saemi@simi.is

The year 1906 marked a milestone in the history of telecommunications in Iceland. In this year, a submarine telegraph cable was laid from Scotland through the Faeroe Islands to the East Coast of Iceland. Concurrently, a telegraph and telephone line was laid to the capital Reykjavik, thereby ending the country's internal isolation. A number of people were opposed to the rollout of the telephone line, arguing that wireless telegraphy was a more promising alternative. The current dispute of wired versus wireless communications is therefore not a new topic. Decades passed before all Icelanders gained access to the telephone system. The rollout of telephone lines in rural areas was finished around 1960.

Síminn built an advanced and cost-effective telecommunications network in Iceland. The first automatic exchanges were opened in 1932, and all exchanges had been upgraded to digital in 1995. The installation of an optical ring passing through most cities and towns began in 1986 and was finished in 1993. Around 3000 km of fibre has been laid. The fibre carries a 2,5 Gb/s SDH layer, upon which an ATM network is operated. An IP/MPLS network has been installed in cities and towns and ADSL is available to 86 per cent of the population. GSM services have been offered since 1994, but already in 1986 the Nordic Mobile Telephone network (NMT) was installed. The NMT network serves larger areas than GSM and is still in operation. It provides services to fishermen and to the large number of tourists enjoying the highlands of the country. GSM services, including GPRS, are available to 98 per cent of the households and the service penetration is 87 per cent.

The fibre ring passes through most towns and cities

International connectivity is provided with the CANTAT-3 submarine cable which passes Germany, UK and Denmark through the Faeroe Islands to Iceland and finally to Canada. Restoration is done using satellite links, which is far from satisfactory with regard to Internet connectivity. Therefore, a new submarine cable is on the drawing board that will pass from Iceland through the Faeroe Islands to Scotland.

In 1994, Síminn commenced the installation of a FTTC/FTTB broadband network. Since civil works are the most expensive part in such a network, the methodology for laying the network has been to seize the opportunity when trenches are open for other construction work. Currently, about 12 per cent of the households have fibre to their basement, all major companies are connected via fibre and 37 per cent of all homes are passed. The network is currently used for cable television broadcast and cable modem services. Digital television will be offered later this year, and options for providing Gigabit Ethernet connectivity are under investigation.

Síminn has a customer base that is highly receptive to new technologies and eager to enjoy their benefits. In return, the nation enjoys one of the lowest telephony tariffs amongst the OECD countries, both with respect to mobile and fixed telephony, business and residential. This is despite the fact that Iceland is a large country with a small population of only 286.000. About 80 per cent of the households are equipped with a personal computer and more than 70 per cent are connected to the Internet. The number of ADSL connections corresponds to 15 per cent penetration in terms of number of households.

Iceland is not a member of the EU but is able to participate in EU-funded research programmes through the agreement on the European Economic Area (EEA). On this basis, Síminn started to participate in a number of ACTS projects in 1994 and 1995 including the projects NICE, JAMES and AMUSE. Knowledge acquired in these projects on technical subjects like ATM, IP and ADSL has proven valuable for the subsequent build-up of networks and services. This is particularly true after the deregulation of the Icelandic telecom market in 1998. In today's competitive environment, telcos must rely on the knowledge and skills of their employees in order to implement correct strategies. Participation in collaborative R&D is a key to new knowledge and to being informed in the dynamic environment of telecommunications. R&D work was formalised within Síminn in 1998, when the R&D department was formed. The strategy was to have a small department that would participate internationally in collaborative research and would be able to assist in strategic planning and preparation of new services.

Collaborative research within Eurescom has become the cornerstone of Síminn’s R&D but participation in EU- and local research projects is also important. Furthermore, Síminn has had a good relationship with the University of Iceland and the Icelandic Gallup organisation that have contributed to Eurescom research projects on a subcontract basis. The R&D department belongs to the network division. The activities are, however, not confined to networking, there is also a focus on the subjects of user behaviour and commitment to research that aims at increasing the use of telecommunications in the long term. An example of this is research work in the fields of telework, tele-education and virtual communities. In the technical arena, Síminn has participated in projects on TMN, IP-Multicast, Always-On, and Future Access Networks.

In terms of turnover, Síminn is currently the smallest telco participating in Eurescom. It is clear that a small organisation has limited resources both to contribute as well as to utilise the benefits of Eurescom participation. The benefits of R&D often appear in the long term and can be indirect. However, Eurescom participation implies direct benefits including

• Access to a wealth of information regarding technical and operational subjects as well as information about the telecommunications market, e.g. user behaviour.
• Contacts and personal relationships with professionals from the other members and of the Eurescom permanent staff. This can be of great value to a small operator with limited resources and limited manpower.
• Eurescom operational procedures are simple and fast, yet efficient. This means e.g. that it is relatively easy to propose a new research project and participate in projects proposed by others.

For Eurescom it is important to have a broad constituency, to have access to a broad spectrum of ideas. The small operators play an important role in this respect. In addition to being able to offer interesting meeting places to Eurescom projects, Síminn can offer access to a well-informed user community eager to try out new gadgets and services.