Executive summary
Iceland has one of Europe's smallest telecom markets, and consequently there is little room for significant growth. Nevertheless, there is effective competition in all sectors: the country is open to all companies seeking licences or licence-based agreements, and boasts more than a dozen operators for fixed, mobile and Internet services. The two leading operators, S¨ªminn and Vodafone Iceland, essentially operated a duopoly until 2008 when the new entrants Nova and Tal launched fixed-line services. Together these accounted for about 15% of fixed-line subscribers by mid-2009. These new players have also begun to provide S¨ªminn and Vodafone with serious competition in the mobile phone market.
In common with all other sectors of the economy, Iceland's telecom market will continue to suffer from the grim effects of the recent economic downturn. Iceland has perhaps recorded Europe's worst economic collapse, while its performance in the medium term looks bleak. In 2009, the economy is expected to shrink by some 11%. According to Statistics Iceland, the Consumer Price Index (less housing costs) increased to 305 points in January 2009 from 251 points a year earlier.
The economic turmoil has translated into cautious spending among consumers, many of whom have lost their savings following the collapse and subsequent nationalisation of the banking sector. Across the board, there is little cash available for discretionary spend, and so consumers have reigned in their outgoings to the essential telecom services. As a result, operators which themselves have had difficulty funding network upgrades are unlikely to see revenue growth in the short term. Services on which they had hoped to realise significant returns, such as high-end mobile data applications, are expected to generate only moderate income during the next few years.
Telecom revenue increased 7% in 2008 though investment fell 2%. This fall is expected to sharpen in 2009 and 2010 as the pressure and effects of the economic downturn deepen.
Iceland-Key telecom parameters-2004;
Sector20042008
Fixed-line service:
Total subscribers (thousand)150141
Annual change-1%-5%
Fixed-line penetration (population)
Broadband:
Subscribers (thousand)55104
Annual change15%6%
Broadband penetration (population)
Mobile services:
Total subscribers (thousand)293330
Annual change11%1%
Mobile penetration (population)
Key highlights
Broadband adoption in Iceland is among the highest in the world. FttH networks have a growing presence and are laid as standard in new-build zones or redevelopments. The government's broadband strategy has implemented a scheme to provide all secondary schools, universities and research institutes with a 1Gb/s service, as well as universal broadband for all citizens. The government ITC policy to 2012 also aims to enable public services including health, education, government procurement, telecommuting and teleconferencing to be available online via a coordinated network.
S¨ªminn and Vodafone Iceland have a largely uncontested duopoly of the DSL market, though other ISPs operate on the margins. DSL market growth has fallen in line with its greater penetration:
Iceland's mobile phone penetration is among the highest in Europe, and consequently, growth has slowed steadily since 2006. The focus has shifted from GSM to 3G, and by the end of 2009 the 3G subscriber base will represent about a third of all mobile phone subscribers. The country has also been technologically innovative, being among the first in the world to assign the 450MHz frequency band for digital mobile services, while S¨ªminn has also expanded its HSPA network using the 900MHz band.This report covers trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP and IPTV developments. Subjects include:
Market and industry analyses;
Facts, figures and statistics;
Industry and regulatory issues;
Infrastructure overview;
Major players, Subscribers, Market share;
Internet, VoIP, IPTV;
Mobile Voice and Data markets;
Broadband (FttH, DSL, Wireless);
Convergence and Digital Media;
Broadband market forecasts for selective years to 2018.
Table of Contents
1. Executive summary
2. Key statistics
3. Telecommunications market
3.1 Overview of Iceland's telecom market
3.2 The Telecommunications Fund
3.3 Economic crisis-2009
4. Regulatory environment
4.1 History
4.2 Regulatory authority
4.2.1 Post and Telecommunications Administration (PTA)
4.3 Telecom sector liberalisation in Iceland
4.3.1 Privatisation
4.3.2 Interconnect
4.3.3 Access
4.3.4 Number portability (NP)
4.3.5 Carrier selection/preselection
5. Fixed network operators in Iceland
5.1 Overview of operators
5.2 S¨ªminn
5.3 Vodafone Iceland
6. Telecommunications infrastructure
6.1 National telecom network
6.2 International infrastructure
7. Broadband market
7.1 Overview
7.1.1 Broadband statistics
7.2 Government policies
7.3 Asymmetrical Digital Subscriber Line (ADSL)
7.4 Fibre-to-the-
7.5 Broadband Powerline (BPL)
7.6 Satellite
7.7 Wireless broadband
7.7.1 Local Multipoint Distribution Services (LMDS)
7.7.2 WiFi/WiMAX
8. Digital media
8.1 Overview of media convergence
8.2 TV-over-DSL (IPTV)
8.3 Video-on-Demand (VoD)
8.4 VoIP
9. Mobile communications
9.1 Overview of Iceland's mobile market
9.1.1 Mobile statistics
9.2 Regulatory issues
9.2.1 Roaming
9.3 Mobile technologies
9.3.1 Analogue networks
9.3.2 Digital networks
9.3.3 Amendments 2008
9.3.4 Third Generation (3G) mobile
9.4 Major mobile operators
9.4.1 Operator market shares
9.5 Mobile voice services
9.5.1 Prepaid
9.6 Mobile data services
9.6.1 Short Messaging Service (SMS)
9.6.2 Multimedia Messaging Service (MMS)
9.6.3 General Packet Radio Service (GPRS)
9.6.4 BlackBerry
9.6.5 High-Speed Downlink Packet Access (HSDPA)
9.7 Mobile TV
10. Forecasts
10.1 Forecasts-broadband subscribers-
10.1.1 Scenario 1-higher broadband subscriber growth
10.1.2 Scenario 2-lower broadband subscriber growth
10.1.3 Notes on scenario forecasts
11. Related reports
Table 1-Country statistics Iceland-2009
Table 2-Telephone network statistics-2008
Table 3-Internet user statistics-March 2009
Table 4-Broadband statistics-2008
Table 5-Mobile statistics-March 2009
Table 6-National telecommunications authority
Table 7-Household use of IT-2005-2008
Table 8-Telecom market revenue by sector-2004-
Table 9-Telecom market investment by sector-2004-
Table 10-Proportion of telecom market investment by sector-2008
Table 11-Fixed-line subscribers by operator-2006-
Table 12-Fixed-line subscriber market share by operator-2006-
Table 13-Fixed traffic (PSTN/ISDN) in minutes-2000-
Table 14-Fixed (national) traffic market share by operator-2005-
Table 15-Skipti financial data-2006-2008
Table 16-S¨ªminn market share by sector-2000-
Table 17-Access channels in the fixed network-2000-
Table 18-Fixed lines-1997; 1999-2008
Table 19-Access channels: PSTN, ISDN and DSL-1995; 1997; 1999-2008
Table 20-Internet connections by speed and market share-2007-2008
Table 21-Internet users and penetration rate-1996-2009
Table 22-Total broadband subscribers and penetration rate-2001-2009
Table 23-Broadband penetration by access type-2004-2008
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