I.  Network Overview

At present, Romania has 3,400,000 telephone lines serving a population of about 23 million. Line density currently stands at 14.4 per 100 population, and, although density continues to climb, to achieve even 25% or 30% density, major strides have to be made. The Ministry of Communications estimates the penetration ratio to be only 3% in the rural areas; at present, some 2,000 villages have no telephone service at all. This is of particular significance as the majority of the Romanian population lives in the rural areas, and indeed, the relatively low percentage of population living in the urban areas led directly to the establishment of the Ceasusescu urbanization program.  Providing telephone service to the rural areas is a very large task and one that Rom Telecom could not accomplish on its own for some considerable time. Therefore it is hardly surprising that the government has opened those areas to competition.  However, expectations are that this will only really work once major foreign participation is established.  Overall, the telecommunications development program estimated that by the year 2005, 7.2 million lines will have to be installed, both new and replacement lines. In 1991, Rom Telecom devised a long-term telecommunications development plan, covering the period from 1991 to 2005. The plan, considering recommendations made by Sofrecom, has been formulated  around general key points established by the government, and its specific objectives are:

1.  To increase digital switching capacity from 10% to 30% by the year 2005
2.  To install over 10,000 km of fiber optic cable
3.  To offer universal service
4.  To improve customer service
5.  To provide new integrated services based on digital technology

In the early nineties, the average waiting time for a telephone line was 14.4 years. It is therefore considered that the official waiting list of 1.3 million is just an indication of the surface demand. The truer estimate would be somewhere around 5 million potential customers waiting for service, as demand for telecommunications is rising at the rate of about 30%. Although economically the most significant, business subscribers account for about 10% of the subscriber base, and it is estimated that at present the growth in business lines is around 14%.  The specific development targets for the period of 1995 to 1998 were:

• Laying of 5,000 km of fiber optic cable and the use of an SDH overlay for the entire network during 1997
• An annual installation rate of 300,000

1.  Infrastructure

During 1995, Rom Telecom registered a total of 76 billion call units for local, trunk, and international traffic. The basic structure of the PSTN mimics the geographical division of Romania, with 40 switching centers which have one or more local exchanges interconnected in a mesh structure. Large towns have transit exchanges in addition to the local ones. Although the network is automated, some 80% of switching capacity is still made up of the electroni Pentaconta switches. The lack of copper cable means that line concentrators are still used in the local loop.(1)

2.  Modernization

Modernization commenced in earnest in 1992 when a 7.5-km fiber optic loop was installed in Bucharest. The EBRD financed the building of the first 1,800 km of Romania’s national Digital Overlay Network (DON) and the collateral digital systems.  The modernization effort is designed to accommodate the increased volumes of telephone and data traffic at the national and international levels. Rom Telecom is undertaking modernization not only of its backbone but also of the high-bit rate metropolitan area network (MAN) in the capital, Bucharest. Around US $6 million of SDH transmission equipment are going to be deployed following the successful test installation of an SDH ring in Budapest. The supply contract was awarded to Lucent Technologies in the summer of 1996.

3.  Transmission

During 1995, Rom Telecom undertook testing of its first SDH transmission system supplied by Phillips. The high-bit rate PHASE SDH transmission is arranged in an optical ring which can transmit bit rates of up to 622M bps, equivalent to 9,600 simultaneous telephone conversations. The system also provides access to international communications infrastructure without the need for extensive modifications.
In the summer of 1995, Ericsson was awarded a US $20 million contract by Rom Telecom for the installation of a 1,576 km fiber optic link in the north and central part of Romania. This link was to be the first phase of a transmission network project.  In the summer of 1995, Rom Telecom contracted with Siemens to install an extensive fiber optic network made up of 32,000 km of cable. The SDH network would provide northwestern and southern Romania with one of Europe’s most advanced installations when competed in 1998.  In mid-1996, Lucent Technologies was awarded a US $6 million contract to supply SDH transmission equipment to be installed in the Bucharest area.(2)

4.  International Calls

In 1994, it was already possible to call 185 countries from Romania, and a total of 2.3 billion international direct-dialed units were registered. Since then, international traffic has registered sharp growth, especially from Bucharest. The international value-added service Rom Telecom provides is Home Country District.

5.  Fixed Network Services

Rompac, a French-Romanian joint venture, was set up in 1992 to provide a public packet switched network based on X.3, X.28, X.25, and X.32 protocols. Rompac commenced commercial operation in 1995, initially at speed of 9600 bps.  Transpac is one of the partners in a packet switched data network that has also been installed. By the end of 1995, a total of 40 access points were available as an addition to the initial 20 access points and 6 main nodes. Currently, Rom Telecom’s partner in this project is Global One. The French component of Global One is the most active in Romania.  Logic Telecom SA operates three data networks in Romania (the company is also a shareholder in the GSM cellular operator Mobifon). During 1996, the company strengthened its backbone network with the addition of satellite equipment.

6.  ISDN

The service is yet to be launched, but the technology to be used is the Alcatel switching and transport system already being built. Rom Telecom’s modernization program includes installation of CCSS7 signaling, which could automatically support ISDN.

7.  Fax/Telegraphy/Telex

Rom Telecom operates the fax network, telex network, and telegraph services; there are 8,641 telex stations in operation.  Interest in telex and telegraph services has declined, albeit not steeply, mainly due to a sharp increase in the fax services.

8.  Mobile Communications

Telefonica Telemobile is Romania’s NMT 450 operator. Telefonica Telemobile is owned by the following shareholders:
 

•  Telefonica of Spain with 60%,
•  Radiocommunicatii of Romania with 20%, and
•  Rom Telecom with 20%.

The overall investment during the period of license has been estimated to be around US $500 million. The operator has therefore sought to exploit synergies available to it through the members of its consortium.
The managing partner, TIW of Canada, is to run the financial and marketing side of things, while AirTouch will furnish technical expertise. ISAF will help in construction, while Ana Electronics and Romanian Post will provide the sales and service network.  GSM service, under the brand name of Connex GSM, is available in Bucharest and eight other major cities, and it is expected to cover most of the country by the end of 1997. The company’s goal is primarily to provide Romania with an affordable digital cellular telephone service. The second GSM operator is MobilRom (France Telecom, Alcatel).(3)

9.  Network Statitics (4)
 
 
 

	1993	1994	1995	1996	1997
Installed Capacity	2,762,344	2,950,000	2,996,000	3,170,000	3,400,000
No. of lines per Employee	52.11	56.66	56.52	59.8	-
Digital Lines	132,506	442,500	539,280	-	970,000
Telephone Density per 100 persons	--	12.28	12.7	13.96	14.4

II.   Major Projects

In 1991, the Romanian government launched a 15-year (1991-2005) program to expand and modernize the country’s telecommunications system.  Targets for the year 2005 included: increase the average penetration rate from 11 to 30% (7.2 million lines for a population of 23 million); create a national digital network; develop the microwave network and encourage radio link solutions; improve basic services provided to rural areas; and encourage the development of value-added services.  The estimated value of the program was set at $10 billion.

During its first seven years of implementation (1991-97), Romania’s
telecommunications modernization program has produced some impressive results:

• Local and transit digital exchanges have been installed in major cities, bringing the total number of telephone lines up to 3,400,000, of which 970,000 digital.
• The average telephone density reached 15.3 percent (30% in urban areas, but only 4% in rural areas, where some 2,000 villages still have no telephone service at all).
• Four joint ventures have been established (with Siemens, Alcatel, Goldstar, and Telrad) to manufacture digital public switching equipment locally.  The first two manufacture high capacity public telephone exchanges (EWSD and E 10 B type equipment), while the latter produce small capacity exchanges for rural areas and PABX’s.

Major projects for the 1998-2000 period include:

Further expansion of the GSM cellular system (about 700,000 new
subscribers, for a total of 1 million in the year 2000).

Implementation of the DCS 1800 system.  Two licenses (worth $25 million each) will be granted by the end of 1998: one to Romtelecom, the national telecommunications company, and one to an operator to be selected via international tender.

Expansion of digital wireless local loop (WLL) systems.  This project aims at increasing telephone density in rural areas and in busy urban environments.  Of the approximately 500,000 lines/year to be installed by Romtelecom, about one third are expected to use WLL systems.  Pilot projects by private companies are encouraged in order to help select the most adequate technologies.  Build-transfer arrangements will be preferred.

Expansion of the intelligent payphone network.  About 10,000 payphones will be installed in 1998.  They will adhere to regional standards and will use Eurochips.

Launching of ISDN (using the already existing switching system and related transmission paths).  It will be supported by the installation of SS7 signaling system.

Installation of a second international digital switch (to be located in the city of Brasov).  The switch will ease congestion on the existing switch located in Bucharest and will expand the capacity of Romtelecom’s international connectivity.

Expansion of Internet services.  The existing Internet backbone will be upgraded by Romtelecom via the implementation of a frame relay over ATM network.

Expansion of the national television’s TVR-2 public channel.  This will be achieved by using new digital transmitters enabling the TVR-2 channel to broadcast in the stereo NICAM system.

Upgrading of the national spectrum management system. (5)
 

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