Tele2 launches assault on Finnish mobile landscape

3 Feb 2004

Swedish-based telco Tele2 has announced the launch of mobile virtual network operator (MVNO) services in Finland. The company, which already offers fixed and mobile telephony, data network and internet services under the brands Tele2, Tango and Comviq in 23 countries, has launched over the network of Finland’s second largest GSM operator Radiolinja, with which it signed an MVNO agreement back in June 2003. It is hoping to benefit from the changes to the Finnish telecoms landscape that took effect with the adoption of a new Telecoms Law (the Communications Market Act 2003) in late July. The new legislation provides for mobile number portability (MNP), which the state believes will be a positive measure in stimulating competition between operators with significant market power. A local consumer survey conducted in July 2003 concluded that around 14% of the nation’s mobile-owning public would change their service provider once the new law enabling MNP came into effect.

The biggest loser under the new rule changes is likely to be TeliaSonera, which had a 54.45% share of the market, or just over 2.47 million subscribers at the end of June 2003. Its next nearest rival, Radiolinja could claim just 29.9%, with 1.36 million users, while relative newcomer DNA Finland, which only launched in 2001, had garnered a reasonably impressive 15.65% share (710,000 customers) thanks in part to its acquisition of Telia Mobile’s assets in May. By mid-2003 mobile penetration in Finland stood at 87.26%, up from 82.5% the year before.

Once its MVNO service is up and running, Tele2 is hoping to enhance its Finnish portfolio further by developing a full suite of third-generation (3G) services. It acquired Finnish 3G licensee Suomen 3G in May 2003; having already held a 27.4% stake in the operator, it struck a deal to buy out the local Finnet companies which held the remaining interest for EUR7.9 million. Although Finland was one of the first European countries to award 3G concessions back in March 1999, the country’s operators have thus far adopted a laissez-faire approach to launching services. Since 1 January 2002 TeliaSonera’s next-generation network has been operational in Helsinki and its environs, Tampere, Turku and Oulu. A limited commercial pilot started in early 2003 and the company hopes to undertake a full launch as soon as there are sufficient numbers of 3G handsets available to support it. However, it does not see UMTS becoming commercially viable in Finland until 2004-05 and is instead forging ahead with plans to introduce data-based mobile applications over its 2.5G network. Meanwhile, in December 2002 Radiolinja and Nokia successfully conducted service area identity (SAI) positioning technology over the cellco’s pilot W-CDMA network. SAI provides location tracking for location-based services applications and it is hoped it will enable a smooth transition of location-relevant services from 2G to 3G – which is seen as a key element in the success of mobile internet services in Finland. The following month Radiolinja selected network installation company Tekmanni to install 2G and 3G terminal devices in its base station network.

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