Private Public Partnership - leading force of Lithuanian Society Modernisation Antanas ZABULIS President and CEO Omnitel (Lithuania) Chairman of the Board of Lithuanian Development Agency Member of Knowledge Council, lead by the President of the Republic of Lithuania

Omnitel Success Secret: Trust, Respect, Quality and INNOVATION

INNOVATION OF OMNITEL AND IT’S PARTNERS empowers SOCIETY MODERNISATION First GSM Network First Internet Provider Technology Leader Society Modernisation Initiator

The talk you hear today about adapting to change is not only stupid, it’s terribly dangerous. The only way you can manage change is to create it. By the time you catch up to change, the competition is already ahead of you. – Peter Drucker Why we need proactive modernisation?

PRIVATE INVESTMENT LITHUANIA DIGITAL MODERNISATION

Lithuania Telecommunication Evolution 1991, after Lithuania regained its independence, Lithuanian American Dr. J. Kazickas founded LITCOM (the present Omnitel) – first private telecommunications company in Eastern Europe Omnitel satellite ground station allowed to establish first independent (from Moscow) communications to other countries 1995 Motorola Omnitel investment enable first mobile GSM operations 1995 First Internet connections provided by Omnitel 1998 Privatization of fixed line incumbent - Lietuvos Telekomas 2002 Omnitel became biggest mobile operator in Baltic States 2002 Mobile penetration overcome fixed 2003 Liberalized fixed telephony This year Omnitel celebrates the 10th anniversary of its activities. The company made its first steps together with the newly-independent state. One of the founding members of Omnitel, Juozas Kazickas, was actively involved in the preparation of state programmes to transform the Lithuanian economy from the model of planned economy to a market economy. The founding of Omnitel was one of his personal contributions to the development of the Lithuanian economy. The importance of independent communications with the world was one of the most important issues to the state which at that time got involved in information wars with Russia The idea of Mr Kazickas to found a telecommunications company which would be independent from the Russian dictatorship was approved and encouraged in 1991 by the Lithuanian Government of that time. Following the establishment of Omnitel, Lithuania opened its door to the world. We did this before Latvia, Estonia, Byelorussia, Ukraine and many other neighbouring countries. Furthermore, the establishment of a telecommunications company meant the influx of huge private capital to Lithuania. The first major investments into the newly-independent Lithuanian economy gave this country a real opportunity to get on its feet. From the very start, Omnitel became one of the largest investors into the Lithuanian economy and one of the largest Lithuanian companies. The founders of Omnitel set a goal to bring the latest telecommunications technologies to Lithuania and provide the broadest possible range of services. The successfully chosen operational strategy and the philosophy of a company striving for leadership allowed fast development of activities and formed a basis for securing a leadership position for this company working in the field of telecommunications. This year Omnitel celebrates the 10th anniversary of its activities. The company made its first steps together with the newly-independent state. One of the founding members of Omnitel, Juozas Kazickas, was actively involved in the preparation of state programmes to transform the Lithuanian economy from the model of planned economy to a market economy. The founding of Omnitel was one of his personal contributions to the development of the Lithuanian economy. The importance of independent communications with the world was one of the most important issues to the state which at that time got involved in information wars with Russia The idea of Mr Kazickas to found a telecommunications company which would be independent from the Russian dictatorship was approved and encouraged in 1991 by the Lithuanian Government of that time. Following the establishment of Omnitel, Lithuania opened its door to the world. We did this before Latvia, Estonia, Byelorussia, Ukraine and many other neighbouring countries. Furthermore, the establishment of a telecommunications company meant the influx of huge private capital to Lithuania. The first major investments into the newly-independent Lithuanian economy gave this country a real opportunity to get on its feet. From the very start, Omnitel became one of the largest investors into the Lithuanian economy and one of the largest Lithuanian companies. The founders of Omnitel set a goal to bring the latest telecommunications technologies to Lithuania and provide the broadest possible range of services. The successfully chosen operational strategy and the philosophy of a company striving for leadership allowed fast development of activities and formed a basis for securing a leadership position for this company working in the field of telecommunications.

Lithuanian mobile telecommunications market, at the end of 1 st half of 2003 Lithuanian business segment chooses Omnitel: the company has secured 70 percent of the Lithuanian business market (Baltic Surveys) Out of 100 of the largest Lithuanian companies, 90 % are customers of Omnitel (Lithuanian Business Leaders, ) Omnitel has always controlled and still controls the largest share of the telecommunications market. (Comments of the chart) The figures have changed only by a few percent over the decade. Omnitel controls the largest market share both in the private and business sector. Up until now, Omnitel has focused on the business sector: all market surveys prove the success of our efforts in reaching our goal. (Most favoured) This year the company SIC Market Surveys carried out a survey of the image of the largest Lithuanian companies. During the survey respondents were given a list of 30 companies and asked to express their opinion about these companies and assess their strength. Omnitel is in the Top5 of the most favoured companies. According to survey participants, Omnitel is the second strongest Lithuanian company (after Kraft Foods). (Chosen by Business Segment) The Baltic Surveys company carries out an annual survey of managers of Lithuanian companies. This survey reflects market penetration and the way the market is divided between different operators. According to the results of this survey, Omnitel controls 70 percent of the corporate market. Omnitel’s Internet services are used by 40 percent of the corporate market. (100 largest companies) The analysis of the publication Lithuanian Business Leaders published by Verslo Žinios daily has shown that 78 out of 100 largest Lithuanian companies choose services of Omnitel. The business leaders’ choice allows us to state that Omnitel has the strongest position on the market. Omnitel has always controlled and still controls the largest share of the telecommunications market. (Comments of the chart) The figures have changed only by a few percent over the decade. Omnitel controls the largest market share both in the private and business sector. Up until now, Omnitel has focused on the business sector: all market surveys prove the success of our efforts in reaching our goal. (Most favoured) This year the company SIC Market Surveys carried out a survey of the image of the largest Lithuanian companies. During the survey respondents were given a list of 30 companies and asked to express their opinion about these companies and assess their strength. Omnitel is in the Top5 of the most favoured companies. According to survey participants, Omnitel is the second strongest Lithuanian company (after Kraft Foods). (Chosen by Business Segment) The Baltic Surveys company carries out an annual survey of managers of Lithuanian companies. This survey reflects market penetration and the way the market is divided between different operators. According to the results of this survey, Omnitel controls 70 percent of the corporate market. Omnitel’s Internet services are used by 40 percent of the corporate market. (100 largest companies) The analysis of the publication Lithuanian Business Leaders published by Verslo Žinios daily has shown that 78 out of 100 largest Lithuanian companies choose services of Omnitel. The business leaders’ choice allows us to state that Omnitel has the strongest position on the market. Omnitel shareholders

Fixed and Mobile Penetration Mobile voice is booming 2002 Mobile voice telephony penetration has overcome fixed Mobile messaging is rapidly gaining momentum Omnitel mobile data messaging exceeds Eastern Europe average by more than 200% and Western Europe average by 30%

Largest mobile network in Baltic States One of the first in Europe to implement a wide range of integrated services, One of the first in the world to start implementing GPRS technology One of the first in the world implementing faster GPRS transmission using new coding schemas First in the world to trial new generation Horizon II BTS. OMNITEL is modernising the society, implementing and promoting modern technologies

TELECOMMUNICATIONS SIGNIFICANT PLAYER IN NATIONAL ECONOMY: Contribution to 2002 GDP: 4.2%

PRIVATE - PUBLIC INITIATIVES LITHUANIA DIGITAL MODERNISATION

Knowledge Council lead by the President of the Republic of Lithuania Council consists of top level governmental and private business executives dedicated to set-up of strategic priorities developing knowledge economy and society Knowledge Economy Forum Association, creating and promoting knowledge economy development strategies, consist of 40 leading innovative private enterprises representing IT, biotechnologies, leaser technologies, and telecommunications Development of Long-Term Strategy for Lithuanian Economic Development in Strategy was developed by leading experts from public and private sector and went via electronic community consultation by internet. Industry development strategy include target to achieve 25% of GDP generated by ‘knowledge rich’ industries by Private/Public Initiatives

“Window to the Future” initiative Alliance of the biggest private enterprises of Telecommunications, Banking and IT sector, aiming to stimulate development of Information Society and force Internet penetration growth in the country National Agreement on Economic Development Memorandum was signed by all major political parties and leading business associations

NATIONAL AGREEMENT Signed in 2002 by all major Parties and Public Associations Vision of Lithuania beyond EU post-accession period: well developed Knowledge Economy and Information Society

The Result: more wealthy, peaceful and happy society Information Society Knowledge Economy Knowledge Society Higher productivity of Agriculture Sector Increase of incomes Solution of social problems New culture expansion possibilities GROWING PROSPERITY OF THE TOTAL COMMUNITY

New Business Approach to Philanthropy Lithuania Information Society Breakthrough SOLUTION

Corporate philanthropy is often nothing more than PR campaigns promoting corporate brands. Result? Public cynicism, not goodwill… yet companies can give strategically: by using philanthropy to improve their competitive context /../ They generate social and economic benefits far exceeding those provided by individuals, foundations, or even governments. “Competitive advantage of Corporate Philanthropy” by M.E. Porter and M. R. Kramer, Harvard Business Review, December 2002 A New Approach to Philanthropy Good for society and good for the business

First large scale private school computerisation project 8 million litas contribution from Omnitel and it’s founders – Dr. J.Kazickas and V.G.Gruodis. More than 200 schools computerized and connected to internet. This project pioneered major breakthrough in Lithuania school computerization financed by Government and Private Businesses SCHOOL MODERNISATION

Window to the Future Omnitel together with it’s partners initiated unique in Europe large scale Private-Public Internet promotion initiative WHOLE SOCIETY MODERNISATION

Business Alliance to support Knowledge Society development: Omnitel – mobile market leader Vilniaus Bankas – largest commercial bank Hansabankas – second largest commercial bank Lietuvos Telekomas – fixed communications incumbent Sonex and Alna – largest Lithuanian IT companies Window to the Future

The Goal To achieve EU’s average Internet penetration in Lithuania within three years

Fields of Activity Access Internet access for all layers of the society Training Educating society and training people to use computers and the Internet E-Content Development of electronic content and services, relevant to the society

“Omnitel” pasiekė savo užsibrėžtą tikslą ir šiandien užima tvirčiausias pozicijas Lietuvos mobiliųjų telekomunikacijų rinkoje (prie technologijų lyderės) Neretai “Omnitel” Lietuvoje įdiegia technologijas anksčiau nei jos pristatomos kitose pasaulio šalyse arba pristato kartu su pasaulio operatoriais. (prie paslaugų lyderės) Bendrovei svarbu, kad naujausios technologijos duotų labai realią naudą Lietuvos gyventojams, todėl daug jėgų ir darbo investuojama konkrečioms paslaugoms kurti. Šiuo metu “Omnitel” kaip telekomunikacijų bendrovė savo klientams pateikia plačiausią paslaugų spektrą. “Omnitel” šiandien siūlo savo klietams tokias pat paslaugas, kokias siūlo Vakarų Europos ir Skandinavijos mobiliojo ryšio operatoriai. (prie investicijų) Šiandien bendrovė yra vienas svarbiausių valstybės ūkio subjektų. Viena didžiausių ir kaip investuotoja, ir kaip mokesčių mokėtoja. Įtakingiausia formuojant Lietuvos ir Baltijos šalių telekomunikacijų rinkas. (prie klientų skaičiaus) “Omnitel” pastangos ir investicijos lėmė bendrovei lyderės pozicijas Baltijos šalių regione. Pagal klientų skaičių “Omnitel” šiandien lenkia visas Lietuvos, Latvijos ir Estijos mobiliųjų telekomunikacijų bendroves. Šiandien “Omnitel” yra nebepralenkiama šalies mobiliųjų telekomunikacijų srities lyderė. “Omnitel” pasiekė savo užsibrėžtą tikslą ir šiandien užima tvirčiausias pozicijas Lietuvos mobiliųjų telekomunikacijų rinkoje (prie technologijų lyderės) Neretai “Omnitel” Lietuvoje įdiegia technologijas anksčiau nei jos pristatomos kitose pasaulio šalyse arba pristato kartu su pasaulio operatoriais. (prie paslaugų lyderės) Bendrovei svarbu, kad naujausios technologijos duotų labai realią naudą Lietuvos gyventojams, todėl daug jėgų ir darbo investuojama konkrečioms paslaugoms kurti. Šiuo metu “Omnitel” kaip telekomunikacijų bendrovė savo klientams pateikia plačiausią paslaugų spektrą. “Omnitel” šiandien siūlo savo klietams tokias pat paslaugas, kokias siūlo Vakarų Europos ir Skandinavijos mobiliojo ryšio operatoriai. (prie investicijų) Šiandien bendrovė yra vienas svarbiausių valstybės ūkio subjektų. Viena didžiausių ir kaip investuotoja, ir kaip mokesčių mokėtoja. Įtakingiausia formuojant Lietuvos ir Baltijos šalių telekomunikacijų rinkas. (prie klientų skaičiaus) “Omnitel” pastangos ir investicijos lėmė bendrovei lyderės pozicijas Baltijos šalių regione. Pagal klientų skaičių “Omnitel” šiandien lenkia visas Lietuvos, Latvijos ir Estijos mobiliųjų telekomunikacijų bendroves. Šiandien “Omnitel” yra nebepralenkiama šalies mobiliųjų telekomunikacijų srities lyderė. In 2002 the first 70 “Window to the Future” free Public Internet Access Points opened in: Local government offices Libraries Community centers Museums Hospitals

of adults are getting free training on Internet Basics in 2003 “I have found out so much in 2 days-I will certainly use internet for my professional knowledge” (doctor Benediktas Puodžiūnas from Ignalina, age-60) “Thanks for the great chance! The ability to find the needed information on your own makes you fell independent” (entrepreneur Ona Grabauskienė from Garliava, age-43)

More than adults have already accomplished the training courses Distribution of the trainees by professions:

The Rolling Snowball Model: From Idea to Massive Movement

New Partners Joining … More than 20 companies agreed to join “Window to the Future” in 2003

Enthusiastic Support by Local Governments and Communities

Lithuanian Government Joined the Alliance Cooperation agreement with the Ministry of Interior to finance “Window to the future” 300 PAIP’s. Agreement with the Ministry of Education on cooperation in organizing large-scale internet trainings.

Alliance “Window to the Future” has signed Collaboration Agreement with Lithuanian Confederation of Industrialists Goal of the collaboration – to introduce the companies of the Confederation into the activity of Alliance and thereby to improve PC skills and IT knowledge of their employees. On August 1st, 2003, the Alliance has signed collaboration agreement with Lithuanian Labour Exchange Goal of the collaboration – to integrate the least social secure part of the community into the projects, implemented by the Alliance.

Internet Penetration Rate Gained Strong Initial Momentum

Further Development Access Up to 1000 PIAP’s are to be opened using private, state and EU funds. Training 300,000 people trained in basic internet skills over the next two years. E-Content E-Content promotion program start at the end of 2003.

“Window to the future could be a model example for other countries. It is a rare case when private and public institutions so successfully cooperate,”- Lars A.Jeurling, Senior consultant of World Bank

”Window to the Future” does not belong to the founders any more. The initiative is gradually transforming into the massive movement of the society renovation from top to bottom. ”Window to the Future” becomes the visiting-card of Lithuanian modernity and an important part of Lithuanian image as well.

E-CITY Initiative CITY MODERNISATION

ICT infrastructure Payments InformationAdministration E-City infrastructure

ICT infrastructure Payments InformationAdministration Transportation Energy EnvironmentHealthEducation City governance

First E-City Services already running

M-payment for parking No need to look for coins, easy to extend parking time – just send an SMS from where you are ! Omnitel was first in Lithuania, 7th in the world to launch the service based on an in-house developed solution Launch in Kaunas - March 27, 2002; in Vilnius - July 3, 2002 Service management (inspector side) based on bar-code readers and GPRS Already about 15% of total parking payments collected via mobile channel

Electronic bill payment 4 ways to pay bills: – Internet banking payments (all banks) – ATM payments (Hansa) – eBill (Vilniaus Bank) – SMS payments (Hansa)

Pre-paid top-up 10 different ways: – POS electronic top-up - secret code and on-line (petrol stations, retail stores, kiosks) – Top-up via ATM – secret code and on-line – Via mobile Bank/SMS – From post-paid account – S.O.S. – Via Internet – Internet banking and credit card payment – Using ID card with bar-code (coming, also will be used for e-ticketing)

Municipal transport location tracking and security Tracking of vehicle location Distance management Security solutions Accident registration and reporting

EXPONENTIAL GROWTH IS THE REALITY! LITHUANIA DIGITAL MODERNISATION

"I am convinced that the contribution of Lithuania to the knowledge economy will be visible globally in the nearest future. “ Rolandas Paksas The President of the Respublic of Lithuania “World IT Forum is international initiative that carries global character. It harmoniously echoes strategic priorities of Lithuanian Government – development of information society and knowledge based economy in our country. I truly hope, that members of WITFOR will evaluate the progress of our country in this area." Algirdas Brazauskas The Prime Minister of the Republic of Lithuania Honorary Chairman of the WITFOR Vilnius

“Lithuania has the potential to become the “Sunrise Valley of Europe” and to make its presence felt both in Europe and in the global market.” UNCTAD/WTO International trade center (World Trade Organization)

THANK YOU!