Swedish owners have reason to be pleased with Telia, the leader in Estonia's telecommunications market – dividends for last year will amount to a record €80.9 million.

While the July inflation driven by rising communication service prices was an unpleasant surprise for observers, Telia Estonia's CEO, Holger Haljand, noted that telecommunications service prices have actually decreased in recent years.

"If we look at the last three years, during which there has been rapid inflation, the consumer price index has increased by 36 percent overall, while communication services have seen a decline. In the grand scheme, communication prices have fallen. However, price increases occurred earlier this year because at some point, the need to cover costs necessitates raising prices," Haljand explained.

"Telia plays a crucial role as a provider of essential services. Our investment volume is just so significant – we invest over €50 million to ensure that communication services work during crises," he added.

Telia's dividends exceed the investment volume by one and a half times.

Tele2, on the other hand, cannot boast such strong financial results. However, their customers were also displeased when they received notice in July that smaller packages were being phased out, forcing them to switch to more expensive services.

"Every year, we review these packages. If you look at our annual financial report from last year, you won't see any excess profits. We are in an unavoidable situation where we have to raise prices. Our net profit was €700,000," said Tele2 CEO Margus Nõlvak.

Nõlvak also mentioned that while strong competition helps keep mobile service prices at a reasonable level, the regulator should address the formation of wholesale and retail prices for broadband services. Nearly the entire wholesale broadband market is controlled by Telia.

"I believe that the Consumer Protection and Technical Regulatory Authority (TTJA) should address this issue," Nõlvak stated.

In 2021, the Competition Authority acknowledged that the obligations imposed on Telia regarding allowing access to cable ducts were not sufficiently effective in ensuring competitive operations.

"We have previously stated that this market is quite complex because, with few providers, competitors inevitably monitor each other's prices, and competition may not function as it would in a market with more providers," said Kadri Lepikult, head of competition administrative proceedings at the Competition Authority.

"The Competition Authority is quite thinly staffed, and we have several activities that also require our attention, so we will take this into account. However, we expect that this will be part of next year's supervision plan and perspectives," Lepikult added.

In Estonia, the cost of ultra-fast internet connections can be up to several times higher than in neighboring countries.

--

Follow ERR News on Facebook and Twitter and never miss an update!