Optical fibre to boost municipal connections – Government to contribute to costs

Broadband ratings measure the building and deployment of digital infrastructure on a scale of 1 to 5 stars. Based on the latest data, Finland as a whole receives a rating of 3 stars for fixed broadband. There remain, however, significant differences between municipalities in terms of the extent and use of communications networks, even though networks have been built actively, and the star rating of broadband networks has improved compared to last year in many municipalities.

Optical fibre construction has been a popular topic in the media in recent months. Over the past year, optical fibre has been actively marketed around Finland and new optical fibre providers have also entered the market. At its best, marketing has paid off: networks have been built and new households have been connected to optical fibre networks. In addition to the areas targeted by this marketing, Finland has a significant number of areas where the customer potential is not sufficient for implementing commercial supply. These areas need support measures, which include state aid for fibre-optic connections granted by the Finnish Transport and Communications Agency Traficom.

Significance of optical fibre acknowledged, but municipalities struggle with funding

The turmoil of recent years has further emphasised the need for reliable connections. The pandemic increased the number of people working from home and accelerated the transfer of services online in both the private and public sector. The energy crisis, on the other hand, has livened up discussion on the energy consumption of different network infrastructures and sustainable development.

Over the past year, Traficom has received primarily two types of feedback concerning optical fibre construction from regions and municipalities. “The good news is that many municipalities have acknowledged the significance of fibre-optic connections for their own vitality," says Senior Specialist Aleksandra Partanen from Traficom. “The reliability of optical fibre is highly valued in terms of future needs. Municipalities have also paid attention to the energy efficiency of optical fibre in this global situation, as the amount of data we consume increases in step with energy prices," Partanen adds. A more challenging issue, and the other primary source of feedback to Traficom, is that municipalities are struggling with making their budget stretch to cover a number of important issues. In many cases, the obstacle to building optical fibre networks seems to be money. Or the lack of it.

Government to support optical fibre construction with 32 million euros – Projects need to start soon

Broadband connection construction in areas where fast connections are not constructed commercially has for years been supported in Finland. Because Finland is a large country, a significant number of these areas remain. The fact is that optical fibre networks to cover the entire country will never be constructed by commercial operators. Finland has applied for funds for a broadband connection aid programme from the EU Recovery and Resilience Facility (RRF). For this year, the budgeted funds are 15 million euros, and 17 million euros will be allocated in next year’s budget proposal. The aid granted by Traficom for building optical fibre networks is tied to municipalities, in which the networks are built, participating in the costs with their own share. The good news is that the Government will invest significantly in building these networks.

The currently available 32 million euros must be granted to broadband projects during this and the following year, meaning that there is no time to waste. “I fully understand the plight of the municipalities, but I would like to stress that investments in optical fibre will impact the vitality of municipalities in the long term. Finland has high-quality mobile networks, but we also need comprehensive optical fibre networks alongside them,” says Partanen.