Iceland has one of Europe’s smallest economies and markets, and so growth within the telecom sector is limited. The market for some years suffered from the effects of the ongoing economic downturn which erupted in 2008, though economic growth has translated into improved investment in the sector as the main telcos upgrade both mobile and fixed networks. The government has also been supportive by promoting Next Generation Access networks, particularly affecting rural areas.

The incumbent, Síminn, found itself in a precarious position with creditors as a result of it having hedged against the falling króna and the failure of banks to honour their currency swap agreements. With falling revenue the company was obliged to adopt efficiency measures and streamline its operations. Having undergone a restructure in 2013 to separate its wholesale and retail activities, the company in early 2015 gained regulatory approval to merge with its holding company Skipti.

There is effective competition in all market sectors, with a small number of new players having emerged to challenge the dominance of the two leading players Síminn and Vodafone Iceland. The new entrants Nova and 365 have expanded their launched fixed-line services, complementing their existing presence in the mobile phone market. 365 is in the process of developing an LTE network in competition with Síminn and Vodafone Iceland, while in mid-2015 the latter set up a network sharing joint venture with Nova in order to extend the reach of their LTE infrastructure more cost effectively.

For more information see - Iceland - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses