How was the Swedish Broadband Model Formed?

A Success Story in Europe

When Sweden’s neighboring countries across Europe discuss how to best create a telecom market characterized by competition, high connection rates to a fixed broadband network, good mobile coverage and low subscription fees, Sweden is often highlighted as a success story. Despite being a large country with a small population, almost all Swedish households and businesses today can connect to a fixed broadband network and use their mobile phones for both calling and surfing, whether they live in the archipelago, hike in the mountains, or sit in an office in the city center.

 

How was the Swedish Broadband Model Formed?

When the Swedish telecom market was deregulated in 1993, there were no actors willing to build fiber networks across Sweden. However, the need for broadband infrastructure that enabled digital communication was significant, particularly in the country’s municipalities. In many places, municipalities decided to start building fiber networks themselves. This trend spread quickly, and by the second half of the 1990s, a large part of Sweden’s municipalities had their own municipal networks.

The principle of the Swedish model was simple: local networks, publicly owned, or operated on behalf of the public sector.

 

The Role of Municipalities

From the beginning, the role of municipalities in the Swedish broadband market has been to promote competition in the telecom market and thus create favorable conditions for both broadband expansion and the construction of mobile towers.

Now, more than 30 years after the deregulation of the Swedish telecom market, this has
been a successful model well worth preserving.

More About Open Networks – The Key to a Competitive Market

Sweden consists of a variety of digital infrastructure owners, such as fiber networks and mobile towers, with infrastructure spread across the country. The Swedish broadband  model entails that owners of fiber networks allow other telecom operators to rent their infrastructure. This has created a new market for companies that sell communication services to businesses and households. In this way, end customers have also gained greater freedom of choice, and thanks to the strong competition, Sweden has, from an international perspective, low prices forthe services offered in the networks.

 

Even Mobile Operators Have Benefited from the Swedish mode

Thanks to Sweden’s extensive access to a well-functioning broadband infrastructure, even outside the major cities, operators have been able to rent from network owners and connect their mobile towers with fiber. This has created mobile networks with high transmission speeds, and Sweden has long been at the top when European countries are compared based on their mobile network expansion.

The Trading Platform CESAR2 – the Tool That Has Transformed the Market

Despite the large number of network owners in Sweden, it is easy for those who wish to rent infrastructure between different locations. Thanks to the municipal networks’ digital trading platform Cesar2, a mobile operator looking to connect its various mobile towers with fiber can easily do so without needing time-consuming direct contact with the various network owners, which benefits the future of mobile networks. An additional advantage of a shared trading platform is that it has established an industry standard for both agreements and the design of products. This further simplifies matters for the actors operating in a national market and who have agreements with a multitude of network owners from north to south.

The model of so-called open networks, where the network owner makes their infrastructure available and thereby promotes competition and choice in the telecom market, is highlighted as a success story in European contexts. In fact, the EU Commission, in its telecom code, wants the open network model to apply throughout Europe.

More about Infrastructure Development 

Sweden is large, covering an area of 449,964 square kilometers, making it the fifth largest country in Europe. An important factor behind the Swedish success story has been courageous decision-makers who early on recognized the importance of good access to broadband infrastructure – throughout the country. This includes, for example, municipalpoliticians who early on dared to invest in establishing their own municipal networks and parliamentary politicians and ministers who developed national strategies and negotiated funds that could be used for broadband support.

 

International and National Actors Praise Sweden’s work 

An OECD report highlights Swedish municipal networks as success stories by making infrastructure accessible, lowering prices, and increasing choice for consumers. The OECD writes the following about the Swedish model in the OECD report ”Development of High-speed Networks and the Role of Municipal Networks”:

”Worth noting is that Sweden is the OECD country with the highest proportion of fiber connections outside Asia. Here, municipal networks and the competition they have created have played a crucial role in promoting investments.”

The Swedish Post and Telecom Authority, PTS, states in its report, ”The Role of Municipalities in the Broadband Market – Guidance” from 2018 that municipal networks contribute to competition where there are multiple network owners:

”In municipalities where there are multiple network owners, it has been shown that the expansion rate is generally higher than in municipalities with only one network owner. Competition between different actors thus promotes expansion. Competition also leads to choices and lower prices for the municipality’s residents.”

The European Commission releases the annual report ”The state of the digital decade,” also known as DESI, which highlights Sweden as a mature digital country that was early with digitalization and has a history of high connectivity:

”The fact that both companies and authorities, both international and national, praise the Swedish model is evidence that the important societal role played by municipal networks has worked well.”

The Future of the Telecom Market 

Today, large parts of society have been digitalized. Schools, local businesses, and popular tourist destinations can all benefit from the opportunities of digitalization thanks to access to fixed broadband and good mobile coverage.

Sweden underwent digitalization in the early 1990s, and now it is considered a digitally mature country, with a population possessing high digital competence. Municipal networks continue to be a necessity for Sweden’s digital future. Municipal networks are community networks worth preserving and still important to further develop today.

As the expansion of broadband infrastructure in Sweden reaches its peak, in a future where several tools in education, healthcare, and social services are digitalized, municipal networks are there to provide reliable and secure networks with a continued commitment to development.

This makes municipal networks key players in the ongoing digital transformation of Swedish society.