Estonia’s telecom services offer strong coverage and speed, with affordable, high-quality mobile internet, but cable connections cost more than in neighboring countries.
Estonia ranks 24th worldwide for mobile internet speeds out of 102 countries, placing ahead of most European states.
Compared with the European average, Estonia has high fiber-optic coverage at 86 percent and most buildings not yet connected are located within 10 kilometers of the backbone network. However, in fixed broadband speed, Estonia ranks 66th out of 154 countries, which is below its potential. Networks would allow faster speeds than currently used, the Foresight Center noted in its review.
“Mobile internet prices are relatively low thanks to strong competition between three major telecom providers. Expanding the fiber-optic network, however, requires scale and lowering prices is difficult because service providers often control both the end-user access point and the cable, which limits operator choice,” said Uku Varblane, head of research at the Foresight Center, in presenting the new report. He added that Estonia’s fixed broadband market is small and commercially unattractive outside densely populated areas.
Estonia also imposes disproportionate and unnecessary requirements for building telecom networks, which drive up infrastructure costs. “One example is the requirement to install fiber cables two meters underground or to add an extra protective duct around a cable already laid in protective tubing,” Varblane explained.
The Foresight Center’s brief report pointed out that competitiveness in Estonia’s telecom sector could be improved by making the integration of telecom infrastructure a standard, legally required part of all construction projects, including roadbuilding. The spread of operator-neutral internet networks installed alongside power cables could also help.
According to Varblane, greater awareness among municipalities and landowners about modern telecoms would help prevent unreasonable requirements for network construction. “Housing associations and other landowners could build in-house fiber networks themselves. This would increase the ability of residents and businesses to choose between providers, which would help lower fixed broadband prices,” he said.
Despite deliberate cable damage in the Baltic Sea, Estonia has a strong number of international connections, ensuring uninterrupted telecom services for companies and residents. For intercontinental links, undersea cables remain the best solution and repairing them is many times cheaper than laying new ones, the Foresight Center added.
The brief report, “Trends and Competitiveness in the Field of Electronic Communications,” is based on a chapter from the competitiveness expert group’s study, “Electronic Communications as a Factor in Estonia’s Economic Competitiveness.” It was prepared under the Foresight Center’s research program, “The Future of Economic Competitiveness,” which analyzes Estonia’s long-term economic prospects, opportunities and obstacles and puts forward policy recommendations. The program is part of the work of the competitiveness expert group convened by the Riigikogu Economic Affairs Committee.
The Foresight Center is a think tank at the Riigikogu that studies future developments in society and the economy.
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