Top > Economic Affairs > The Asia-Europe Meeting (ASEM) > ASEM Seminar on the Digital Opportunity > Session 2: IT Infrastructures > Broadband for Nationwide Growth (Presentation)

Presentation
Broadband for Nationwide Growth

Dr. Arne Granholm
Special Adviser, Division for Information Technology, Research and Development, Ministry of Industry, Employment and Communication, Sweden

The IT Bill was delivered last year and the target was that Sweden should be the first country to be an information society for all. An all-inclusive information society requires investments in education and infrastructure, and physical infrastructure is a costly exercise in a country such as Sweden with a low density of population.

There are 90,000-100,000 km of fiber optic lines in Sweden, more than half of which are owned by the state-owned telecommunications company, Telia. The rest is divided, more or less equally, among four different owner categories: the municipalities, the Railroad Authority, the National Grid, and private network owners.

Concerning the strategic choice offered to the Swedish government, an IT Infrastructure Study commissioned by the government and delivered in 1999 has calculated that the volume of transferred information may be 1,000 times greater than today's volume over the next five years. One solution is to build new networks and another solution would be to open Telia's (the state owned monopoly's) network. The disadvantage with the latter option is that it would lead to a weakening of Telia's international competitive strength. This was a sensitive issue because the Industry Minister, under whose ministry such matters are handled, is at the same time the public owner of Telia, which during the last year has been in the process of privatization. At the same time, the minister is responsible for the process of stimulating competition against Telia. The solution proposed to the minister was that the government should stimulate the building of new nets, as a competing alternative to the Telia net.

In the IT Bill of 2000 it is stated that, "Over the next few years, households and business in all parts of Sweden should acquire access to IT infrastructure with a high transfer capacity. This is primarily to be achieved through market channels. Central government, however, has the overall responsibility for ensuring that IT infrastructure with a high transfer capacity is available nationwide."

The achievement of an information society for all, using the ordinary telephone network for Internet connection, is not far away in Sweden, where 80% of the population have access to the Internet. However, we are just at the beginning of a broadband society. Even if we include upgraded cable TV connections and ADSL, not more than 100,000-150,000 households have a broadband connection; that is at most just 3% of the population.

Most of Sweden consists of transport distances, empty of people but full of forests, swamps or mountain. The Infrastructure Study, commissioned by the Government proposed that towns with more than 3,000 inhabitants should be regarded as areas for the market: around 70% of the population live in such towns. Outside these towns, in villages and in the countryside, where 30% of the population live, some government support was regarded as necessary.

According to the Infrastructure Study, a fiber-optic network covering the whole country and extending as far as property boundaries should cost approximately SEK57 billion. Concerning a backbone network to all municipal centers, the government has decided that all main urban centers will be linked to each other with a cable that is available to all operators on commercial terms. Concerning a regional network, the government is to contribute SEK2 billion, with local municipalities receiving a maximum of SEK1.6 billion. In addition, tax concessions will be offered to subscribers connecting to broadband networks. These tax concessions will be made in 2002 and 2003 and are expected to be of marginal significance overall.

If the most expensive technique, fiber optics, is used all the way from the town centers up to private property borders, the government subsidy for urban and property networks will cover a relatively small part of the cost. It is, of course, unrealistic to expect broadband access for all, even in the remotest parts of the country, and the government subsidy would not suffice for such an undertaking. It is hoped that technological developments will enable connection for the remoter parts of Sweden.

In summary, the government subsidy is characterized by new broadband networks, avoiding monopolies through the requirement of openness, and a capacity for the transmission of multimedia services of high technical quality.

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