With a population barely reaching 5.4 million, it may be a surprise to many that Finland is setting a European standard in the race to deploy LTE and achieve one of the highest penetration rates for mobile broadband in the world.
TeliaSonera’s recent 4G launch in Helsinki and the Turku region is the first step towards national LTE, with many analysts anticipating that Finland will continue its progressive development over the next five years.
Although initial take up of 4G appears to be slow because of limited access, the same cannot be said for the migration from fixed-line broadband to mobile broadband. According to André Malm, senior analyst at Berg Insight, latest figures indicate a mere 20% of Finnish households have a fixed-line telephone subscription, while at least 90% of calls are made via mobile. “The Finnish market is a bit different to the other Nordic countries and any analysis on the region must be centred on mobile communication,” he says. “The Finnish local fixed-line operator was never nationalised so there were around 30 local monopolies, rather extensive in comparison to other Nordic countries.”
If governmental involvement was lacking in the past, this is not the case now. Finland’s National Broadband Action Plan, formulated by the Finnish government in 2008, has the principal aim of ensuring a comprehensive broadband provision throughout the country by 2015. In July 2010, Finland became the first country to make broadband access a fundamental human right, with all ISPs expected to provide 1Mbps internet access to every home and business across the country. This provision has since been extended, differentiated from other government broadband plans by its ‘universal guarantee’ to provide every citizen in Finland 100Mbps internet access by 2015. Finland spans over 338,000km2, 40% larger than the UK but with a population approximately 55 million lower; in sharp contrast is the UK’s lagging ambition to provide 2Mbps to every citizen by 2012.
“The rest of Europe has a lot to gain from Finland in terms of regulation in mobile, broadband and fibre access and forward-looking motivations of the main players,” says Henry Lancaster, senior analyst at BuddeComm. “Finland is ahead of most of Europe in regards to its improving telecoms infrastructure. It is now considered a national asset to be utilised for a range of socio-economic benefits, a concept well encapsulated in the trans-sector approach first spearheaded in Australia.
Although Finland’s partly state-owned incumbent TeliaSonera is pioneering LTE and 4G in the Nordic regions, with 15 cities already accessing LTE in Sweden, it is the Elisa Corporation that leads the 3G market in terms of coverage and connection speeds in Finland, according to research firm Point Topic. DNA is the third major telecoms operator in the region with its own network; together the three companies account for 98% of all mobile phone subscriptions in the country. The Finnish Communications Regulatory Authority (FICORA) notes that Elisa was 1% ahead of TeliaSonera in terms of subscriptions, with a 38% and 37% market share respectively in June 2010, while DNA retained the 23% share it held in 2009. In the fixed-line market, Elisa’s 38% market penetration dominated TeliaSonera’s 22% share, though fixed-line subscriptions totalled a mere 1.4 million.
“TeliaSonera has a strong differentiation potential from smaller local operators considering our global footprint, the opportunities for cross-border offerings and also purchasing and development,” said Marek Hintze, head of mobility services at TeliaSonera Finland. “The Finnish market remains competitive and mobile use is very advanced. Finland’s mobile business is in growth mode, driven by the popularity of smartphone and mobile data.”
Despite this, Hintze notes that Finland is lagging behind in the sale of smartphones compared to other Nordic countries, with “only half the phones presently sold being a smartphone”; this figure stood at 75% sales in Sweden. Malm sees this as a factor in developing mobile broadband uptake, and considers the recent financial problems of Finnish vendor Nokia as part of the problem. “Finnish people may have a cultural tie with Nokia, but they have been disappointed with their touch screen offering,” he says. “The iPhone does well in the region, but Blackberry take up is restricted mainly to the financial sector. It is remarkable that the iPhone has done so well in Sweden, where there is a domestic vendor in Sony Ericsson that also produces smartphones.”
To keep up with advances in LTE, FICORA has already allocated 1.8GHz and 2.0GHz spectrum. Spectrum is also due to be auctioned in the 2.5–2.69GHz band, clearing the way for MNOs to further develop LTE. “Growth in the sector is restricted by Finland’s small population,” comments Lancaster. “This, however, can be compensated for by operators readily exploiting the populace’s adherence to emerging technologies.”