Information Technology Landscape In Finland

Telecommunications Infrastructure

                    Finland's telecommunications infrastructure can be considered the most developed in Europe and maybe in the world.  This is due to a telecommunications density that may be second to none.  In fact, ninety-five percent of Finns live within a few kilometers of high-speed fiber optic cable networks and ninety-five percent of Finnish municipalities are covered by fiber optic cables (US Dept of Trade).  There is a very good reason for this high density and intense competition that one would find in the Finnish telecommunications sector.  Originally, when Finland was a Grand Duchy of Russia, the Finnish government would grant telephone operator licenses to anyone that was a Finnish company.  This would result in an inordinate amount of local telephone companies and the reason for this was to prevent the Russians from gaining control of the communications in Finland.  If there had been one central PTT like in most other countries, gaining control over a country’s telecommunications system would be very easy.  Thus, as late as 1938, Finland would have over 815 telephone companies.  This environment would foster intense competition among the companies as well as the suppliers of these companies as they would have to compete to differentiate themselves through products and services.  Therefore, it was early on that Finland set the table for the developed infrastructure that they have today .

                  There are two key players in Finland's telecom service sector.  They are the state-owned but privately run Sonera Corporation   (11,000 employees (US Dept of Trade) )(formerly Telecom Finland) and the Finnet Group, which is a consortium of 46 privately owned local telephone companies.

                The two main areas to look at in Finland when determining the density of their telecom infrastructure are fixed telephone lines and  mobile phones.

                Finland is the world's largest user of mobile phones.  The percent of penetration is around 75% as of  April of 2001 (EVA).   Mobile phones also have a relatively long history in Finland as well.  As early as 1982, Finland would introduce the analogue Nordic Mobile Telephone (NMT).  It was also the first to introduce the digital GSM standard that we find today, this occurring a decade later.  As of December 1998, Finland has become the first country in the world where the number of cell phones exceeds the number of wire phones (See chart #3 below).    Finland has also become the first country in Europe to grant licenses for 3G mobile networks, this being done in March 1999.

              Not only is Finland very populous in terms of mobile networks and phones, the density of the fixed wire telephone networks is also very high.  The networks are under the domination of two domestic companies, the Finnet Group and Sonera (See chart 1 below).  While Finland could once boast to having over 800 telephone companies, the dominance of these two players has been shaving the number of operators down to around 60, with over 40 of these belonging to Finnet.  This industry is characterized by moderate competition, mainly between the two big players, but is seeing its influence decline as more and more people turn to cellular.     

1.  Concentration and dispersal of the fixed line market in 1998  (Source: US Dept of Trade)

2.  Finland Telecommunications Equipment Market (Millions of $)  (Source:  US Dept of State)

3.  Comparison of the number of telephone lines and Cellular phone subscribers per country per 1000 in 1998  (Source:  EVA)