Iceland is the European country that shows the highest penetration rate in online access. Renewable energy sources are preferently used to access the web. Iceland has proven to be a major hub of international web traffic, as well as a reference model for sustainable access. Iceland is considered to be the country with the fewest restrictions to Internet freedom, according to recent studies that evaluate obstacles to access, limits on content and violations of user rights.
It is estimated that over 97 percent of Icelandic population has access to the internet. That is the highest percentage of internet users for a European country. Mobile phone penetration on GSM, GPRS and NMT networks is among the highest in Europe. The Internet is also used by more than 90% of the population, and broadband penetration is widely available over ADSL and fibre networks.
Iceland’s telecom market is small but technologically advanced, providing modern services for its highly urbanised and prosperous population. A number of players have emerged to challenge the dominance of the two leading players Síminn and Sýn, which have interests in numerous sectors. Sýn was formerly Vodafone Iceland which was rebranded to reflect the company’s move into broadband and broadcasting following its December 2017 acquisition of most of the telecoms and media interests of 365 Media. The main regulatory body governing information and communication technologies (ICTs) in Iceland is the Post and Telecom Affairs (PTA), an independent agency under the direction of the Ministry of the Interior. The PTA supervises development, logistics, and fair competition in the field of telecommunications networks in Iceland.
Iceland’s economy combines a capitalist structure and free-market principles with an extensive welfare system. Except for a brief period during the 2008 crisis, Iceland has in recent years achieved high growth, low unemployment, and a remarkably even distribution of income. Iceland’s economy has been diversifying into manufacturing and service industries in the last decade, particularly within the fields of tourism, software production, and biotechnology.
Tourism accounted for 8.6% of Iceland’s GDP in 2016, and 39% of total exports of merchandise and services. From 2010 to 2017, the number of tourists visiting Iceland increased by nearly 400%. Since 2010, tourism has become a main driver of Icelandic economic growth.
Since the collapse of Iceland’s financial sector in 2008, government economic priorities have included stabilizing the krona, implementing capital controls, reducing Iceland’s high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy. Capital controls were lifted in March 2017, but some financial protections, such as reserve requirements for specified investments connected to new inflows of foreign currency, remain in place.
Síminn is the main internet and telecommunications operator in Iceland and runs fixed-line and mobile voice call services, as well as internet services and broadband television, holding the largest market share (slightly over 50%) in the country. Síminn is based on a merger between Landssími Íslands, which was privatized in 2005, and Skipti ehf. It has been going through difficulties with its creditors due to currency devaluation and the failure of the main Icelandic banks in 2008. In 2011, the company had an 18% fall in revenue, forcing it to restructure its business operations.