1. Finnish NGA state-aid scheme Antti Kohtala Ministry of Transport and Communications Finland Digital Agenda Assembly, Brussels, 16th June 2011

2. 16.6.2011www.lvm.fi 2 Penetration rate Source: European Commission 60 60 53 53 48 48 43 43 43 39 39 38 38 37 37 36 36 34 34 33 33 32 32 31 31 27 27 26 26 25 25 23 23 22 22 18 18

3. 16.6.2011www.lvm.fi 3 Broadband access lines in Finland Source: Ficora

4. 16.6.2011www.lvm.fi 4 the supply is much bigger than the usage in 2012 In the broadband market the supply is much bigger than the usage in 2012 Households % An estimation of the broadband supply on the 1 st Jan 1212 and usage on the 1st Jan 2011 24 % 42 % 26 % 3 % 4 % Source: supply/operators, use/Ficora Fixed + mobile supply Fixed usage

5. 16.6.2011www.lvm.fi 5 Incumbent local operators in Finland Population: 5,4 million Area: 338 000 km2

6. 16.6.2011www.lvm.fi 6 Some adjustments in communications policy after 2008  The guiding principle was up to 2008 that telecom operators provide all communications services on market terms.  In future more specific regulation and public aid will also be used.  Some reasons for the policy change:  Proper communications services are necessary tools in day-to- day life.  Without adequate communications connections citizens cannot access information society services.  In terms of broadband Finland is fairly well covered, but also some new entertainment services, like IPTV will need high-speed broadband.  Some telecom operators also have been cutting back services in the sparcely populated areas.

7. 16.6.2011www.lvm.fi 7 Regional Broadband Activities  all provinces / Regional Councils (19) have been responsible to prepare regional broadband activities and strategies together with local municipalities  in a close cooperation with the national broadband task force, Ministry of Transport and Communications and Ficora

8. 16.6.2011www.lvm.fi 8 100 Mbps to everyone by 2015  Plan of Action approved by the Finnish Government in December 2008: “By the end of 2015 all permanent residences shall be within two kilometres reach of high-speed connection permitting at least 100 Mbps connections.” –Telecom operators will build mainly high-speed connections on market terms. This will achieve a population coverage of around 95%. –Extending the coverage to 100% will require that partly subsidized high-speed connections will be built to around 130,000 households in rural areas.  In subsidized rural areas’ projects –Telecom operator pays at least one third –Public aid – two thirds – in rural areas will be provided by the state, municipalities and the EU.  State budget 66 million euros  EU 25 million euros  Municipalities 41 million euros –Consumers will at their own expense acquire the subscriber connection up to the length of two kilometres

9. 16.6.2011www.lvm.fi 9 Conditions for public aid (Commission’s approval on May 6th, 2010)  In line with the Broadband Guidelines of the Commission  Only areas where there are no private investment plans to build commercially based high-speed networks are eligible for support  Technology neutral solutions  The aid will be allocated on the basis of open non-discriminatory tenders  The selected operator will have to provide retail services to end users for minimum 10 years  The operator has an obligation to prove that the price charged for wholesale access or service is reasonable and non-discriminatory (open access)  A claw-back mechanism in case the operator generates higher profit than foreseen

10. 16.6.2011www.lvm.fi 10 Cost shares of stakeholders in subsidized broadband projects FICORA = Finnish Communications Regulatory Authority EDTE Centre = Centre for Economic Development, Transport and the Environment EAFRD = European Agricultural Fund for Rural Development

11. 16.6.2011www.lvm.fi 11 8 % (41 municipalities) 22 % (59 municipalities) 33 % (242 municipalities) Cost shares of municipalities

12. 16.6.2011www.lvm.fi 12 Projects eligible for public aid (the last 5% of the population)

13. 16.6.2011www.lvm.fi 13 Maps of eligible areas in 19 regions of Finland Built-up areas and commercial extension areas (no public aid) Rural areas eligible for public aid

14. 16.6.2011www.lvm.fi 14 Status of the subsidized broadband projects  Some 800 projects to be implemented in 2010−15  Projects are located in 265 out of Finland’s 340 municipalities  100 projects ready to start this year (calls for tenders by 19 regional council agencies)  7 pilot projects are already under construction and will be finalized this year  Some key issues: –How much is the end-user willing to pay for the subscriber line? –Marketing of 100 Mbps services –Is the project economically viable for the operator (willingness to submit tenders)? -- typically 20 – 40 % of households will require FTTH –New models for implementation: cooperative societies, network operator owned by municipalities

15. 16.6.2011www.lvm.fi 15 Thank you for your attention! The Ministry of Transport and Communications is also preparing marketing material and brochures for operators and municipalities