Long-standing claims that internet is expensive and slow in Estonia clash with telecom companies’ assertions that everything is fine, with the Competition Authority promising to investigate if necessary, Postimees reports.
In early July, Delfi reported that Estonians are forced to use one of Europe’s slowest and most expensive internet services. Delfi highlighted that Telia, the market leader in Estonia, offers 1 GB/s internet in Lithuania for 25 euros, whereas in Estonia, the price is no less than 70 euros. In Sweden, 1 GB/s fiber-optic internet costs 62 euros, while 150 Mbit/s is 37 euros.
However, in Estonia, a 2021 study by the Competition Authority is often cited, revealing that Estonians supposedly do not desire faster internet, preferring slower and more expensive options. Kadri Lepikult, head of competition management at the Competition Authority, stated, “To draw conclusions, we first need to analyze data from different markets and the companies operating there. We have included this in our work plan. The new analysis will reveal whether the results of the previous study have changed and if the issue of internet accessibility requires further data collection.”
Kristjan Viilmann, head of consumer services at Telia, told Postimees that Estonia’s internet service prices are reasonable, being in line with European averages, especially considering the country’s small population and dispersed settlements. He also claimed that media price comparisons are not accurate, as they do not account for all the factors that influence prices, such as service availability, network quality, and technical support costs.
Viilmann pointed out that the amount of investment varies greatly between countries and how much government or local support was used to build networks.
“Telia offers the same prices in both sparsely and densely populated areas in Estonia, although building and maintaining networks in rural areas is very expensive,” he said.
In other Baltic countries, the availability of telecommunications services in rural areas is significantly worse than in Estonia, according to Viilmann.
“For example, Latvia ranks dead last in Europe in terms of rural cable network coverage, with less than 25 percent coverage, according to a recent study. Although Lithuania fares slightly better, they are still behind Estonia and among the last in Europe. In Estonia, nearly 80 percent of rural areas are covered by modern networks,” Viilmann said. “Therefore, the lower prices in neighboring countries are primarily due to the lack of investment in rural areas and the absence of service provision there.”
According to Viilmann, the quality of telecommunications services in Estonia is very good compared to the rest of the world, as shown by customer feedback surveys.
“Current connection speeds meet the expectations of most customers, and as a service provider, we see that the transition to higher speeds needs to be guided — many customers don’t see the need for it. We’ve even received criticism from customers when we’ve phased out older, slower packages.”
Evelin Tulp, head of telecom services at Elisa Estonia, explained that prices depend on the country’s standard of living, competition, and investments made by companies.
“It’s also important how much of the network has been built with state support or by private companies themselves, as in Estonia,” Tulp noted.
Excluding Tallinn and larger cities, Estonia is sparsely populated, meaning that offering ultra-fast cable internet in areas with few users extends the payback period and increases costs, Tulp explained.
Statistically, Tulp considers the quality of internet in Estonia to be good: “About 70 percent of Estonian households are apartments, and we can offer cable internet with speeds up to 500 Mbit/s in around 90 percent of them. Where optical cable is available, we can offer speeds of 1 GB/s.”
She added that the cost of 1 GB/s internet connections in Estonia has significantly decreased in recent years.
“Like any technology, it becomes more affordable over time. If the service doesn’t meet the customer’s needs, they should contact their operator and review the available options.”
Tele2 CEO Margus Nõlvak said that Estonia’s telecom networks are already very good, and within a few years, 5G coverage should reach everywhere.
“Currently, the three major telecom operators have already covered more than half of the population with 5G, and work continues.”
Tele2 claims to offer competitive technical solutions compared to its rivals, but there are still areas in Estonia where their solution simply does not reach. Nõlvak attributes this to Telia, which owns most of Estonia’s transmission and access networks.
“To achieve faster and cheaper connections, greater competition is needed, meaning the price at which a dominant market player allows competitors access should be regulated and audited by the Consumer Protection and Technical Regulatory Authority (TTJA). One of TTJA’s tasks is to regulate the conditions of wholesale services, including access and wholesale prices, offered by companies with significant market power. This directly affects retail prices,” Nõlvak said.
Viilmann from Telia dismissed Nõlvak’s accusations as unfounded.
“Telia provides other market participants access to its infrastructure based on TTJA’s requirements. Moreover, the prices for access to Telia’s cable ducts and other regulated wholesale services are cost-based and reasonable,” he argued.
According to Viilmann, access to Telia’s infrastructure does not directly impact the prices of telecom services, as using Telia’s infrastructure is just one of many options for providing retail services.
“Different operators use their networks, can utilize third-party infrastructure, and there are also networks built with state aid. Therefore, other market participants can set their retail prices independently of Telia,” he said.
Last week, it was revealed that TTJA plans to hire 12 additional employees to deal with these issues, in addition to the existing 27 officials.
Source: BNS
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