The country's standing as a communications superpower is impressive.
Finland is one of the most advanced information societies in the world. It earned its position as a communications superpower on many criteria. The people of Finland have been well prepared to use high technology and information services.
The number of cellular phone subscribers as well as the number of Internet connections per capita in Finland is among the highest in the world. Nokia, Finland's biggest company, is the No.1 cellular phone producer in the world.
During the past few years, some countries have surpassed the Finnish numbers in certain specific areas, but Finland's overall standing is still impressive. Finnish mobile phone ownership was 87.6 per cent of the population at the end of 2002, according to figures issued by the Ministry of Transport and Communications. There were 4.2 million cellular phones in use in Nokia's homeland, which has a population of just over five million. Finnish mobile phone penetration exceeded 50 per cent of the population as far back as August 1998 - first in the world - and by December 1998 the number of cell phone subscriptions outnumbered fixed-line phone connections, the ministry said.
Another fast-growing sector is the Internet. According to figures from Network Wizards for January 2003, Finland had more than 1.1 million Internet connections, i.e. about 230 per 1,000 inhabitants. This figure, too, is the highest in the world excluding some tiny countries.
The Finns are not only connected; they are heavy users of Internet services. According to survey figures published by Suomen Gallup in August 2003, more than 1.5 million Finns between the ages of 15 and 79 used the Internet at least five days a week. More than half a million Finns used the Internet from home through a broadband connection. All schools and public libraries have been connected to the Internet for years.
Success of Nokia
What is the secret behind the Finns' success in harnessing what is one of today's most promising branches of industry, the communications sector?
Finland's rise to this position is not a coincidence, but the outcome of a consistent development effort. The success of Nokia, the flagship of Finnish communications, originated in the 1970s when it became a shareholder in Televa, a government-controlled company that developed digital telephone exchanges. The design, manufacture and marketing of digital exchanges developed in Finland received a considerable boost when Nokia entered the picture.
A strong domestic industry facilitated the decision of Finnish telecommunications companies to start modernising their telecommunications networks with modern digital technology at an early stage. The pay-back time for investment in network modernisation is short thanks to improved service, growing demand for telecommunications services and reduced maintenance costs.
Alongside digital exchanges for stationary networks, cordless telephones were also developed. Product development concentrated on both the base stations and the cordless handsets. Together with the other Nordic countries, two cellular phone networks based on analog technology, the NMT450 and the NMT900, and the European digital GSM network, were developed.
Mobile technology
From these modest beginnings grew one of the world's leading telecommunications groups. Nokia continues to be the technology leader in the mobile telecommunication business. In February 1999, the company announced that it had made the first call using the third generation mobile phone technology WCDMA (Wideband Code Division Multiple Access) through the Public Switched Telephone Network. And in summer 2003, the company brought to the market the first cellular phone supporting this new wideband technology.
Finland was the first country in the world to initiate the application process for licences for telecommunication with this third generation mobile technology, which is based on the network technology standard UMTS (Universal Mobile Telecommunications System).
Instead of selling licences in auctions to the highest bidders, Finland gave available licences to four operators, who had credible qualifications such as existing infrastructure and financial prospects for building the necessary network. In retrospect, this proved to be a wise decision, because high fees paid for licences in other European countries have ruined the economies of operators and jeopardised the rapid introduction of this new technology. Unfortunately this has delayed the introduction of a UMTS network in Finland too.
A second key area in which Finland is known worldwide in telecommunication circles is deregulation. Deregulation got under way in the 1980s with information technology (IT) services. The existing telecommunications legislation had been created for telegraph and telephone services and did not recognise IT.
Local telephone companies exploited the opportunities created by this loophole and, in 1985, founded a joint venture called Datatie which obtained a licence for IT services on the basis of the new telecommunications act in 1988.
Competition also forced the government telecommunications company to reduce prices and improve services. Encouraged by the favourable effects of competition, the legislation was subsequently reformed and gradual deregulation of the entire sector was set as the goal.
Competition in the mobile telephone network began in 1990, when Radiolinja obtained a licence to build its own GSM network alongside ARP, NMT450 and NMT900 networks. Two parallel GSM900 networks were established in Finland, as Telecom Finland Ltd., nowadays Telia-Sonera, decided to build one of its own.
In addition to these nationwide networks some regional networks are available in the most populated areas. These are based on the GSM1800 technology. The third-generation cellular telephone networks are under construction.
You might wonder how a small country like Finland can afford so many options for users. One reason is that the costs of using telephones are considerably lower than in many other countries. Competition makes companies efficient and keeps costs in check. Reasonable prices increase product popularity.
Broad-based cooperation
Services that improve the security of information networks have been developed in Finland. The Finnish company F-Secure Corporation is known for its network security programme package, which won the 1996 European Information Technology Prize.
Broad-based cooperation has kept Finland in the vanguard of telecommunications. FUNET's close cooperation with Telecom Finland, now Telia-Sonera, and regional telephone companies has benefited both parties. FUNET obtains the latest technology on a pilot-customer basis.
The academic community provides an excellent environment for testing new products, because the customers have expertise of their own, although users in these systems are not as critical as those in banking.
In recent years, emphasis in the development of communications networks has been on speeding up the network, since the growing volume of traffic calls for increased capacity.
Leading edge network technology in Finland is not dependent on just one supplier. For example, the vendor of the previous FUNET backbone was the Helsinki Telephone Company (now Elisa Communications) jointly with regional telephone companies, while the Telia-Sonera Corporation provides the current connections.
The current success of Finland and Finnish companies in the telecommunication business is a result of far-sighted, goal-oriented policy. Continuous work has been done on new programmes aimed at promoting the information society and its infrastructure.
The most recent set of studies on the information society and many of its aspects has been published by Sitra, the Finnish National Fund for Research and Development, with the Ministry of Education. Sitra's report, Building the Future Finland with Security and Opportunities, recognises the enormous progress made in advanced technology, economic and political liberalisation and intensified integration.
One excellent result of the recent strategic planning is the establishment of the Finnish Virtual University. This is a joint project of all 20 Finnish universities aimed at increasing their cooperation, developing e-learning possibilities and offering students more flexibility for inter-disciplinary studies.
In recent years, the European Union countries have followed Finland's example in the development of data communications infrastructure and the deregulation of the telecommunications sector. In these areas Finland has been, and will be, at the leading edge of development.
- Courtesy Virtual Finland/Ministry of Foreign Affairs of Finland. The writer is science editor at CSC, the Finnish IT centre for science, and author of several books about networks.
