Google recently announced the expansion of its data centre in Hamina. The data cable project represents Finland's attempts to attract other companies with massive data transfer needs to the country.The country plans to instead attract data centres with its own fibre-optic cable.

FINLAND has turned down the attempts of TeliaSonera International Carrier to convince it to embark on a major fibre-optic cable project. According to information obtained by Helsingin Sanomat, the Swedish provider of fibre-based communications services has laid out a plan to roll out a massive fibre-optic cable from St. Petersburg and possibly also from Finland via the Baltic countries and Poland to Germany.

The data cable by one of the world's leading providers of fibre-optic data communications services would allow for high-speed transmission of data and thus appeal especially to data networking companies.

However, Pekka Haavisto (Greens), the minister responsible for ownership steering, revealed last week that Finland intends to build its own undersea fibre-optic cable to Germany. With an estimated cost of 100 million euros, the national project is roughly ten times smaller than the one planned by TeliaSonera, Helsingin Sanomat believes.

Finland is an 11 per cent minority shareholder in TeliaSonera.

Sources for the story also reveal that preliminary official estimates suggest that participation in the TeliaSonera project would cost less than building the submarine cable.

The reasons for Finland and TeliaSonera to build the cable are markedly different. For Finland, fast and secure fibre-optic cables are means to attract foreign firms and investments to the country; for TeliaSonera they are means to profit from data communications and to strengthen its operations in the Baltic region.

A spokesperson at the Government's ownership steering department has confirmed that attempts to convince Finland to participate in a private data cable venture have been made, but declined to comment on the information about TeliaSonera's plans.

Kalevi Alestalo, a senior financial counsellor at the department, says that for the present the state wants to keep a tight rein on the project and to search for an alternative for the data cables of telecoms operators. “When looking for investments to Finland, our project is better,” he asserts.

In addition to appealing to firms such as Google and Yandex with massive data transfer needs, Finland believes the cable could transform the country into an hub for data communications from Asia and Russia.

Furthermore, Finland views that it is crucial to offer an alternative route for data traffic, with companies currently disinclined to rely on the Swedish data network due to Swedish authorities' right to monitor any phone and Internet communications crossing the country's borders.

Finland's unwillingness to embark on private cable ventures, in turn, stems from the fact that they are ineligible for EU subsidies. The European Union has allocated hundreds of millions of euros for the improvement of data communications within its borders and has already granted subsidies to data cable projects in Southern Europe. Also Finland has conducted preliminary talks with the union.

“It would be difficult to receive subsidies, if this was clearly the project of a single telecoms operator,” Alestalo reminds.

Elsewhere, Haavisto reminds that Finland is yet to take its final decision on the matter, thus leaving the door open also for a private solution.

Finland is now searching for investors for its data cable project, planning to raise two-thirds of the necessary funds from private companies and institutional investors. According to Haavisto, talks with interested parties have already been held but no contracts or letters of intent have yet been signed.

At present, the entire outbound data traffic from Finland could travel through a single pair of optical fibres, says Juhapekka Ristola, the director general of the communications policy department at the Ministry of Transport and Communications.

The data cable planned by Finland contains six pairs of optical fibres, whereas the cable planned by TeliaSonera contains nearly 50 pairs, Helsingin Sanomat believes.

Teemu Luukka, Maria Pettersson – HS
Aleksi Teivainen – HS
© Helsingin Sanomat
Photo: Markku Ulander / Lehtikuva