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Iceland - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. The incumbent operator in Iceland, Iceland Telecom (Landssimi Islands hf), took its current form in January 1998 when the postal and telecommunications operations of Post and Telecom Iceland (PTI) were separated. PTI itself had been formed the year before when the regulatory and operational functions of the Post and Telecommunications Administration were divided. The Post and Telecom Administration (PTA) is the industry regulator, although policy formulation comes under the remit of the Ministry of Communications. As a European Economic Area (EEA) member, Iceland is required to follow European Union (EU) legislation, and the 1996 revisions to the 1993 Telecommunications Law made provisions to open the telecommunications sector to full competition from January 1, 1998 in line with much of the EU. A new telecommunications law came into effect in January 2000, which included: provisions on a new licensing regime; open access to networks and services; interconnection; the introduction of number portability and carrier pre-selection; and, the implementation of the EU directive on Radio and Telecommunications Terminal Equipment to replace the former type approval regime with one of market surveillance. The law was amended in 2003 to take into account the evolution of electronic communications, fees payable by operators to the regulator, and to provide for the possibility of licensing third-generation (3G) universal mobile telecommunications system (UMTS) operators in the future. However, no timetable has yet been announced regarding the licensing of 3G operators in Iceland. The miniscule size of the market, coupled with the recent consolidation in the 2G cellular market, might also render an auction of 3G licences somewhat futile. Although the telecommunications sector is technically open to competition, in practice Iceland Telecom faces little direct competition. A second cellular operator, Tal, was licensed in 1997 and launched services in May 1998. Iceland Telecom and Tal both received GSM 1800 frequencies in 1998 and, in June 2000, four more operators were licensed to operate GSM 1800 services: Islandssimi Mobile; Halló! Frjals fjarskipti; Lina.Net; and, International Mobile Communications (IMC). Islandssimi launched services in early-2001, but Hallo never launched services prior to its late-2002 acquisition by Islandssimi. The combined Islandssimi/Hallo went on to merge with Tal in April 2003. Partnering with Vodafone of the UK, and trading as Og Vodafone, the resulting entity now poses the greatest competition to Iceland Telecom, in the fixed-line, mobile, and data/Internet markets. This competition was intensified at the end of 2004, when Og Vodafone acquired a controlling stake in key alternative fixed-line operator Lina.Net. IMC launched services in September 2002 under the Viking Mobile brand, but services are mainly being offered to corporate customers in the US who need international roaming facilities. Thus, it would seem that the mobile market will remain dominated by just Iceland Telecom and Og Vodafone. Following the breakdown of negotiations with a Tele Danmark Communications (TDC)-led consortium early in 2002 in connection with the sale of a 25% equity stake in Iceland Telecom, the Icelandic government was forced to reconsider its options. In July 2005, the government agreed to sell its 98.8% stake In Iceland Telecom to the Skipti consortium of local banks and investment companies. The IKr67,000 million transaction was formally approved on September 1, 2005. This report contains profiles on the following organisations: Post and Telecom Administration; Iceland Telecom; Viking Wireless; Lina.Net; Og Vodafone; Nyherji Ltd; Association of Icelandic ICT Companies.
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