Telecoms firms in Estonia either hiking tariffs or considering doing so

Telecommunications mast.
Telecommunications mast. Source: Siim Lõvi /ERR

Despite already being profitable, Estonia's three main telecoms providers have either hiked their prices or are considering doing so, ERR reports.

Elisa

Elisa, which recently won the auction for the first 5G bandwidth in Estonia, sent a letter to its customers last week informing them of a price increase from August which, if the customer was not happy with, could be remedied by the customer terminating their contract.

Elisa's communications manager, Marika Raiski says that tariffs would generally rise between one euro and €1.50, adding that detailed information would reach customers this month. Rising input costs were behind the fee hike, she added.

Raiski told ERR that: "This fee adjustment applies to private customers, and more precisely to those customer segments whose service fees have not yet taken into account the increase in input prices. We started with customer notifications from the beginning of last week."

"Elisa's input costs are rising every year and rapid inflation has affected this even more, as with the increase in the prices of other services in Estonia."

Raiski was unable to put a figure on the number of customers to be affected or the additional turnover Elisa forecasts from the increase.

ERR reports that the company's annual report for 2020 stated that it had 665,102 cell phone customers, making it the market leader in the private customer market in Estonian, meaning the increased turnover could come to up to €2 million.

Elisa reported its 2020 turnover at €121.8 million and profits of €26.7 million.

Tele2

Tele2 meanwhile says that it is not generally rising tariffs but has instead discontinued some of its more favorable packages, meaning those customers have to choose a new product at a higher price.

The company, which is currently in the running for the second or third (of three) 5G bandwidths, cited similar reasons as Elisa for this.

Ines Estrin, Tele2's Marketing Director, said: "In telecomms, as in other areas, operating costs have been rising, for example we are affected by the energy prices. As a result we have adjusted some of the solutions offered, such as closing a years-old package, which means that customers can choose a new Tele2 solution."

The company is however rolling out package which pledges not to increase prices to its customers, she added.

The company earned €8.2 million in revenue in 2020 and €1.8 million in profits.

Telia

Telia, also bidding for one of the remaining unclaimed 5G networks, would not directly answer questions on price rises, though also stated the same rise in input pries.

The company's CEO, Kristjan Viilmann, said: "It is clear that the significant increase in various input prices and the recent surge in inflation will affect many areas of activity, including the telecommunications sector. How this will affect the pricing of different service providers will probably be shown in the coming summer months."

Telia private customer and ERR journalist Mait Ots states that he does not remember when the company last raised its prices.

Telia is the largest of the three companies by 2020 turnover – at €344.8 million. The company made a profit of €27.3 million last year.

One other company, Lithuanian firm Bite, is also bidding in the ongoing 5G auction(s).

Three licenses are on offer; as noted, Elisa has claimed the first, at a price tag of €7.2 million last month. This means that one of the three remaining firms, Telia, Tele2 and Bite, will not win either of the two remaining licenses. The second auction is still ongoing and had passed the €4.5 million-mark as of Tuesday.

Inflation in Estonia in May stood at 20 percent, the highest rate in the EU.

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Editor: Andrew Whyte

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