stage,
and the development of new business models is depending on attracting a critical mass of users. In the
context of Romania†s current development and its opening towards the European and global economy, the business environment shall become a major consumer of
broadband communications. To that effect, we try to create a sort of mutual enticement where the business environment development leads to an increase of the
offer and, implicitly, to stimulate competitiveness and added value services. In addition, broadband sector development shall make Romania attractive as a
destination for foreign investments Broadband communications as facilitator of ICT development favors the creation of new working places and an increase in GDP/inhabitant, estimating that between
40%and 50%of productivity growth in latest years is due to ICT 9 Secondly, broadband communications allow a revolution in the business processes
For instance, it is no longer necessary for production facilities to be in close connection to research as communication can be reached virtually with the same
results in most cases. Broadband communications also contribute to e-business development, with major benefits by a significant reduction of transaction costs and
intensification of interaction speed among companies Cultural-entertainment activities: Electronic broadband communications can have a significant impact on cultural and entertaining activities
by providing an increased availability, by changing consumers†behavior as well as by providing access to a great number of options.
Also, while broadband communications performances increase, the on-line environment interactivity grows attracting users From the point of view of the main influence zones, broadband
communication benefits are to be found at the level of the public administration private companies, communities and at the level of the ordinary citizen
By facilitating access both internationally and nationally as well as by their possibility to disseminate content rapidly,
broadband communications can be a vector for promoting cultural values and diversity in Romania†s context (the
importance of Romanian cultural patrimony is recognized including also certain touristic objectives as the Danube Delta, Monasteries from Moldavia, Sighisoara
information, services as tax collection, education and health etc. all of major importance for citizens. Technologies and broadband communications can improve
the public administration flexibility and efficiency, can contribute to an increase in availability and access to government services
The public administration development of those electronic services meant for the citizens demand, for rendering efficient the citizen time, in terms of local and
administrative tax payment, of transmitting data and answering in electronic format as well as of giving useful info as regards certifications and authorizations (e
-10 Gouvernment and e-Administration) and rendering efficient the public health services by setting up data basis nationally concerning health of patients in hospitals
and at the level of medical clinics (e-Health) and developing telemedicine services that lead to a permanent monitoring of patients with heart diseases, diabetes and
other diseases as well as of handicapped people Private companies: For companies broadband communications represent a facilitator of E-business applications
and practices, creating new business opportunities and helping companies to get high productivity based on an
improvement of access to information and transactions. Both for companies and employees broadband communications are meant to reduce the importance of
localizing by allowing the establishment of offices in small, rural or isolated localities as well as by facilitating teleworking
communications allow business processes progress, contributing to an increase in competitiveness of Romanian companies in Central and Eastern europe (CEE), and
broadband communications development can favor economic and social integration by facilitating access to goods and new, superior services as well as participating
facilities in digital economy or information society For the common consumer, besides facilities provided by broadband
communications already mentioned (as e-Education, teleworking etc. the beneficial effects materialize in the increased access to the interactive content
interconnectivity of different equipment (whether it has or not the communication component) or personalization of consumption
II. 1 Overview on the existing situation on broadband communication services market During the last two years we noticed a remarkable evolution at the level of
electronic communications market as regards internet services providing. If mid -11 2006, we had 2, 66 million connections of internet access, mid 2008 the number
well as the continuous development of services using as support the internet created a trend for young people and even a way of life
and especially broadband communications over such a short period of time Statistical data concerning electronic communication market in Romania in
Communications, indicate an annual rhythm of growth of broadband access connections to internet. According to data reported by internet providers, in June
of economic growth perspectives in general, broadband internet development continued at EU level with an increase of 19,23%during July 2007-July 2008.
In Romania, the penetration rate of broadband communications services continues to grow in 2008, but it is still one of the lowest rates in European union
communication services (30%of the population lives in cities with no coverage of broadband communication services) and low incomes, especially in the rural zones1
Table 3: Evolution of the penetration rate of broadband internet dedicated access connections during 31.12.2003 â€
urban and rural environment ï¿Access problems on local loop (implementation of unconditioned access on
Volume of investment can reach a reduction because of the current economic crisis ï¿The lack of a common approach at government level for implementing
Opportunities ï¿The advantage of late development: the domination period of narrowband connections can be reduced significantly
Possibilities of rendering valuable the high potential demand †aggregation of public demand, occurence of new corporate customers
ï¿Positive characteristics of consumers †opening towards innovative services high digital alphabetization of young people
ï¿Growing availability of financing resources ï¿Increase in the penetration of broadband connections at the level of the
SWOT analysis concerning broadband services market indicates that although there are several advantages and opportunities for developing these
services, in cases of a lack of intervention measures adapted to Romania†s existing problems, the risk to deepen the digital gap becomes even bigger thus amplifying
differences between Romania and the other European union states 18 III. GENERAL PRINCIPLES AND STRATEGIC OBJECTIVES
of broadband communication services (identified as one of the most important facilitator of society modernizing
communication services, activities that in the absence of an intervention from the state would have experienced a much more reduced rhythm
conditions, we had in view removal of certain access barriers to broadband services One of the principles at the basis of this approach is guaranteeing free access to a
large range of services with high social and geographic availability. This supposes mainly the existence of a free market, guaranteed by observing the non
electronic communication services and encouraging a competitive market as regards the offer diversity, tariffs and quality of services.
So, the national broadband communication strategy acknowledges the importance of market instruments in developing broadband services
At the basis of a free and competitive market lies the fundamental principle of technological neutrality,
which ensures the existence of a diversity of solutions and technologies able to meet the specific needs of communication of different groups of
users and offers the possibility to choose the most efficient method of communication in a given situation.
Precisely for observing this principle, the state†s 19 intervention formula shall be rather indirect (by regulations and incentives) and
This multitude of communication resources is even more valuable having in view the rapid change of society and its evolution and implicitly its needs of communication
and information. Also, given the rather long periods of time for the development and implementation of viable technical solutions, it is necessary to encourage
broadband for developing broadband communication services, the adopted solutions shall ensure observance of the principle of the efficient use of resources, namely
field of communication by a single authority, able to manage all initiatives within the program and to ensure avoidance of overlapping of activities and resources
In this way private investments shall be encouraged, competition and reduction of prices shall be promoted as a result of the competitive level
development in the field of broadband communications Another important principle is to ensure the development of both infrastructure
and services to generate the so-called †virtuous circle††creation of networks followed stimulation of services demand by developing a new content, leading to a
new broadband communication demand, that shall justify investments in infrastructure and the circle starts from the beginning
20 Also, we envisage to observe the universal right of access to electronic communication means and to promote the specific interests of disadvantaged
users or their special needs in order to obtain a maximum of benefits from broadband services in the sense of including them socially
and ensuring equal chances. Following the same principle of equal chances, we shall try, at the same
In order to ensure success for broadband communication strategy we identified and formulated a series of clear and comprehensive objectives, to efficiently orient
especially to ensuring access to broadband services, providing relevant content and ensuring necessary preconditions for information, education and security
using on-line services -Number of users of e -learning services -%of companies with their own web site
-%of companies using e -Business type applications -Number of e-Administration services available on each
relevant field of activity -Solicitations or forms processed on-line Ensuring information education and security (pre
availability and degree of services use, encourage development of informational content or ensure an adequate framework that may allow the improvement of
competitive and investable environment) and after the diagnostic analysis of broadband communication market we identified 10 strategic objectives and six
specific ones The strategy†s general objectives are •Growth of the penetration rate at the level of households, of broadband
connection services up to 40%in 2010 and up to 80%in 2015 •Growth of the rate of access to electronic broadband communication
services at the level of the population up to minimum 100%until 2015 •Connection and increase in the use of broadband services at the level of
SMES •Growth of the penetration rate of electronic broadband communication services in disadvantaged areas from the access point of view
•Growth of on-line services offer for government and business sectors The specific objectives refer both to demand stimulation and electronic broadband
services offer for the public and private sector 22 •Connection of public institutions (public demand aggregation
•Increase in use at the level of the public field •Connection and increase in use at the level of SMES
•Increase in services†availability •Development of content and applications •Education of consumers and inclusion of disadvantaged groups of users
III. 3. Monitoring indicators Implementation of measures corresponding to each objective shall be monitored by means of specific indicators
In defining indicators we took into consideration the following principles •Key indicators must allow monitoring of the progress achieved
fundamental objectives of the national strategy for broadband communications •Key indicators must offer a clear panoramic image on the sector†s development
communication sector development •Transparency †indicators must be transparent, easily explainable and understandable (including in the case of composed indicators
Access rate of broadband services at the level of the population 10,5 2008) 20 100
type services by natural persons demand) as a whole 5 20 50 The rate of commercial operation
Also, with a view to assess the dynamics of investments in infrastructure projects of broadband type we shall monitor the number of projects and the related
adjustment of initiatives priority for implementing broadband communication strategy during consultations with the Working group for implementing the national strategy
for the development of broadband communications. The working group was set according to measures established in point IV. 1 of this document
We shall focus especially on extending the coverage area of broadband communication in disadvantaged areas.
these areas that benefit from broadband communication services after implementing the strategy. Of course, for having an overview on the global degree of connectivity registered in
The strategic plan recognizes initiatives with impact on broadband services development already executed, underlining the importance of continuing efforts on
directly or indirectly the evolution of broadband communication services. These actions contribute to the achievement of preconditions for an extensive adoption of
no overview on all initiatives the result being a lack of transparency on opportunities they offer both from the potential beneficiaries†perspective and even of the
broadband communication services development A representative example to this effect is Italy, where two entities were set up to
implement the strategy of broadband communication development •Infratel Italy, a company set up by the Ministry of Communications and
responsible for the implementation of initiatives envisaging promotion of broadband communications†infrastructure development and elimination of the
digital content and broadband services 25 Relevant examples can be found with other EU member states as Ireland, Hungary
strategy of broadband communications development consisted of The Ministry of Internal Affairs, Ministry of Finance, Ministry of Education, Ministry of Trade and
Industry, FICORA (Finnish Communications Regulatory authority), Finnish Competitiveness Authority, Consumers Protection Agency, Confederation of Finnish Industries, Fi-Com (Finnish Federation for Communications and Teleinformatics) and
Finnish Local and Regional Authorities In Hungary the national strategy implementation for broadband communications and ensuring electronic broadband communication spreading is
ensured by Telkes Tanã¡csadã Rt consortium, Colosseum Budapest Kft. Å i Ariosz Kft In the case of Ireland, a company, part of Hutchison Whampoa, was selected
has as purpose providing broadband services in uncovered areas (disadvantaged zones In Romania, the role of operational entity shall belong to the Working group set
communication infrastructure development as support for promoting informational services. The entity shall be the interface between the different authorities
/institutions with interests in projects application, collecting reactions from them and ensuring a minimization of transactional costs.
entity shall ensure the communication/interface with parties on the market which are involved under the form of a sole management of relations point with these parties
as concerns the broadband communication sector For meeting objectives at national level, the Working group shall perform the
services bigger than EUR 100,000 3. Establish the main updating ways for central administration using methods
can stimulate the demand for broadband type services The purpose of regional development for broadband communications was to
render economically viable networks and services providing even in areas where such an enterprise is not commercially profitable.
For achieving this purpose we must draw comprehensive and well coordinated regional plans that should contribute
to extend broadband communication networks in disadvantaged zones as concerns the access The Working group shall also have the following specific tasks
-to establish of opportunities and needs for legislative and regulatory initiatives necessary for a good progress of the transition process
-to conceive and develop subsidy programs for equipping the disadvantaged categories of the population with reception equipment
initiatives that cooperate to meet the objective of broadband communication development and of those with implications to this effect
communication sector versus operation of telecommunication projects and effective implementation of demarches provisioned for in the strategy
communications, there shall be meant concrete actions to lead to the achievement of the assumed major objectives
of the Ministry of Communication and Information Society, Ministry of Education Research and Innovation, Ministery of Administration and Internal Affairs, Ministry of
Public Finance, Ministry of Economy, Ministry of Transportation and Infrastructure Ministry of Regional Development and Housing and Ministry of Health.
by notifying the Ministry of Communications and Information Society, shall appoint 3 representatives each for the working group, one of them
in Government Decision12/2009, by which the Ministry of Communication and Information Society is appointed as sole public authority in organizing and
calculated demand represents an initial estimation. During future consultation stages, after setting up the measures provisioned for in the strategy,
Financing demand for the development program of broadband communication services For meeting the objectives set,
the Working group for implementing the national development strategy of broadband communications shall have to evaluate the
financing demand and also to identify and quantify available resources to that effect 29 As a result, a closer estimation to the real financing demand can be obtained
by substantiating on costs which can be done only by a clear dialogue between all working group representatives and the operators on the communication market.
This dialogue shall also emphasize their interest to participate in achieving the proposed options, which shall allow a good quantification of the necessary contribution from
the authorities, by public funds respectively However, a brief evaluation of costs involved in putting into practice of the
Summary of the financing demand for implementing government strategy concerning broadband communication services development Major objective Instruments
Financing demand by the national development program of broadband services 2009-2015 mills. of Euro
Infrastructure development in the failure areas Total out of which: 140 •Cofinancing infrastructure projects in failure areas
130 •Granting fiscal incentives for infrastructure projects in the failure areas 10 Extensive growth of broadband
services availability •Development of Hotspots at the level of towns (public markets libraries, public places, etc
broadband services 85 Introduction of on-line services at the level of the public administration Total out of which:
770 •e-Romania 90 •e-Guvernment 90 •e-Administration 70 •e-Justice 40
Communication, instruction, etc 35 TOTAL PROGRAM 1. 250 IV. 2 Financing means In drafting the financing plan,
mind the opportunities that may occur on medium term •The possibility to include broadband services in the universal service
field. At the European level such a proposal already exists, and Romania, as a member state, is in favor of this opinion.
adopted, projects financing for implementing broadband services and infrastructure can be sustained from the universal service fund
•The opportunity to conclude public private partnerships with actors of the market interested in participating at co-financing projects for
implementation of broadband services and networks, but also with a view to develop new broadband technologies in the next years.
private investments with internal, but mostly external resources
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