With many highly rated universities in cities such as Bucharest, Timisoara, Cluj, Iasi, and Constanta that provide a regular source of talented people and with some of the biggest ITC multinationals present in Romania, it was inevitable that events dedicated to innovation incubators became very fashionable during 2013-2014.
The flagship centre is that created in 2012 in Cluj. Cluj IT is a cluster based organisation formed of various actors in the ITC field: providers of software services and solutions, universities and research institutes, public bodies and other catalyst organisations. By 2017, Cluj IT Cluster aims to becoming one of the leading suppliers from Central and Eastern Europe for innovative IT services and products, as well as for organisational support systems, with the majority of its members able to compete on national and international markets.
In 2014, according to the Innovation Union Scoreboard, Romania was still positioned among the last in the EU-27 countries. But this is very likely to change as the Romanian IT hubs become serious competitors to London’s Silicon Roundabout, Berlin or even Silicon Valley.
In November 2014, the Ministry of Communications and the Information Society launched the National Strategy on the Digital Agenda for Romania, aligned with the Digital Agenda for Europe 2020. The Strategy was approved in April 2015 through Government Decision no.245.
Some of the objectives set by the European Digital Agenda have been assumed and adapted to the current context of Romania, aligned with the strategic vision of the Romanian ICT for 2014-2020.
The full implementation of the digital objectives in Romania needs an investment of about 3.9 billion euros by 2020. Once implemented, the impact on GDP (direct and indirect) is expected to be 13%.
Romania’s objectives include:
According to the National Institute for Statistics (INS), communications accounted for 5.6% of GDP in 2016 and registered a significant increase in volume of 14.2% compared to 2015. Moreover, it contributed 0.7 % to the total GDP growth of 4.8%.
The information and communication (ICT) sector has grown by almost 45% over the past five years and its contribution to GDP has doubled over this time, according to INS, surpassing traditional sectors such as agriculture and construction.
The penetration of broadband services continues to be a key challenge in Romania, despite the progress registered in the last few years. Although Romania ranks among the first countries in Europe for ultrafast broadband penetration (at least 100Mbps), the national coverage with NGA technologies remains significantly lower than in other EU member states and is still very much limited to urban areas.
Only 33.2% of rural areas have access to NGA networks, which is significantly below the target of 100% coverage with 30 Mbps by 2020, set through the National Plan for the Development of the NGN Infrastructure.
While coverage with fixed broadband has increased during the last few years up to 89% at national level, the penetration of mobile broadband in Romania (58.6%) continues to be one of the lowest in Europe.
Moreover, in the European Commission’s Communication – Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society, new ambitious targets were set in relation to broadband penetration and coverage. Building on the Digital Agenda for Europe 2020 targets, all European households, rural or urban, should have access to networks offering a download speed of at least 100 Mbps, which can be upgraded to 1 Gigabit and all urban areas as well as major roads and railways should have uninterrupted 5G wireless broadband coverage, starting with fully-fledged commercial service in at least one major city in each EU Member State by 2020.
Taking into account the objectives undertaken through the Digital Agenda updated recently by the European Commission, broadband penetration and coverage should be treated as a key priority within government strategies.
The development of nationwide networks, including the coverage of “white areas”, requires significant investment by operators of electronic communications. While fixed broadband coverage has increased during the last few years, mobile broadband remains below the coverage target. Consequently, FIC members consider that proactive support from Government is required for the development of mobile broadband connectivity.
Financial incentive mechanisms should be developed and implemented to support private broadband investments. The reduction of tariffs for spectrum allocation or access tariffs could be used as a means of directly encouraging communications operators to deploy broadband networks in areas with low commercial potential.
Many EU member states have made extensive use of European Investment and Structural Funds to extend broadband connectivity. In these cases, the administrative capacity to maximise the leverage effect on public (national or regional) and private co-funding (notably through the use of financial instruments) has been critical to support projects rolling out the next generation of broadband networks.
So far, Romania has allocated European Funds to deploy fixed broadband infrastructure in 783 white areas from a total of 2,268. The project has registered delays and it is expected to be finalised by the end of 2017.
Over the next few years, Romania has planned to allocate 1,022M euro for ICT related fields of intervention, while investements of 100M euro are planned only for the development of broadband and digital networks. The funds will be used to reduce the digital gap between rural and urban areas
FIC members support the Romanian authorities' efforts to find viable solutions to access European funds allocated to broadband development, and to use these funds to address the deficit of access to these services in rural areas. At the same time, we strongly believe that only efficient use of them, in accordance with the principles of competitiveness and economic sustainability, can help to achieve the Digital Agenda’s targets.
We consequently suggest the introduction of a new financial mechanism that would encourage companies in the IT sector to invest in these types of project:
The new funding model has to be designed as a complete solution that would provide direct access to broadband services for end users. Only if the essential components, i.e. the core network and the access network, are taken into account in the provision of the mechanism, will the continuity of services in the relevant areas be ensured.
One of the basic conditions in the allocation of funding sources to various projects is to demonstrate they are sustainable after the funding ends. Consequently, each project should be designed so that it is not limited only to the acquisition of network equipment, but will also ensure the uninterrupted provision of access services to the end user.
At the same time, to give companies in the IT sectoer direct interest in the project achieving its goal, i.e. to ensure the provision of broadband communications services to end users, it is important for them to participate, along with the state, in its financing.
The only form of ownership that ensures control over the investment and also allows further development and innovation is for it to be in the private sector.
Current legislation (Law No. 50/1991) is not beneficial to Romania achieving the objectives undertaken through the Digital Agenda. Small steps have been made to help the deployment of electronic communications networks. Under Law No. 159/2016 on the regime for the electronic communications networks infrastructure and on measures to reduce the cost of deploying electronic communications networks (“Law 159”), Law No. 50/1991 was amended to allow upgrades to be carried out without a building permit. Moreover, recently, the Ministry of Development announced its intention to reform the authorisation regime.
FIC members support the reform of the authorisation regime and they propose the creation of a regime allowing derogations for the deployment of electronic communications networks. At the same time, the Ministry of Development should involve all relevant stakeholders that can provide useful input into this process. FIC members would be available to provide support, by participating in working groups, and in drafting the relevant legal provisions that will represent the basise of the authorisation regime for the deployment of electronic communications networks.
Since the last revision of the European regulatory framework for electronic communications in 2009, the sector has significantly evolved and its role as an enabler of the online economy has grown. Consumers and businesses are increasingly relying on data and internet access services instead of telephony and other traditional communications services. At the same time, the demand for high-quality fixed and wireless connectivity has also increseased. We have also seen the convergence of fixed and mobile networks and online content services, such as cloud computing, the Internet of Things, Machine-to-Machine communication (M2M) etc.
In this context, a new proposed EC Directive to establish an Electronic Communications Code is being drafted, to set out the framework for the internal market in electronic communications and ensure its smooth functioning.
The adoption of the new regulatory framework will involve input gathering for all member states, through relevant working groups and commissions. We consequently consider that any position paper representing Romania’s approach to new regulation proposals should be in line with the position of the entire national communications industry.
FIC members strongly recommend that the Romanian authorities should engage in a consultation process involving all electronic communications players, prior to takeing a paricular position in discussions with European decision making bodies. Any position taken by Romania concerning a harmonised regulatory approach across Europe, consumer empowerment or simplification of regulation should be the expression of a common approach by relevant market players.
The draft law on cyber-security was declared unconstitutional through Decision No. 17/2015 issued by the Romanian Constitutional Court. The draft set out requierments for companies, including network operators and electronic communications providers, and included unreasonable provisions on access to information, unclear notification requierments as well as obligations which doubled already existing reporting requirements in the telecommunications sector.
At the beginning of 2016 The Ministry of Communications launched a new draft cyber-security law. This was presented to relevant stakeholders in several consultation sessions. As it did not receive approval from the Supreme Council of National Defence, the draft law did not reach Parliament.
The FIC considers that any legislative initiative on cyber security should be preceded by a comprehensive consultation process with industry representatives. As the implementation of additional security measures would involve significant investments from companies, FIC members express their concerns related to the level of financial effort required in order to implement the measures imposed through the new legislative package. For this reason, the proposed measures should be thoroughly assessed in terms of budget and logistics, in order to find the right financing mechanism for their implementation.
The digital society is undergoing major changes. As more and more of our day-to-day activities go electronic and digital, very large volumes of data about us become available. This phenomenon is being compounded by both technological and behavioural factors (e.g.: increased use of online services such as e-commerce, e-government, social media, etc).
Today, many firms are building their business models around their use of this data, especially for advertising, personalised offers and real time customer interactions. This use can also generate services that will benefit both individuals and society in general. According to an Internet of Things survey conducted by Acquity Group in 2014, many consumers would be prepared to share their personal data in order to make their device (e.g.: watch, car) smarter, thus bringing a tangible benefit to the customer experience.
In this context, a user centric privacy framework must be based on a correct understanding of the user’s privacy interests.
There is a need to provide a consistent user privacy experience that will establish familiarity with the privacy implications of applications and services, empowering the user and leading to better privacy management.
When human activity is outsourced to technology based on algorithms, there will always be a fear of loss of autonomy.
After transposing the Data Protection Directive 95/46/EC in 2001, the Romanian authorities have gradually increased the enforcement of data protection norms, which have an impact on all companies carrying out activities in Romania, including in the IT &C sector. Companies have needed to gradually adapt their products and services, as well as their internal processes, to ensure compliance with data protection requirements. The authorities have provided only limited support for these efforts, while the amount of information and data available on how the authorities apply the existing norms is limited.
The practice of the National Authority for the Supervision of Personal Data Processing is not transparent and repeated changes in approach (e.g., on how to interpret notification related rules) are not publicised. This may lead to practical roadblocks in the promotion of new types of services, such as cloud computing, as companies are unsure how to ensure compliance with the data protection requirements.
Faced with the rapid development of digital uses and growing threats (viruses, spam, etc.), simple tools need to be put in place to help users to cope with, manage and control their personal data and how it is used.
The National Authority for the Supervision of Personal Data Processing and the Ministry for the Information Society should ensure transparent and predictable implementation of the legislation on data protection. Adoption of guidelines, such as that on data protection in cloud computing proposed at the beginning of 2015 by the FIC together with AmCham Romania, should lead to the required increase in transparency.
Government and ICT players should also commit on the following four areas:
To ensure that the implementation of legislation on data protection will not negatively affect ICT players, they should be able to participate actively in the consultation process initiated by the Working Party Article No. 29 to discuss key aspects of the EU General Data Protection Regulation such as consent, transparency, international transfers and data breach notifications.
Finally, the Government should actively participate in the discussions related to the adoption of the Proposal for a Regulation of the European Parliament and of the Council concerning respect for private life and the protection of personal data in electronic communications and the repeal of Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), as this legislation will represent a significant change of focus to the rules governing digital services. To define the priorities for its participation, the Government should hold thorough consultations with the industry and other relevant actors.
Over the last decade, the evolution of information technologies, sensors, big data and products/services based on information has changed the way people live in a city. Access to information, services and communication is now provided anywhere and anytime by smartphones and people have adapted to this new way of living.
Meanwhile, vendors that create “smart city technologies” are trying to convince us that these technologies can help cities improve the efficiency, quality and cost of providing city services. At the same time, city governments are making the transition to online services, but they must ensure that no one is left behind, including those without access to this technology.
The main challenge the public sector faces in responding to opportunities a “smart city” brings is to quantify the impact of disruptive technologies, and this leads to challenging investment decisions. The structure and culture of city councils can block strategic thinking on ICT and the required organisational changes can be hard to implement.
While all cities are different, they all have common objectives and challenges. In order to take the city to a new level, they have to adapt their organisations and bring new digital services to their citizens.
Telekom Romania and Orange Romania had already taken steps in this direction. In April 2016, Telekom Romania, in partnership with Cisco, launched the first smart city project in Bucharest - Tineretului Park, providing four solutions: smart parking, free Wi-Fi connectivity, safe city solution and smart lighting.
Following a Ministry of Communication call for projects to celebrate to celebrate the 100th anniversay of the formation of the modern Romania state in 1918 in Alba Iulia, Orange, along with more than 20 partners, has launched a large scale smart city project in Alba Iulia. Fourteen out of twenty-one of their proposed solutions have already been implemented.
Among the solutions introduced by Orange, the following stand out: free Wi-Fi in public areas and public transport, traffic management, an environment monitoring dashboard with comparative measurements in urban and suburban areas, real time notifications on the public transport schedule, smart lighting, a city proximity engagement platform promoting tourism, water management in remote areas, as well as online surveys.
So far, the cost associated with these projects has been fully covered by operators and their partners.
Later, large scale adoption of these solutions will depend on integrated vision, from local authorities, with solutions being assessed to meet each city's needs. Local authorities will need to set up the necessary regulatory framework and related legislation on acquisitions, as well as choosing the right financing model.