Paavo Laaksonen, Development Coordinator
Economic Development Agency of Suupohja Region

Paavo Laaksonen, Development Coordinator Economic Development Agency of Suupohja Region

Finland continues rural fibre expansion

Sunet, a non-profit municipality-owned network, is bringing fibre connections to homes, institutions and businesses in a 5,000 km2 area of Finland with low population density.

Today, 55 villages in the area share their own FTTH-network. This is open to anyone, providing equal opportunities to all parties who wish to provide services for end-users, who are free to choose their own service provider.The network enables better quality of life, brings a wide variety of new services, increases the value of houses and helps boost GDP. In 2004, however, more than half of the villages didn’t have broadband at all. National telcos were not interested in investing in this area and charging local municipalities a high price to rent copper connections.


Equal opportunities


“I have a background in FTTH networks engineering and did my thesis on profitability of fibre networks and public funding,” says Paavo Laaksonen, Development Coordinator, Economic Development Agency of Suupohja Region. “At that time, the Finnish government was freeing up money for networks in rural areas and I helped develop economic models. It soon became clear that even in the best case, payback time would be 15-20 years. Penetration rates for a fast network in a remote area are not necessarily high in rural areas. However if you want to build FTTH network in rural areas, you must reach high penetration rates even to get 20 years payback time. However, telco operators consider four years a prohibitively long payback time. For small companies and cooperatives, however, the cost was not necessarily prohibitive.”


“When we started this project, incumbents and major telcos had no interest whatsoever in rural areas and wanted to squeeze the last profits out of their legacy network investments,” says Aatu Samppala, CEO of Sunet, the company which builds and maintains the open network for the Suupohja and Northern Satakunta regions. “However, it’s now clear there is a solid business case, as there really is plenty of demand. If you can pre-finance the rollout, possibly with public funds, the profits will come, but this does require local initiative and good planning. The initiative was paid for by combining a bank loan, guaranteed by the municipalities, with national funding and a one-time connection fee for end users.”


Vast uptake


“In the first phase, municipalities covered the entire cost. At the outset in 2004, every location was examined to find out how much funding was available and how much additional funding would be required. The first public funding came from the EU in 2006. In 2010 and 2012, we received government support, which covered 40% of the investments required at the time. Today, fibre has been laid up to some 3,000 buildings. About 50% of the 10,000 buildings in our area can easily be connected, as they are less than 200 metres from a fibre hub.  We plan to continue expansion in the same way over the coming years. User uptake is good. In an average year, we invest some € 250,000 in building new networks from our own funds. Of course, we are looking at higher speeds, so we can continue to provide the best possible connections for our clients.”


Paavo continues: “Fibre has introduced many new possibilities for community work, businesses, private enterprise, education, healthcare, education and entertainment. The fast connections make the region more attractive and people as well as businesses can remain here. The network has helped improve 3G/4G-coverage as well as TV-quality in some areas. The current situation is good. We’re keeping developments going with different kinds of projects and focusing on digital services.”


This non-profit limited company owned by municipalities in Western Finland was founded in 2005. The purpose of the company is to build FTTH-networks. It owns the passive and active infrastructure and takes care of maintenance.The trunk line of the network forms a loop in the area of five Suupohja municipalities and three Satakunta municipalities. The line runs through the built-up areas of Kauhajoki, Isojoki, Karijoki, Teuva, Karvia, Kurikka and Siikainen and Honkajoki. Along the way it branches out into village networks. First, trunk connections to the municipality centres were made. This was followed by network extensions to built-up areas and villages by leading optical fibre connections to the borders of estates.

Students use a connected Smart Board at a local school.

A feeding robot at a local farm that can be controlled using a Smartphone.