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State Aid

State aid: OK to fund broadband roll-out in remote areas




A project to provide rural areas of Iceland with publicly financed, high-speed broadband networks was approved by the EFTA Surveillance Authority today.

The roll-out covered buildings in rural areas that neither had, nor would receive, broadband services on market terms in the near future.

«Access to high quality broadband services, regardless of where you live, contributes to economic and social growth and is essential to avoid a digital divide in the population», Ms Oda Helen Sletnes, president of the EFTA Surveillance Authority, said.

Broadband deployment in Iceland is considered of high importance for the country's economic development and the goal is to secure 99.9% of residential and business premises high-speed internet access by the year 2022. While most urban households in Iceland today are offered high-speed broadband access, only a small portion of households in rural areas have this option.

For areas where there is no basic broadband infrastructure at all, or where there is no high-speed infrastructure and it is unlikely to be built within three years, the state aid rules allow for such infrastructure to be built with public financing.

The project in question was carried out by Síminn, following a tender organised by the Icelandic authorities in 2008. After the construction phase, Síminn was to allow for wholesale access to other internet service providers.

Following a complaint from a competitor, the EFTA Surveillance Authority started looking into the matter, and in 2013 decided to open an in-depth investigation. The complainant alledged that Síminn had gained a considerable advantage on the broadband market, as well as being over-compensated for their construction services. The Authority received comments from several interested parties as well as additional information and comments from the Icelandic authorities.

The Authority has now concluded that the measure is in line with the EEA state aid rules. The assessment has shown that the design of the project and the possibilities for effective wholesale access ensure that any distortion of competition caused by the state intervention is kept to the minimum possible.

Today's decision will be published in the register of state aid decisions on the Authority's website, normally within a month.


For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187


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