In order to provide an all-inclusive overview of the Commission’s operations and characterize the context for regulation in each of the sectors, the annual report contains information on development of regulated sectors and largest service providers.

          In 2002, compared to 2001, the gross domestic product at constant prices grew by 6.1%. The value added of electricity, gas and water supply sector grew by 4.6% in 2002. The share of the sector in total value added decreased by 0.1 percentage point compared to 2001 and was 3.6%.

The transport and communications sector, which covers also railway, telecommunications and postal services, grew by a total of 2.4% in 2002. The slowdown of growth can be explained by lower volumes of cargos in ports and lower volumes of oil and oil products transported through the pipelines. At the same time cargo turnover by railway grew by 6% and postal and communications sectors grew by 8% owing to the development of mobile phone communications. The share of the sector in GDP decreased by 1 percentage point and was 14.5% of total value added.

Household consumption expenditures on regulated public services[1]

          Household expenditure analysis[2] shows that people are spending increasing amount of money on regulated services. From 1996 to 2001[3] consumption expenditures on such services per one member of a household have increased more than three times – from 2.13 lats to 6.96 lats, mainly due to the growth of payments for telecommunications services. For comparison, total household consumption expenditures during this period increased almost twice. Despite the growth of expenditures on the regulated services in the survey period, there was a decrease in annual consumption levels for several types of services.

          The share of expenditures on regulated public services in total household consumption expenditures increased from 4.5% in 1996 to 8.5% in 2000, but in 2001 this indicator decreased to 8.0%.

The share of regulated public services in the structure of household consumption expenditures in 1996-2000, percent

The structure of household consumption expenditures and the shares of different regulated services are changing over years. In 1996-1997 expenditures on electricity had the highest share in the total consumption structure, but in 1998-2001 the largest share was spent on telecommunications services.

          Consumption expenditures on telecommunications services[4] constituted on average 4.33 lats monthly per one household member in 2001. From 1996 to 2001 consumption expenditures on telecommunications services grew steadily both in absolute and relative terms – monthly payment increased by 3.69 lats per one household member or by 3.6 percentage points in total consumption expenditures. In 2001 for households of the first quintile consumption expenditures on telecommunications services were 1.40 lats (compared to 0.24 lats in 1996), but for households of the fifth quintile –10.01 lats (compared to 1.51 lats in 1996) on average per one household member monthly.

          In 2001 four fifths of households had a fixed telephone line. The average number of mobile phones in one household was 0.4 (in the first quintile – 0.2, in the fifth quintile – 0.8). If calculated only for households using telecommunications services, the payment for this service in 2001 was 5.59 lats on average per one household member monthly (in the first quintile – 2.94 lats, in the fifth quintile – 10.42 lats).

          3% of households had Internet connection in 2001 (almost one percent of households in the first quintile and 7% of households in the fifth quintile).

          In 2001 consumption expenditures on electricity – 1.91 lats on average per one household member monthly – constituted only 44% of consumption expenditures on telecommunications services. Moreover, for the consumption expenditures on electricity the difference between the lowest and highest quintiles and between urban and rural households were not as big as for the expenditures on telecommunications services. In the first and second quintile the share of consumption expenditures on electricity in the total expenditures is growing over years, but in the wealthier households of the third, fourth and fifth quintiles this indicator has not changed over the last years or has even decreased.

          Consumption expenditures on natural gas (calculated for households who used this service – about two fifths of all households) were 1.04 lats per one household member monthly in 2000, and 1.10 lats in 2001 (in the first quintile in 2000 and 2001 – 0.72 lats and 0.83 lats respectively, in the fifth quintile – 1.36 lats and 1.27 lats).

          Household consumption expenditures on liquefied gas in cylinders are 2.5 times bigger than expenditures on natural gas (compared among households using the respective services).

          The share of railway services in the structure of household consumption expenditures over the last years has fluctuated from 0.3% to 0.4% for households in the cities and from 0.1% to 0.2% for households in rural areas. In 2000 average monthly household expenditures on railway services constituted 0.18 lats (0.22 lats in the cities and 0.09 lats in rural areas) per one household member. The average indicator increased to 0.23 lats in 2001.

[1] Regulated public services hereafter denote state regulated public services

[2] Analysis is based on Household budget survey data by Central Statistical Office

[3] Due to changes in organization of budget surveys, data for 2001 is taken from Central Statistical Office Household budget survey for the time period May 2001 – January 2002

[4] Since 2001 Central Statistical Office has revised the scope of services included under the section of telecommunications, as well have stated separately “internet services” and “internet connection”


[Energy]
[Telecommunications and postal sector]
[Railway]


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