Viestintäministeri Suvi Lindén Nordic and Baltic Region Telecoms Forumissa 8.9.2009

Nordic and Baltic Region Telecoms Forum
8 September 2009
Ms Suvi Lindén, Minister of Communications, Finland

Ladies and gentlemen

I am happy and honoured to be here and talk to you at this annual Telecoms Forum. My remarks today will mainly focus on the Finnish Government’s approach to promoting the construction of high-speed communications networks.

As we know, communications networks construction has a highly positive effect on economic growth and employment. And in the current economic situation, creating growth and jobs are particularly important political goals. But besides economic growth, government is also interested in equality between citizens. For example the Internet has become such a necessity commodity that ensuring everyone a connection with sufficient capacity is expected to be supported by government measures.

At the end of last year, the Finnish Government launched a new broadband action plan. In the first stage of the plan, legislative and regulatory measures are taken to
ensure that all citizens have access to an efficient Internet connection irrespective of their residence. An advisable connection speed would seem to be 1 megabit per second. All necessary legislative and licence amendments have already been made and the one-megabit broadband will be available to every Finn by the middle of next year.

The Government’s more ambitious goal is to make 100 megabyte connections available throughout the country by 2015. The high-speed networks are expected to be built mainly on commercial terms, and in that, you, distinguished representatives of business, will naturally play the key role. The Ministry aims, for its part, to
encourage this development. I wish everyone welcome to support this aim, whether already active in the Finnish markets or new to network construction!

Even if the government’s role in broadband construction still focuses on making the rules, new kind of action is also expected. Telecom operators’ role in society has changed. It seems that some citizens in our sparsely populated country would probably never have access to a high-speed broadband connection without public support. In the broadband action plan the Finnish Government expressed its commitment to subsidising high-speed networks in areas where their construction is not commercially viable.

The subsidy is estimated to apply to only around 4-5 per cent of people, which from the market perspective is a fairly small part of the population. However, for the people and businesses of the area the attainment of the goal is of great significance. And the Government has indeed received a lot of positive feedback on its initiative. For public administration, the preparation and allocation of this public subsidy is a new type of challenge that will require a lot of work. Subsidies for businesses need to be approved by the European Commission, for example. Broadband construction is, however, included in the Commission’s recovery plans, so I hope for a swift notification procedure.

As I already mentioned, broadband construction has a very important role in recovering the economy. The Ministry estimates that the government broadband project for sparsely populated areas alone will employ around 500 people during the construction period. Once the connections have been established, broadband investments will result in a growth burst. As a consequence of better telecommunications connections there will be an increase in the demand for goods and services and in the number of new jobs. The effect on employment will multiply compared to the construction phase and will be permanent.

Fixed networks, but also wireless solutions, provide opportunities for faster
connections. The constant increase of wireless communications and of many types of intelligent device has also made radio spectrum policy ever more significant. Spectrum management is not only a technical challenge but to a great extent also a social and political issue. The Finnish Government is determined to adjust spectrum use for greater flexibility and efficiency.

In Finland, operating licences for telecommunications have been issued on the authorities’ consideration, in other words by means of the so-called beauty contests. The beauty contest has a number of advantages, but the change in the communications sector and the international development have encouraged us to try
another method, auctioning, for the first time in the history of the Finnish communications policy. The next important licences, which will concern the 2.5 gigahertz frequency band, are meant to be auctioned in November this year. Someone may think that in terms of fiscal policy that might not be the best time for an auction. However, the timing reflects the idea that the primary reason for the auction pilot is not to collect as much money to government as possible but to introduce new kind of efficiency and flexibility in spectrum management. I hope that we will see many new operators, in addition to the old ones, in the auction in November.

The Government has also aimed at more flexibility in the frequency bands that are already in use. As many of you surely know, Finland was the first country in the world to allow UMTS in the GSM 900 area. This has delightfully increased our telecom operators’ interest in constructing 3G networks also outside the biggest cities. Last spring, again as the first in the world, we decided to allow LTE in the GSM 1800 area too. This has aroused a lot of attention abroad. I hope that our decision will be conducive to promoting the construction of 4G networks in our country.

After the themes of broadband construction and flexible use of spectrum, let me turn to a third significant frequency issue: digital dividend. Analogue television broadcasts
in terrestrial television networks ended in Finland in August 2007. As a result, a considerable number of frequencies that are appropriate for technological use became available. In summer 2008, the Finnish Government decided that part of the available frequency bands, the so-called 800 band, will be allocated to mobile and part to high-definition TV test broadcasts.

It is promising that many European countries have taken, or are about to take, a similar decision in terms of the 800 band. The only possible way to launch new inexpensive products onto the market is to have enough critical mass to support the
frequency policy. It seems that preconditions for an adequate market demand are there and many more countries are likely to join in.

A crucial question in taking into use the digital dividend is frequency coordination with the neighbouring countries. The European Union will probably eventually decide to allocate the 800 band to mobile communications. However, for EU border states, like Finland, it is necessary that frequency coordination is agreed between non-EU countries too. I, therefore, invited representatives from Baltic Sea countries to discuss digital dividend in a Summit in June. Ministers or high-level officials from nine countries, including Russia, were present at the Summit. The meeting recognised the unique nature of digital dividend and the fact that benefits of the dividend may only be achieved through international, European and bilateral cooperation. The countries committed themselves to working together in order to achieve as extensive broadband coverage as possible.

An especially important milestone in international frequency negotiations will be the World Radio Conference in 2011. Preparations for the Conference have already begun and Finland aims to be active also in this forum to make efficient use of the digital dividend as soon as possible.

Ladies and gentlemen

In this Telecoms Forum we will have an excellent opportunity to hear many interesting speakers. I hope that the Forum will give us all a lot of fresh ideas on how to promote new generation networks and services for the benefit of creating economic growth and jobs.

I wish you an inspiring seminar!