Communications Sector Review 2013

Transcription

1 Communications Sector Review

2 2 Communications Sector Review 2013

3 Index 1 INTRODUCTION Foreword Key questions from the viewpoint of customers Wireless microphones Radio links and cognitive radio International frequency planning Radio licenses and examinations DATA TRANSFER AND TELEPHONE SERVICES Subscription volumes Market shares Data transfer services Pricing of fixed network broadband subscriptions FUNCTIONALITY OF COMMUNICATIONS NETWORKS General communications network disruptions Radio frequency disturbances and regulation...of the radio device market Broadband 2015 project Availability of high-speed broadband Universal service Fi domain names Telephone services Pricing of mobile phone services Using mobile services abroad INFORMATION SECURITY General information security level National Cyber Security Centre Information security threats Denial-of-service attacks and targeted malware Information security threats in automation systems Data system break-ins and detected malware TELEVISION SERVICES Terrestrial television broadcasts Cable television and modern methods Information security of household network devices... and smartphones Ransomware of receiving television broadcasts High-definition television POSTAL SERVICES Number of postal items sent USE OF RADIO FREQUENCIES FM radio operations Delivery time of letters Post offices Frequencies of Yleisradio and commercial radio networks Short-term and small-scale radio operations FIGURES Short-term events Frequency auction, technological transition of television and......changes in the use of frequencies Television frequency resources

4 Introduction 1.1 Foreword The Finnish Communications Regulatory Authority (FICORA) aims at ensuring secure and easy communications for everybody in Finland. To achieve this goal, FICORA acts as the regulatory authority of electronic communications and the postal market, and promotes the functionality of these markets. FIC- ORA s information security duties were expanded at the beginning of 2014 when the National Cyber Security Centre was established under FICORA in compliance with the Finnish Cyber Security Strategy. FICORA promotes the functionality of the communications markets by increasing their transparency. For this purpose, FICORA publishes its Communications Sector Review that covers all of the sectors in which FICORA is active: telephone, broadband and television services, the utilisation of frequencies, cyber security, functionality of communications networks and postal services. Transparency of the markets was further increased by a service called MONITORI, opened in November 2013 on FICORA s website. The first stage of MONITORI consists of publishing information about communications network faults and disturbances. The service will be developed, and the plan is to start publishing also information about availability and quality by the end of this year. Several indicators show that the Finnish electronic communications markets are advanced. Key features include extensive use of the mobile network services, data subscriptions in particular, and the simultaneous fast decrease in the number of fixed telephone subscriptions and calls in the fixed network. Finland was also a pioneer in terms of frequencies last year: Finland was the first European country to reach a decision to allocate its 700 MHz frequency range to mobile broadband instead of television broadcasts. Finland is also a model country in terms of information security: Finland has been among the top countries in many information security surveys. This annual review by FICORA is based on sector and monitoring data regularly obtained by FICORA. It offers a comprehensive idea of how the sector is developing. I hope that you will enjoy reading these interesting facts and analyses! Asta Sihvonen-Punkka Director General 4

5 1.2 Key questions from the viewpoint of customers The queries submitted by customers to FICORA offer an idea of key issues and changes included in FICORA s sector, mainly from the perspective of the users of communications services. Most of the queries are about problems encountered by the customers or specific duties of FICORA. To understand the positive development of the sector, trends must be sought from other statistics. Most of the queries from customers submitted to FICORA in 2013 were about the obligation to pay the television fee, which ceased at the end of In 2013, FICORA processed more than 245,000 customer contacts, and approximately 200,000 of them were related to the television fees or refunding the fees. A little over 700 other queries related to television or radio services were submitted to FICORA; most of these queries were about sponsoring and advertisements in TV programmes. These queries were caused by, for instance, FICORA s decision about the national Lotto lottery sponsored by Veikkaus. The lottery was previously broadcast by YLE. In 2013, FICORA processed around 29,350 queries concerning domain names, while more than 4,500 customer queries about information security were processed over the course of the year. The variety of problems addressed in these queries are discussed in more detail in this review s section about information security threats. 1,400 customer queries about telephone and broadband services were processed. Many of these queries involved the availability of mobile subscriptions and the reception of the mobile network. FICORA also received a large number of queries about the demolition of the fixed telephone and broadband network. Many of the queries related to telephone services were, as before, about text message services subject to a charge. A recurring issue in customer queries about technical solutions of services was questions about internal networks of real estate buildings. One issue that probably influenced the number of queries submitted is the fact that FICORA s duties with regard to technical regulation were changed and related communications activities were implemented. A little over 9,000 customer contacts related to radio frequencies were processed over the course of the year. Most of these contacts were about radio licenses. Examinations and certificates, as well as radio and television reception problems, were also recurrent themes of queries. Several queries about the frequencies used by radio microphones and the expiration of the frequencies subject to license in the 800 MHz frequency range for radio microphones were processed at the end of the year, in particular. To resolve the problems involving radio microphones, FICORA published new guidelines for customers in its online service and introduced a new service for searching microphone frequencies. Questions concerning the closing of post offices were also prominently featured among the customer queries submitted to FICORA. A little over 300 customer queries about postal services were submitted in

6 2 DATA TRANSFER AND TELEPHONE SERVICES In 2013, data transfer and telephone services developed, in many respects, in compliance with the trends of the previous years. The strongest growth occurred in mobile communication network data transfer services. The development in the fixed network mainly showed as increased data transfer speeds. However, the utilisation of traditional voice services in the fixed network rapidly decreased, and there were some signs of a slowing down of growth even in the mobile communication network.

7 2.1 Subscription volumes The increase of the volume of mobile subscriptions stopped in At the end of 2013, there were around 9.3 million subscriptions, which is around the same as in The figure includes all mobile subscriptions, even those subscriptions that are used for data transfer services, but which do not contain voice and messaging services. Considering the strong growth of the total number of subscriptions, it is noteworthy that the shares of residential and non-residential subscriptions in the mobile network have remained stable. Approximately 75% of mobile subscriptions were used by households, while the share of non-residential subscriptions has remained at around 25% in the past few years and at around 21 25% in the long term. (Figure 1) Figure 1. Development of mobile subscription volume in Thousand subscriptions / /2006 6/ /2007 6/ /2008 6/ /2009 6/ /2010 6/ /2011 6/ /2012 6/ /2013 Household subscriptions Business subscriptions A small share of mobile subscriptions has been productised to resemble fixed telephone subscriptions. These subscriptions have a fixed network telephone number, and their pricing or service range possibly resembles that of a fixed network subscription. At the end of 2013, there were a little over 110,000 of such subscriptions. There were around 750,000 fixed subscriptions at the end of That is around 16% less than in Around 52% of these subscriptions were used by nonresidential, which means that the share of non-residential subscriptions is clearly larger in the fixed network than in the mobile network. The volume of fixed telephone subscriptions has continued to steadily decrease for a long time. Almost exactly one million subscriptions have been discontinued since There were around 1.7 million fixed network broadband subscriptions at the end of The number of these subscriptions has not changed much in the past few years. The peak of the strong growth in subscriptions was reached in 2008, followed by a mild decline until the first half of After this, the number of subscriptions has slightly increased again. It is likely that the number of fixed broadband subscriptions will not experience any major changes in the near future. The most significant changes also in the future are expected to occur in subscription technologies and connection speeds. 7

8 The relative development of the subscription volume can be studied in an illustrative manner by studying a subscription index where the volume of subscriptions in 2008 is awarded the value 100. According to this subscription index, the relatively largest change between 2008 and 2013 took place in mobile data transfer subscriptions. The volume of subscriptions with an unlimited data transfer rate has increased very quickly: there are around seven times more such subscriptions now than in The total volume of mobile network subscriptions has also experienced a major increase (of around 35%), while the volume of fixed telephone subscriptions has decreased by more than 55%. The volume of fixed broadband subscriptions has remained relatively stable. In 2013, there were 1.71 mobile subscriptions, 0.31 fixed broadband subscriptions and 0.14 fixed telephone subscriptions per each Finn. (Figure 2) FIGURE 2: Relative volume of data transfer and telephone subscription volumes in The relative volume of subscriptions in 2008 = Voice and data transmission services in mobile network Unlimited data transfer subscriptions in mobile network Broadband subscriptions in fixed network Telephone subscriptions in fixed network 8

9 2.2 Market shares The mobile network market shares should be studied based on the total number of subscriptions in the mobile network, because the same subscription is often used for telephone and data transfer services. The three largest mobile network operators in Finland are Elisa Oyj, TeliaSonera Finland Oyj and DNA Oy. Their combined share of the subscription market was 99% at the end of Elisa s market share was 40%, TeliaSonera s 35% and DNA s 24%. Compared to the previous year, TeliaSonera s market share increased by one percentage point, DNA s decreased by one percentage point and Elisa s remained unchanged. A look at a longer period reveals that the market shares of Elisa and more clearly those of DNA have grown, and TeliaSonera s market share has dropped. All in all, the fast increase of subscriptions has, however, been divided fairly evenly between market players. (Figure 3) FIGURE 3: Market shares based on mobile subscription in % 40% 30% 20% 10% 0% 6/ /2006 6/ /2007 6/ /2008 6/ /2009 6/ /2010 6/ /2011 6/ /2012 6/ /2013 TeliaSonera Elisa DNA Others Broadband and telephone services provided in the fixed network are usually sold as separate subscriptions. These subscription volumes have developed in different directions. While the number of telephone subscriptions continues to decrease strongly, the number of fixed broadband subscriptions has remained rather stable. Therefore, it makes sense to examine the market shares of fixed networks service by service. A rather large number of companies operate in the Finnish market for fixed telephone and broadband services. The subscription volumes of telecoms operators belonging to the same group have been taken into account when calculating these market shares. Elisa, TeliaSonera and DNA are the three largest individual players. In addition, operators belonging to the Finnet Group are a major player when their market shares are combined. At the end of 2013, Elisa became the market leader in the fixed network broadband subscription market with a market share of 34%. TeliaSonera s market share was 32% and DNA s 19%. The combined market share of the Finnet companies was 12% and the share of other telecoms operators was 4%. Compared to the previous year, Elisa s market share increased by around 3 percentage points, TeliaSonera s market share increased by around 2 percentage points. The Finnet 9

10 Association s market share decreased by around 4 percentage points and DNA s market share remained unchanged. These changes in market shares were partially due to a corporate transaction: Elisa purchased the Finnet Association s companies KYMP Oy, PPO Yhtiöt Oy and Telekarelia Oy. The rapid, major changes in market shares in the long term are related to corporate rearrangements. The 2007 entry into the market of DNA, consisting of the Finnet Group s companies, shows as a decline the market share of the Finnet Group, while the merger of Welho Oy with DNA in 2010 increased DNA s market in The most important change that is not directly linked to any corporate rearrangements was a decrease in Elisa s market share by around 6 percentage points between 2006 and The market shares in the fixed broadband subscription market may experience major changes in the future when the transfer from networks implemented with metallic local loops to fibre-optic networks occurs. In the future, especially those telecoms operators that have been among the first to start investing in new broadband technologies will be able to increase their market shares of fixed broadband connections. However, it is probable that the changes will not be very fast, but they will occur over the course of several years. (Figure 4) FIGURE 4: Market shares based on fixed broadband subscription volumes in % 35% 30% 25% 20% 15% 10% 5% 0% 6/ /2006 6/ /2007 6/ /2008 6/ /2009 6/ /2010 6/ /2011 6/ /2012 6/ /2013 TeliaSonera Elisa DNA Finnet Others 10

11 At the end of 2010, Elisa s market share of fixed telephone subscription market was 40%, TeliaSonera s 22% and the Finnet Group s 20%. Elisa s market share increased from the previous year by around 5 percentage points, while the Finnet Group s market share decreased by around 4 percentage points. The changes in the market shares were partially due to Elisa s corporate transactions also in this market. The greatest change in the long term occurred in 2007 when DNA was withdrawn from the Finnet Group. Since then, Elisa has stood out as the largest fixed telephone network operator. When studying market shares, one should keep in mind the waning of fixed network subscriptions: the number of subscriptions has decreased to less than a half during the review period. (Figure 5) FIGURE 5: Market shares based on fixed network telephone subscription volumes in % 35% 30% 25% 20% 15% 10% 5% 0% 6/ /2006 6/ /2007 6/ /2008 6/ /2009 6/ /2010 6/ /2011 6/ /2012 6/ /2013 TeliaSonera Elisa DNA Finnet Others 2.3 Data transfer services The use of mobile data transfer services has considerably increased in the past few years when measured with the number of subscriptions used for data transfer and the data transfer volume of these subscriptions. At the end of 2013, more than 6.1 million mobile network subscriptions had a monthly data transfer plan. In addition to this, 600,000 subscriptions used a data transfer service with a different type of invoicing principle. Other invoicing principles can be based on the volume of data transferred, for instance. Compared to the situation in 2012, the number of data transfer subscriptions subject to a monthly charge increased by almost one third, whereas the number of data transfer services with a different type of invoicing principle decreased by more than 40%. In 2013, some of the operators linked a data package subject to a monthly charge to all of their mobile subscriptions, which is partly seen in the development of data transfer subscription volumes. Based on the way people use their subscriptions and the subscription products available, it seems that soon almost all mobile network subscriptions will have some sort of an integrated data transfer service. Since there were around 9.3 million mobile subscriptions at the end of 2013, 11

12 66% of all the subscriptions had a data transfer package subject to a monthly charge, and the owners of a total of 72% of all the subscriptions paid some kind of a charge for the use of data transfer services. The latter share has quickly increased, from around 17% in 2007 to 52% in Data transfer subscriptions subject to a monthly charge can be divided into unlimited and limited subscriptions, depending on whether the monthly charge covers an unlimited data transfer volume or whether the data transfer volume is limited. Once the limit is reached, the data transfer speed can become slower or subject to an additional charge, depending on the contract. Around 55% of the data transfer subscriptions subject to a monthly charge had an unlimited data transfer volume at the end of The share of unlimited data transfer subscriptions of all data transfer subscriptions subject to a monthly charge was around the same in late 2013 as it was at the end of The share decreased to less than 50% in 2012, but now the number of unlimited subscriptions yet again grows faster than that of limited subscriptions. (Figure 6) FIGURE 6: Mobile network subscriptions based on data transfer agreement in % 90% 80% 70% 60% 50% 40 % 30% 20% 10% 0% 6/ /2011 6/ /2012 6/ /2013 No transfer plan Other types of data transfer plans Limited data transfer with monthly plan Unlimited data transfer with monthly plan This means that the number of mobile data transfer subscriptions has strongly increased and their use, based on the volume of data transferred in mobile networks, has experienced a huge increase. Around 191,000 terabytes were transferred in This figure includes both sent and received data. The data transfer volume more than doubled over the course of the year, and the data transfer volume has increased 365- fold from Even though the increase has slowed down in the past six years, it has still been exponential in the recent years, and the relative growth rate has been around 1.5-fold to 2-fold. In 2013, an average of 96 megabytes of data per each Finn was transmitted. (Figure 7) 12

13 FIGURE 7: Development of data volume transferred in the mobile network in Terabytes / /2008 6/ /2009 6/ /2010 6/ /2011 6/ /2012 6/ /2013 The number of fixed-line broadband subscriptions has remained fairly stable for several years now. At the end of 2013, there were around 2% more of these subscriptions than the year before. Of the fixed broadband subscriptions using different technologies, in 2013 there was most growth, in absolute terms, among Ethernet subscriptions (around 52,000 subscriptions more) and cable modem subscriptions (around 24,000 subscriptions more). The investments in fibre-optic networks show as growth not only in the volumes of FTTH (Fibre to the Home, fibre-optic local loop to home) subscriptions, but also in the volumes other subscriptions using the fibre optic network, such as Ethernet subscriptions. The number of subscriptions implemented using these technologies will probably increase also in the future. Even though the share of subscriptions using DSL (Digital Subscriber Line, broadband subscription implemented with metallic local loops of the telephone network) technology continues to decrease, around 61% of all fixed broadband subscriptions were still DSL subscriptions at the end of Of all the subscriptions, around 19% are cable modem and around 17% are Ethernet subscriptions. (Figure 8) FIGURE 8: Fixed broadband subscription volumes by technology in Thousand subscriptions Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 xdsl Ethernet Property and housing company subscriptions* Cable modem Wireless broadband FTTH Other *Number of properties and housing companies. Up until 2010, Ethernet subscriptions, etc., also included. End users have consistently switched to use fixed broadband subscriptions that are faster than before. At the end of 2013, the speed of two out of three subscriptions was 10 Mbps or more, and the speed of every sixth subscription was 100 Mbps or more. The share of subscriptions of more than 10 Mbps has continued to increase, but not as fast as before. At present, the fastest growth is in the subscriptions of 100 Mbps or more. Only around 4% of all the subscriptions were of the slowest type, less than 2 Mbps. 13

14 2.3.1 Pricing of fixed network broadband subscriptions The prices of fixed network broadband subscriptions decreased by around 5% in the whole of Finland in The largest price drop, almost 9%, occurred in the highspeed, 100 Mbps subscriptions. This is probably because the supply of high-speed broadband subscriptions increased and they became more common. The prices of 1 Mbps subscriptions slightly increased, however. The regional price difference was the largest between the Helsinki metropolitan area and the rest of mainland Finland, regardless of the data transfer speed. The prices are, on average, 18% lower in the Helsinki metropolitan area than in the rest of Finland. Prices in large towns outside the Helsinki metropolitan area were, on average, a little less than 4% lower than in other municipalities. (Figure 9) FIGURE 9: Price development of fixed network broadband subscriptions by speed category Mbit/s 2 Mbit/s 8 Mbit/s 24 Mbit/s 100 Mbit/s In December 2012, FICORA issued decisions on significant market power (SMP) in the wholesale market for access to the public telephone network at a fixed location (Market 4). These decisions entered into force on 1 March 2013, after which the obligation to charge costoriented prices only applied to eight of the key SMP companies on the market, while the other SMP companies were only subject to the non-discriminatory pricing obligation. For the first time, these SMP decisions extended the obligation to charge cost-oriented prices also to fibre-optic local loops. It also involved the obligation to follow a maximum level of the monthly charge and installation charge of local loops set by FICORA. FIC- ORA will determine the actual maximum fees in a separate decision. In 2013, FICORA continued the development of a new method for the assessment of cost-oriented pricing and the setting of maximum prices for the local loop market. FICORA s goal was to have the new method ready to be used when determining company-specific maximum prices for the monthly charge and installation charge of local loops by the end of However, FICORA was forced to postpone its maximum price decisions by several months until the spring of 2014 because telecoms operators failed to submit all of the data required by FICORA within the set deadline. Furthermore, some of the data that was submitted was defective and unreliable. The median of the monthly rent for a metallic local loop increased by 4% between October 2012 and October 2013: the median in October 2013 was EUR 12.40/ month. During the same period of time, the connection fee median increased by 1% to EUR , while the median of the monthly rent for a fibre-optic local loop decreased by 15% to EUR /month and the connection fee median decreased by 44% to EUR

15 The increase in the median price of a metallic local loop was caused by the fact that several telecoms operators almost simultaneously increased the monthly rent for their local loops by 10 and 20% between July and September FICORA expressed its concern about the impact of the price increase on competition between telecoms operators and thus on the prices of broadband subscriptions for end customers. In the case of fibre-optic local loops, FICORA observed that the monthly charges or installation charges of four telecoms operators still remained clearly above the costs presented by the companies in their pricing calculations, even after the entry into force of the new SMP obligations on 1 March After FICORA had submitted a note on this issue to the telecoms operators, the operators revised their pricing to better correspond to the costs laid down in their pricing calculations. These telecoms operators installation charges for fibreoptic local loops were decreased by 19 to 58% and their monthly charges were decreased by 9 to 37% in The price increases by the telecoms operators and the defects observed in the cost-oriented pricing principle further reassert the need to set maximum prices. The current regulation that is mostly based on ex post control is ineffective and time-consuming because FI- CORA is forced to challenge the prices set by the telecoms operators on a case-by-case basis. The telecoms operators are not willing to set their prices to the reasonable level required by law at their own initiative, and the operators do not get any sanctions from unreasonable pricing that has been detected retrospectively Broadband 2015 project One goal in the Digital Agenda of the European Commission is that all Europeans must have access to a 30 Mbps broadband connection by the year 2020, while the Finnish Government set a goal in 2008 of making a 100 Mbps broadband connection available to nearly all Finns by the end of By the beginning of 2014, FICORA had granted around EUR 25 million of state aid to companies participating in the Broadband 2015 project to build fibreoptic networks. State aid applications worth of about EUR 45 million are pending. The majority of the state aid has been issued to the provinces of Northern Ostrobothnia, Kainuu and Pohjois-Savo. Companies receiving the largest amount of the state aid are Kaisanet Oy (in Kainuu and Pohjois-Savo), Kairan Kuitu verkkoosuuskunta (in Northern Ostrobothnia) and TeliaSonera Finland Oy (in Lapland, Central Finland and Kymenlaakso). The availability of fibre optic connections has increased by around 25,000 households in the municipalities involved in the project. The broadband project has had a major impact on the availability of high-speed broadband, particularly in sparsely-populated rural municipalities. Around 41% of Finns live in single-family houses, 14% in terraced houses and 45% in blocks of flats. The areas eligible for the state aid in the Broadband 2015 project are Finland s most sparsely populated areas where around 5% of the population live. Most of the buildings in these areas are single-family houses, which means that the construction of new fibre-optic networks in the project mainly occurs in areas of owner-occupied single-family houses Availability of high-speed broadband At the end of 2013, around 69% of all Finnish households were able to obtain a fixed broadband connection with a minimum speed of 30 Mbps. The increase from the previous year was 5%. Around 41% of Finnish households, or around 11% more households than in 2012, had access to a subscription that was implemented to home or building by means of the fibre-optic network. The availability of high-speed broadband was the best in the province of Ostrobothnia where more than three out of every four permanent residences had the opportunity to obtain a high-speed broadband connection. The availability of mobile broadband subscriptions using the mobile network has also improved in the whole of Finland. In 2013, the availability of 30 Mbps mobile broadband connections improved by 10%. At the end of the year, such broadband connections were available to 85% of the Finnish population. Among the telecoms operators, the most eager builders of fibre-optic networks in 2013 were Elisa Oyj, TeliaSonera Finland Oyj, Anvia Oyj, Suupohjan Seutuverkko Oy and Savon Kuituverkko Oy. The fibre-optic networks built by these five telecoms operators gave around 100,000 new households the opportunity to obtain high-speed broadband in

16 2.3.4 Universal service In 2013, FICORA issued new universal service decisions by which universal service providers were designated for an even larger area in Finland. By these decisions, a total of ten telecoms operators were designated as universal service providers. A universal service provider was named for the provision of telephone services in 92 areas, for the provision of broadband services in 304 areas, for the provision of voice and text message services for the speech- and hearing-impaired in 93 areas, and for the provision of a symmetrical internet connection for hearing- and speech-impaired in 304 areas. The regional availability of universal service was studied in a total of 390 municipalities or parts of municipalities. The new universal service obligations of the telecoms operators will improve the opportunities of the persons with hearing and speech impairment to use electronic communications services, for instance. Video call and remote interpreting services required by the hearing- and speech-impaired pose special requirements for an internet connection: the connection must enable sufficiently fast bidirectional data transfer. Furthermore, emergency text message services are absolutely necessary for the persons with hearing and speech impairment Fi domain names The number of.fi domain names continued to increase. A little over 53,000 new.fi domain names were granted in 2013, which is a little more than in At the end of the year, there were more than 335,000 valid.fi domain names. (Figure 10) FIGURE 10: Valid fi-domain names Pcs / / / / / / /2013 THE YEAR was interesting in terms of.fi domain names: a long-term project on new domain names (the New generic Top-Level Domain Program or New gtld) of the Internet Corporation for Assigned Names and Numbers (ICANN) culminated when the first new gtlds of a total of around 1,400 applied gtlds were introduced online at the end of the year. The rest of the gtlds will probably be delegated in 2014 and The gtlds applied by Finns include.nokia,.kone,.helsinki,.promo,.city and three domain names in Chinese. ICANN globalised its operations during the course of the year by establishing regional offices in Singapore and Istanbul. The Snowden revelations added their own spice into the already active discussion on web administration the administration of web addresses, in particular. This also clearly increased the pressure to make the Internet Assigned Numbers Authority (IANA) global. The Finnish Code for Information Security and Communications Services was intensively prepared all through the year, also in terms of the.fi domain names. If the Government approves the proposal submitted to it, there will be major changes in how.fi domain names are managed: for example, the registry-registrar model and the removal of the limitations on the holder. FICO- RA has already started the preparation of these potential future changes. 16

17 2.4 Telephone services The volume of call minutes from the mobile network decreased in 2013 for the second year in a row. The annual decrease was small both in 2012 and 2013, less than one per cent. The volume of call minutes clearly decreased during the second half of 2012 and slightly increased during both halves of 2013, but did not reach the level achieved during the first half of Thus, the annual figures show a slight decrease but the bi-annual figures show a slight increase was the first year when the number of text messages sent decreased in Finland, by around 7% from the previous year. When examined at biannual level, the decrease had actually started during the latter half of The number of multimedia messages sent continued to increase, however, and the increase sped up from around 20% in 2012 to more than 35% in The volume of call minutes from the fixed telephone network decreased by around 10% in The decrease was still pronounced but not as fast as during the previous years. (Figure 11) FIGURE 11: Call and message volumes in Million pieces Mobile call minutes Fixed-line call minutes Text messages Multimedia messages IN 2013, the average Finn placed calls amounting to around 8.6 minutes per day. This figure includes calls made in both the fixed network and the mobile network. Finns sent, on the average, 2.6 text messages and 0.04 multimedia messages per day. All in all, the statistics on voice and message services probably reflect the impact of services used via data transfer connections. The volume of call minutes in the fixed network has continued to decrease at around the same level for a long time now, while the volume of call minutes in the mobile network has increased. Thus, call minutes used to transfer from the fixed telephone network to the mobile network. This balance has now changed, however: the volume of call minutes in the mobile network has not further increased in the past two years. This means that part of the total amount of the call minutes has been replaced by another means of communication; probably by services offered over the internet. Online services are probably the reason why the number of text messages sent has also decreased. The fact that the number of multimedia messages sent has increased is unusual in this respect, but it may have been caused by the fact that photos are easier to share with smartphones than older mobile phones. When comparing the way people used telecommunications services in 2008 with the way people use them now, one can see that there is a clear difference in the use of the different services. Here, the level of use in 2008 is indicated by the index value 100 and the changing index reveals the relative change from When studying the volume of voice and message services, one can see that the number of multimedia messages sent has increased relatively the most: the index for 2013 is 240 or nearly two and a half times the volume of For a long time, the relative growth of the number of text messages was only slightly faster than the growth of the number of multimedia messages, but the volume started to decrease in The relative development of call volume shows that the total call volume in minutes has slightly decreased and the call volume in the fixed network has decreased to 40 in the past five years. Even though the development of the number of messages and the volume of call minutes has not been similar (instead, it has been greatly divergent), the in- 17

18 crease in the volume of data transferred in the mobile network is in a class of its own. If the same indexation principle is used, the index for transferred data is almost 4,000 in (Figure 12) FIGURE 12: Relative volumes of the use of data transfer and telephone services in Change 2008 = Mobile call minutes Land-line call minutes Call minutes total Text messages Multimedia messages Mobile data Pricing of mobile phone services FICORA has compared the mobile call, text message and data transfer service prices of telecoms operators using price data obtained from public price lists. The prices did not experience any major changes in 2013, excluding special offers and fixed-term subscription agreements. The price level has not changed in several years. The interconnection fees for voice call termination, or termination prices, on mobile networks did not change in Since 1 December 2012, the termination price in the mobile network has been 2.8 cents per minute. Call termination on mobile networks means traffic from another telecommunication network that terminates on the called party s subscriber connection on the destination network. Call termination on mobile networks always involves traffic between interconnected networks. In its SMP decisions, FICORA has defined obligations regarding the market for voice call termination on mobile networks for five telecoms operators. Of these operators, DNA Oy, Elisa Oyj and TeliaSonera Finland Oyj are obligated to determine their charges for call termination in compliance with the cost-orientation principle. In 2012 and 2013, FICORA updated the model used to assess the costs of call termination on mobile networks to take into account the current technology used in mobile networks and how the services are used. The updated model better takes into account the technological development of networks and the increased volume of mobile data when allocating costs. The termination price in the Finnish mobile network, 2.8 cents per minute, exceeds the average termination price level in the EU and is clearly higher than in member states where the prices have been set using the method recommended by the Commission (the pure LRIC method). In 2013, FICORA actively discussed the termination price level with the three telecoms operators and encouraged them to conduct negotiations on lowering the price level. The mobile network operators were able to reach an agreement in their negotiations in February 2014: the termination price will be decreased to 1.87 cents per minute as of the beginning of September. 18

19 2.4.2 Using mobile services abroad The roaming prices while travelling in the EU decreased in 2013 when the new maximum prices laid down in Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union ( the Roaming Regulation ) entered into force on 1 July The new maximum roaming prices in the EU (including value added tax) are: 0.30 per minute for calls made when abroad 0.09 per minute for calls received when abroad 0.10 per text message sent when abroad 0.56 per Mb for mobile data used when abroad (including multimedia messages sent or received when abroad) These maximum prices will remain in force until the maximum prices are decreased yet again in compliance with the Roaming Regulation on 1 July FICORA regularly monitors compliance with these maximum roaming prices in Finland. The Finnish telecoms operators complied with the maximum prices in In addition to the maximum prices, the Roaming Regulation aims at promoting competition in the market with separate roaming service sales obligations. According to these obligations, telecoms operators are obligated to offer their customers the opportunity to use any roaming services provided by a competing roaming operator as of 1 July In July 2013, the Body of European Regulators for Electronic Communications (BEREC) published its guidelines on the implementation of separate sales of roaming services. These guidelines are not binding legislation, but the regulatory authority must take them into account. In September 2013, the European Commission issued a proposal for an EU Regulation about the European single market for electronic communications. In this proposal, a proposed alternative for separately selling roaming services in the EU was a Roam Like at Home model that is based on agreements. In the proposed model, users could within a reasonable usage limit use their mobile phones at their domestic prices when travelling abroad. The proposal was still being processed at the end of

20 3 TELEVISION SERVICES The traditional methods of receiving TV broadcasts are still going strong, but new technologies have become increasingly popular supplementary viewing methods. More and more households own devices that can be used to view high-definition TV and receive broadcasts with the new broadcasting technology. A step towards a sharper TV image was taken during the year by promoting the transition of the antenna network to DVB-T2. 20

21 3.1 Terrestrial television broadcasts According to a study on television in Finnish homes (TV-taloudet Suomessa) 1) by Finnpanel, 49% of Finnish households used an antenna to receive the television signal in The number of households using terrestrial television services has increased slightly in the long term their share is around the same as in 2012 but it has increased a couple of per cents from the mid-2000s. The free channels (such as the channels of YLE, MTV3 and Nelonen) cover most of the terrestrial television broadcasts watched in Finland. To watch the free channels, one only needs an antenna and a television set. No agreement with a service provider is needed. This is why the only way to study how people watch terrestrial television broadcasts is to implement a household survey. The companies broadcasting terrestrial television in Finland are Digita and DNA. No detailed statistics on terrestrial television network viewers are available. Digita used to be the only company broadcasting terrestrial television in Finland, which means that most of the households with a television antenna probably still receive Digita s broadcasts. Some of these households receive DNA s broadcasts as well. In 2013, the future of television broadcasting was planned in close cooperation with the parties active in the industry by a working group of the Ministry of Transport and Communications preparing the next phase of the technological transition of terrestrial television broadcasting. An interim report 2) released by the working group in November includes a specific plan on the transition from UHF television broadcasts to the new DVB-T2 broadcasting technology. The report describes the current status of the media industry, changes that have occurred and issues pertaining to frequencies that need to be taken into account when transferring to the new terrestrial television broadcasting system. The preparation process is based on goals laid down in the Communications Policy Programme for Electronic Media 3) of 2012, such as allocating the 700 MHz frequency to mobile broadband as of the beginning of 2017 and transferring to a new television broadcasting technology in The transition plan of 2013 is the first step towards the transition from the old technology to the new DVB-T2 technology and the use of a narrower frequency range. The transition will be implemented in a manner that takes into account the interests of different parties. The changes to occur in television broadcasting are mainly divided into two transitions that will affect the industry and consumers in different ways: reducing the frequency range used for television broadcasting starting the transition to the DVB-T2 technology that enables high-definition television broadcasts These transitions will affect both the television industry and consumers, which is why different parties active in the industry must commit to implementing the changes required by the transition at the right time. 3.2 Cable television and modern methods of receiving television broadcasts Another important method of receiving television broadcasts in Finland, in addition to a television antenna, is cable television. There are several cable television networks managed by local and national telecoms operators more than twenty operators in total. At the end of 2013, there were 1,475,000 cable television subscriptions, which is around 3% more than in % of these were residential subscriptions. Based on this number of subscriptions, one can state that around 57% of Finnish households have a cable television subscription. In a survey by Finnpanel 4), around 46% of households stated that they receive the television signal via a cable television network. The difference between these two figures is probably caused, at least partially, by the fact that some of the households that have a cable television subscription do not use it to watch television. A third traditional method of receiving television broadcasts, in addition to an antenna and cable television, is satellite television. According to the survey by Finnpanel, around 3% of Finnish households used received satellite transmissions in The number of households watching satellite transmissions has decreased at a steady rate (by around one third) from the mid-2000s. 1) Finnpanel Oy, TV-taloudet Suomessa 2013 vuosiyhteenveto, published on 9 December ) Ministry of Transport and Communications, Maanpäällisen televisiotoiminnan seuraava teknologiasiirtymä. Työryhmän väliraportti, published on 26 November ) Ministry of Transport and Communications, Sähköisen median viestintäpoliittinen ohjelma, valtioneuvoston selonteko eduskunnalle , published on 26 September ) Finnpanel Oy: TV-taloudet Suomessa 2013 vuosiyhteenveto, published on 9 December

22 A more modern method of receiving television broadcasts that has not become more common until in the past few years is Internet Protocol Television or IPTV. This method utilises a broadband connection. There are around twenty telecoms operators providing IPTV services. Some of them provide the services only in their own broadband network while others provide them also to the customers of other operators. At present, IPTV is usually a method that consumers use in addition to their antenna or cable television. At the end of 2013, there were 323,000 IPTV subscriptions in Finland. Almost all of them were held by residential customers. Based on the number of subscriptions, around 13% of Finnish households watched IPTV. IPTV technology is a relative newcomer to the consumer market, and the growth of subscriptions has been fast, around 26% this year. (Figure 13) FIGURE 13: Development of cable television and IPTV in /2013 6/ /2012 6/ / Thousand subscriptions IPTV subscriptions Cable TV subscriptions In the survey by Finnpanel, around 9% of households stated that they receive television broadcasts via an IPTV subscription. The difference between this figure and the calculated share of household IPTV subscriptions is partially due to the fact that the number of subscriptions has increased quickly a large number of new subscriptions were signed in the six months following the survey. and Video-on-Demand services increased in In the Finnpanel survey, more than a third of the households announced that they had used online television or Videoon-Demand services during the first half of Popular Video-on-Demand services listed by the survey respondents included Netflix, Elisa Viihde, Sonera Koti-TV, Watson, C More Play and Viaplay. This does not explain the difference fully, however. 3.3 High-definition television An IPTV subscription can only be used in combination with high-speed broadband. The speed of the fixed broadband must be at least 8 10 Mbps to watch IPTV in HD. In 2013, there were around 1.1 million fixed broadband subscriptions whose speed was 10 Mbps or more in Finland. Some of these connections are used by nonresidential customers. A rough estimate is that around two in every five households whose broadband subscription meets the technical requirements to receive IPTV actually have an IPTV subscription. The popularity of different types of online television High-definition television (HDTV) refers to a television image whose resolution is at least 1280 x 720 pixels, while the term Full HD that is often used when marketing television sets refers to a resolution of 1920 x 1080 pixels, which is the most common resolution in television sets sold at present. 22

23 When the transition of the antenna television network to the more modern DVB-T2 technology is complete, HD broadcasts will be possible. Alternatively, the broadcasting capacity of each channel bundle can be doubled. The goal of the television broadcasting technology transition set in 2013 is initiating an extensive transition right at the beginning of the new license period or at the beginning of What this means for consumers is purchasing television sets compatible with DVB-T2 or Antenna Ready HD sets. A key precondition from the industry s viewpoint for the transfer to extensive DVB-T2 broadcasting is an increased number of compatible appliances in households. To achieve this, extensive communication to consumers and guidance on how to select the correct television sets are required. The goal with the change of broadcasting technology is implementing the transition in a way that comprehensively takes into account the needs of consumers, television companies and the audiovisual industry. FICORA will be responsible for setting a schedule for communications during the transition and coordinating the duties of the parties involved. All of the parties active in the television industry authorities, media houses, operators and appliance retailers will be involved. The communications about the technology transfer will first focus on informing consumers which appliances are compatible with DVB-T2. FICORA started communications about DVB-T2 television sets to consumers and about the future frequency changes to antenna installation engineers already in The planned changes in television broadcasting will affect people who watch television broadcasts with an UHF MHz antenna, which means around half of all Finnish households. Households watching cable television or households using other technologies than a terrestrial television network for receiving television broadcasts (such as a satellite dish or IPTV) will not experience any changes. However, even these households will need a compatible television set to watch HDTV. (Figure 14) FIGURE 14: An appliance that is able to receive the new DVB- T2 antenna network signal and which can be used to watch HD broadcasting includes the label Antenna Ready HD. In the cable television network, HD broadcasts can be watched with an appliance including the label Cable Ready HD. According to Finnpanel s survey on television in Finnish homes 5), around 1.3 million households or 54% of all households that owned a television set had a television set that could be used to watch HDTV in % of households had a television set or digital set-top box equipped with a HD tuner. In August 2013, around 180,000 households or 8% of all TV households subscribed to HDTV channels. (Figure 15) FIGURE 15: Ability of TV households to watch HDTV in % 10% 20% 30% 40% 50% 60% HD ready screen HD tuner in the TV set or in digital set-top-box Subscribe to HD channels 5) Finnpanel Oy: TV-taloudet Suomessa 2013 vuosiyhteenveto, published on 9 December

24 4 USE OF RADIO FREQUENCIES The capacity requirements of radio links are continuously increasing because of the increased volume of data transfer services, and new frequencies for wireless broadband are being planned. An auction of 800 MHz LTE frequency bands took place over the course of the year. Short-term and temporary use of FM radios in events increased, and 15 new frequency entities were allocated to commercial FM radios. The changed frequency range of wireless microphones was also discussed during the year. 24

25 4.1 FM radio operations THE FM radio broadcasting frequencies in Finland have been designed in a much more efficient manner than in the neighbouring countries. Finland uses much more national, regional and local radio networks than the neighbouring countries when proportioned to the surface area and population. Furthermore, the network coverage areas are extensive and there are plenty of parties active in radio broadcasting. In 2013, discussion about the future of analogue radio broadcasting if the changes proposed in the bill on the Code for Information Security and Communications Services are implemented, was lively. In order to secure the opportunity to continue small-scale radio broadcasting and enable supplementing of the current networks, FICORA was planning new frequencies in different parts of Finland. Agreements on the use of these frequencies were also made with the neighbouring countries Frequencies of Yleisradio and commercial radio networks Since the beginning of the current FM radio license period in 2012, the networks have been annually expanded. In 2013, additional frequencies were added to the coverage area of Yleisradio and commercial radios. 55 new frequencies were planned and could be allocated for licensed commercial radios. These were grouped into fifteen new regional or local frequency entities for which the Government granted licenses. The frequencies were also used to supplement the coverage areas of already existing networks. Over the course of the year, the coverage of commercial radio stations was improved by regional transmission power increases. The number of radio frequencies has been increased each year since the end of the previous license period. (Figure 16) FIGURE 16: Number of radio network frequencies in Regional and local frequencies Frequencies used by national networks Frequencies used by the Finnish Broadcasting Company When planning new frequencies, special attention is paid in securing the coverage of the current networks. Furthermore, there are specific criteria for new frequencies and transmitters to ensure that no disruptions to other systems or adjacent residences will occur. FICO- RA has been able to offer sufficiently many frequencies for the ever-increasing number of short-term and smallscale radio stations. 25

26 4.1.2 Short-term and small-scale radio operations In the past few years, FM radio has been used by more and more events. The number of frequencies granted for short-term FM radio operations (of less than three months) has more than doubled since (Figure 17) Figure 17: Number of frequencies granted for short-term FM radio operations in FM-TRANSMITTERS are used at, for example, trotting races, cultural events and sports events, such as Helsinki Samba Carnaval, Neste Oil Rally Finland, FIS Nordic World Ski Championships and Finnish World Cup events, so that people can listen to the coverage in their cars, for instance. Many large events arranged particularly in the summertime use a short-term radio license to arrange FM radio broadcasting, sometimes covering the whole of Finland. The most extensive of such events have been the Summer Gathering 2013 of the Finnish Laestadian Lutheran Church and Christmas Radio. The radio network of the Summer Gathering continued broadcasting for a whole month on a record-breaking fifty short-term radio license frequencies, while Christmas Radio used 15 frequencies from the end of November 2013 until the Epiphany. In 2013, a total of 500 radio licenses for shortterm and small-scale radio operations were granted in the whole of Finland. and monitoring systems are often used when arranging concerts, in particular. Wireless cameras and voice communications systems of production companies or teams are often used at televised sports events. Some events offer their spectators the opportunity to listen to the coverage via a local FM event radio station, for instance. In such cases, the disturbance-free functionality of the wireless system frequencies must be ensured by carefully planning the frequencies to be used and, in the case of a larger event, also supervising their use onsite. 4.2 Frequency auction, technological transition of television and changes in the use of frequencies Short-term events Hundreds of short-term events, such as sports events and concerts, that involved the use of wireless devices were arranged in Finland in Wireless microphones A frequency auction for the 800 MHz frequency range started on 24 January 2013 and ended 170 days later, on 30 October The frequency auction peri- 26

27 FIGURE 18: The winners and the actual prices of the auctioned frequency band pairs in the 800 MHz frequency range. DNA - FDD1 ( MHz / MHz) 16.9 DNA - FDD2 ( MHz / MHz) 16.9 Elisa - FDD5 ( MHz / MHz) 16.7 Elisa - FDD6 ( MHz / MHz) 16.7 Sonera - FDD3 ( MHz / MHz) 22.2 Sonera - FDD4 ( MHz / MHz) EUR million od was substantially longer than originally anticipated because of strict competition for the frequencies and the bidding behaviour of the auction participants. By switching their bids, the auction participants were able to drop the prices back to the starting level. This prolonged the auctioning process. The radio licenses were granted at the end of The holders of these licenses were able to start their operations on 1 January (Figure 18) The future technological transition of television broadcasting will also involve the use of frequencies. In practice, the allocation of the MHz frequency range to mobile broadband as of the beginning of 2017 will require some changes in the frequencies currently used for television broadcasting. Before these frequency changes can be implemented, the television broadcasting systems and the joint antenna systems of housing companies and public buildings will have to be revised. The change will mean switching the frequencies of the channel bundles currently included in the 700 MHz range to the frequency range below 700 MHz. FICORA started the planning of these frequency changes in 2013 and will continue the planning process in Properties with a joint antenna system will be most affected by the change: antenna installation engineers will have to visit these properties to install the new channels. Single consumers will only have to retune their receivers. The impact of the changes on consumers will be minimised by means of careful and persistent frequency planning and proper communications Television frequency resources As of the beginning of 2017, the UHF frequency resources available for terrestrial antenna television broadcasting will be reduced by around 30% when the 700 MHz frequency range is allocated to wireless broadband. The frequencies used for VHF television broadcasting ( MHz) will not change. The change in the UHF range will require extensive frequency planning and the coordination of additional frequency resources to ensure that television broadcasting can be continued in the range below the 700 MHz range ( MHz) as of the beginning of the next license period or as of the beginning of

28 To secure the future of terrestrial television broadcasting and enable the flexible future planning of networks, FICORA aims at evenly distributing the UHF frequencies among Finland and the neighbouring countries, and generating extensive networks on a single frequency with the help of the new DVB-T2 technology. This approach will maximise the television frequency resources available for each country and enable more flexible channel bundle planning when agreements on the use of frequencies are made in advance. (Figure 19) FIGURE 19: Television frequency resources in 2017 and the UHF 700 MHz frequency range that will be allocated to wireless broadband. 96 MHz 224 MHz 56 MHz TV VHF TV UHF UHF 700 MHz IN 2013, FICORA continued its coordination negotiations with the neighbouring countries. The desired results were achieved over the course of the year in negotiations with Russia and Estonia. Sweden postponed its decision on the 700 MHz frequency until 2014, which means that the television coordination negotiations with Sweden had to be postponed as well Wireless microphones Implementation of the 800 MHz frequency range for wireless broadband networks as of the beginning of 2014 caused some changes in the use of microphones. Using microphones in the frequency ranges of MHz and MHz, which are subject to licence, has no longer been possible since the end of Preparation for this change started after the World Radiocommunication Conference in The change was discussed with the largest microphone user groups and parties importing microphones. All of the parties holding wireless microphone licenses on these frequency ranges were notified of the ending of their licensing period. Cooperation with the Ministry of Education and Culture took place in 2013 because parties active in the cultural sector were able to apply for a subsidy from the Ministry for costs arising from the frequency change. From the 800 MHz frequency range, the licence-exempt ranges MHz and MHz can still be used for wireless microphones. Due to the change made in the use of the 800 MHz frequency range, users of wireless microphones have, since the beginning of 2011, had the opportunity to use the frequency ranges primarily reserved for terrestrial television broadcasting, MHz, MHz and MHz. Of these, the frequency range MHz will only be available until the end of 2016 because the range will then be allocated to wireless broadband networks along with the rest of the 800 MHz frequency range according to the resolution made in Any frequencies of the frequency range reserved for television broadcasting that have not been allocated to any local television broadcasts may still be used for wireless microphones, provided that a license is obtained. FICORA launched a frequency search service on its website in 2013 to facilitate the finding of frequencies. 28

29 4.2.3 Radio links and cognitive radio There are plenty of frequencies available for radio links, but there is always a shortage of frequencies in the most popular ranges in specific geographical areas. The capacity required by radio link connections is continuously increasing as broadband becomes more common and the capacity of mobile networks increases. The graph below shows that operators have replaced old radio links of a narrower channel width with radio links of a broader channel width in the past few years to increase the modulation and increase the capacity of the radio links close to 1 Gbps. (Figure 20) FIGURE 20: Number of radio relay hops based on channel widths in Pcs Channel width (MHz) Research on cognitive radio networks continues. New solutions combined with licensing methods that will make the use of frequencies more flexible will ease the demand for the most popular frequencies of less than 3 GHz in the next few years. The utilisation of frequencies will be made more flexible also by allowing the use of a variety of devices on several frequency ranges together with other radio systems. This will make the planning of the use of national frequencies easier, which means that the best frequency range for each application based on their intended use can be allocated. This procedure will meet the needs of programme production, in particular (radio microphones and wireless cameras, etc.). 29

30 4.3 International frequency planning Decisions on the global use of radio frequencies are made at the World Radiocommunication Conferences (WRC) of the International Telecommunication Union (ITU). These decisions directly influence the use of frequencies also in Finland. For example, all of the currently used global and regional frequency solutions for mobile networks are based on previous WRC decisions. The next WRC will be arranged in Finland in 2015, and the preparation of the conference is already well underway in Finland and abroad. The most important issues for Finland to be discussed in the WRC 2015 are the allocation of additional frequencies for wireless broadband networks and a final decision on the allocation of the 700 MHz frequency range for wireless broadband networks. Technical issues of the conference are prepared by the WRC preparation working group of FICORA. The group includes representatives of various stakeholder groups. A national proposal on the additional frequency ranges for wireless broadband networks has already been submitted to be processed in the working groups preparing for the WRC in Europe, and several of the frequency ranges proposed by Finland will be submitted as the pan-european proposals to the WRC. A representative of FICORA carries the main responsibility for pan-european preparation of this item on the WRC agenda. The main focus in the preparation of the final decisions on the 700 MHz frequency range is on avoiding disruptions caused by radio systems to each other. At the national level, this means determining such technical parameters for wireless broadband networks that will eliminate disturbances to the television operations that will be transferred to the less than 700 MHz range. In terms of the neighbouring countries, the parameters must be specified in such a manner that the 700 MHz wireless broadband network in Finland will not disrupt the radio navigation system in Russia, in particular. Finland will be one of the first countries to use the 700 MHz frequency range for wireless broadband, which means that all of the other countries bordering Russia will carefully monitor the technical limitations Finland needs to apply to use the frequency range for broadband networks. The other countries bordering Russia will probably adopt the Finnish model at a later date. Aalto University is currently planning Finland s first satellite, Aalto-1. Finnish space experts from other universities and industries are also involved in the satellite project. In 2013, FICORA started the international frequency coordination for Aalto-1. The satellite s launch and commissioning may be possible next year. Even though Finland is not a satellite country yet, FICORA already protects Finland s interests also in the satellite frequency ranges. FICORA is active in the working groups of the European Conference of Postal and Telecommunications Administrations (CEPT) and the Radiocommunication Sector of the International Telecommunication Union (ITU-R) whose goal is protecting terrestrial radiocommunication systems. 30

31 4.4 Radio licenses and examinations Radio LICENSES were actively applied for and radio examinations were actively passed also in At the end of the year, there were 68,109 valid radio licenses, compared to 66,733 licenses in The share of maritime radiocommunication examinations was almost exactly the same as in (Figure 21, 22) FIGURE 21: Distribution of radio licences for different purposes in 2013 The number of radio licences Private radio networks 44,017 Vessels and aircraft 13,888 Radio amateurs 7,079 Radio and remote control 1,404 Radio links 492 Aviation and maritime systems 405 Personal locator beacons 204 Radio microphones 172 Mobile networks 75 FM radios 56 Others 317 FIGURE 22: Share of various maritime radiocommunication examinations in % 20% 40% 60% 80% 100% SRC examination General Operator s Certificate GOC Restricted Operator s Certificate ROC LRC examination 31

32 5 FUNCTIONALITY OF COMMUNICATIONS NETWORKS Around the same number of extensive communications network disturbances occurred in 2013 as in Most of the disturbances were due to damage caused by storms at the end of the year despite the fact that storm damage repairs proceeded slightly faster than before. The number of radio interference also seems to be consistently decreasing. 32

33 5.1 General communications network disruptions In 2013, FICORA received around 200 notifications regarding severe communications network faults and disruptions from telecoms operators. Less than twenty of these notifications were classified as severe class A faults that influence more than 100,000 telephone and internet service users or 300,000 television and radio service users in an extensive geographical area for a minimum of 30 minutes. The number of such faults was almost the same as in A total of six longterm class A faults (lasting more than six hours) were reported. More than half of the extensive disruptions influenced the mobile communications network or radio services, and the rest influenced television services and fixed network services. The impact of these severe disruptions on customers could, in most cases, be eliminated in less than two hours from the start of the disruption. Some disruptions were eliminated in less than an hour. All of the disruptions that lasted more than 24 hours were caused by power failures, which were the result of storms. Storms Eino and Seija in late 2013 influenced the general communications network in almost all of Finland. Extensive disruptions caused by natural phenomena were repaired slightly faster than in the past few years, mostly because the telecoms operators have improved their cooperation. A coordination group for disruptions established by FICORA has also assisted in the recovery from severe disruptions. The group includes members from the electricity and telecommunications sector, as well as authorities. The plan with the group is to develop operating methods that can be applied to the proactive prevention of and recovery from disruptions. FICORA published its disruption map service as part of the MONITORi service in November The map offers a visual guide to the impact of communications network disruptions in terms of their duration and geographical location. It is meant to be used by service users. Furthermore, the map service will support the current communications practices of the telecoms operators. Monitoring of communications network disruptions is one of FICORA s on-going silent duties. The importance of monitoring can be clearly seen when there is a severe storm. In 2013, telecoms operators reported more than 250,000 disruptions. Most of them were reasonable or minor in scope, typically disruptions that simultaneously influenced less than 1,000 customers for more than 30 minutes. Telecoms operators are obligated to report any more severe disruptions to FICORA as severe communications network disruptions, which are mentioned above. (Figure 23) FIGURE 23: Division of disruptions between services in Pcs Fixed (data) Mobile (voice) Cable tv Fixed (voice) Mobile (data) IPTV Other wireless data VoIP Q1 Q2 Q3 Q4 33

34 Most of the disruptions during all four quarters of 2013 involved fixed network internet connections. Experience has shown that disruptions in the fixed network are rarely so extensive as to be classified as severe disruptions, but they influence a large number of customers because they are so common. The typical repair time of a disruption is something between twelve hours and two days, but most of the disruptions are repaired in less than three hours. (Figure 24) FIGURE 24: Development of announced repair times of disruptions in Q4 Q3 Q2 Q1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% < 6 h 6 h - <12 h 12 h - <2 days 2 days - <7 days 7 days - <21 days 21 days or more The underlying reasons for disruptions varied a great deal from one quarter to the next. The most major changes that occurred include a smaller number of configuration problems and a larger number of power failures towards the end of the year. The number of power failures increased towards the end of the year because of the extensive storms. Some of the differences were caused by the fact that the disruption statistics system was revised over the course of the year, however.. (Figure 25) FIGURE 25: Underlying reasons for disruptions in Hardware malfunction Spontaneous or unclear Natural phenomenon Customer s hardware problem Power failure Software malfunction Configuration error Power unit system Temperature problem Excavation Human error Water damage Vandalism Fire Q4 Q3 Q2 Q1 34

35 5.2 Radio frequency disturbances and regulation of the radio device market The number of radio frequency disturbances studied by FICORA has steadily decreased year by year. There were a total of 125 such disturbances in The number of disturbances has decreased because of the transition from analogue radio systems to digital ones and because parties active in the sector have improved their mutual cooperation. Even though the number of disturbances has decreased, the disturbances are more challenging and their elimination takes more time than before. FICO- RA is developing a cooperation procedure with the users of emergency and security traffic frequencies and parties that offer executive assistance to FICORA. Effortless cooperation is of utmost importance in cases where executive assistance is needed to eliminate a disturbance. Such cases include requests for executive assistance to locate a disturbance in a system influencing aircraft and their crews, for instance. (Figure 26) FIGURE 26: Radio interference volume in The number of radio interference cases in mobile networks studied by FICORA continued to decrease, as it did in Cooperation between FICORA and mobile operators to improve the operators capacity to process their own interference has paid off: mobile operators were already able to clear some of the interference on their own. The fact that more people use unauthorised mobile network repeaters caused some cases of radio interference already in In 2013, FICORA implemented an operations model that involves submitting an investigation request to the police whenever an unauthorised mobile network repeater is found. Many of the interference cases were caused by incorrectly installed repeaters. Interference caused by Short Range Devices (SRD) to other SRDs have also become more common in the past twelve months, probably because more and more people use different kinds of wireless weather stations and other wireless devices, for example. There were around as many interference cases in authority networks as in Some of the customers contacting FICORA in 2013 also mentioned the new type of interference. Many of the reports involving radio interference were about interference caused by mobile network repeaters. In 2013, several unauthorised repeaters were located and decommissioned based on such customer reports. More reports about problems with the remote locking systems of vehicles were submitted than before. In an attempt to reduce the number of disturbances in television broadcasts, FICORA has actively communicated information about how to set up a proper TV antenna system. Furthermore, FICORA prepared its first regulation on the minimum requirements for TV antenna systems. 35

36 FIGURE 27: Radio interference cases processed by FICORA in Objects of interference Causes of interference Antenna TV 30 2 Mobile radio systems 27 7 Private radio networks FM radios 13 3 Short range devices 13 5 Amateur radio devices 11 4 Aviation radio devices 7 2 Maritime radio systems 2 2 Satellite services 1 - Unauthorised use of radio devices - 4 Devices other than radio devices (such as electrical appliances) - 32 Disruption disappeared on its own or source unknown - 51 Total FICORA studied the compliance of 5 GHz wireless local area network (WLAN) devices on the market with regulations. FICORA studied, in particular, whether such WLAN devices complied with the requirement on avoiding frequency ranges of weather radars. This requirement aims at protecting weather radars from interference caused by WLAN devices using the same frequency range. FICORA verifies, by means of inspections and measurements, that all radio and telecommunications terminal devices comply with the requirements, and quickly addresses any problems. Technical compliance of devices was good, as in the previous years, and hardly any products had to be withdrawn from the market because of severe technical defects. In 2013, FICORA and other European market regulators studied the compliance of 5 GHz wireless local area network (WLAN) devices on the market with regulations. They studied, in particular, whether such WLAN devices complied with the requirement on avoiding frequency ranges of weather radars to avoid interference. Disturbances caused by 4 GHz WLAN devices to weather radars have been reported in several European countries. 36

37 6 INFORMATION SECURITY In 2013, national information security was tested particularly by two important series of data systems break-ins. Furthermore, global data surveillance incidents raised plenty of concerns regarding the protection of electronic communications. The events in 2013 indicate the fact that careful preparations for minimising the adverse impacts of targeted network attacks are important also in Finland. 37

38 6.1 General information security level The information security of Finnish telecommunications networks is good in general. This is confirmed by Finland being among the top countries in statistics from several sources. This good level of information security is the result of a continuous striving to prevent malware in cooperation with telecoms operators. For example, in 2013 the Finnish telecoms operators processed a total of 677,146 information security incidents, of which 15,908 gave rise to further actions. By implementing measures, such as contacting the customer or disconnecting the subscription, the telecoms operators strive to limit the impact of malware and prevent malware from spreading to other systems. The continuous prevention measures have kept Finland as one of the best information security countries in the world in terms of the number of malware infections. The number of malware infections is not, however, a direct representation of the level of information security in a country; it is only an indication. A single targeted attack against a critical organisation may be more dangerous than several malicious programs combined. This is why the number of malware observations by private information security companies does not provide an accurate view of the overall threat to Finland. For example, a spyware detected in the Ministry for Foreign Affairs of Finland in 2013 and other similar spyware are not included in the general malware statistics at all. Finland is in an excellent position to become the best information security country in the world, but we still have plenty of work ahead of us. The ability of critical organisations to defend themselves against targeted attacks must be improved, in particular. Furthermore, the daily prevention of malware and the cooperation with telecoms operators must be continued in order to allow Finns to continue using data networks without having to worry about malware. 6.2 National Cyber Security Centre At the turn of the year, FICORA s information security services were combined with CERT and NCSA duties to create a new National Cyber Security Centre Finland (NCSC-FI). CERT duties refer to actions aimed at preventing, identifying and resolving information security incidents. The duties also include communication about important information security threats. NCSA duties refer to carrying the responsibility for the security of electronic transfer and processing of classified materials. NCSC-FI creates and maintains information security situational picture in cooperation with public and private parties. The situational picture can be used to assess the impact of known risks on one s activities in order to make the necessary provisions. In addition to information security issues, NCSC-FI provides information about communications network disruptions. In January, FICORA and the Ministry of Finance signed an agreement that secures the continuity of the GovCERT services or information security services provided for governmental organisations in The provision of these services started in the summer of FICORA provides GovCERT and GovHAVARO services to the Ministry of Finance. The GovCERT services support measures aiming at the prevention, detection and resolution of information security incidents targeted at the data and communications systems of governmental organisations. GovHAVARO is FICORA s technical information security incident detection and warning service. 6.3 Information security threats In the course of the year, FICORA s CERT-FI received 38 information security notifications regarding major information security incidents. These notifications are made based on FICORA s regulation on the obligation to notify of violations of information security in public telecommunications. In January 2014, NCSC-FI implemented a survey on information security deviations experienced by telecoms operators in parties replied to the survey. 29 of them announced that they experienced information security incidents to be reported during said period of 38

39 time. The survey results show that Finnish telecoms operators experienced a total of 677,146 information security incidents in The most common information security incident was one caused by a system infected by malware. 78% of all the information security deviations were such cases. Spam caused 10% and unauthorised use or data system break-ins caused 7% of the detected information security deviations. (Figure 28) FIGURE 28: Share of information security deviations that caused information security incidents (as percentages). 78% 10% 7% 3% 1% 1% Malware detection in the system behind the subscription Spam Unauthorised use/data break-in Other information security problems System involved in a DoS Command-and-control server in a botnet network 15,908 of all detected information security incidents gave rise to actions. The most typical actions were contacting the customer or disconnecting the subscription or service. The reports were deemed unnecessary (i.e. no actions were necessary) in around 5,000 of the cases. The difference between the number of observed information security deviations (677,146) and the number of deviations requiring action was caused by the large number of duplicate observations. The same information security deviation, such as malware having infected one computer, may cause several overlapping observations at different monitoring points. Furthermore, the Internet subscriptions of households often use a dynamic IP address and when the IP address changes, the same malware infection may be reported several times. This is why the number of information security deviations detected is clearly higher than the number of actions caused by information security deviations. (Figure 29) FIGURE 29: Reactions to information security incidents in 2013 Contacting the customer Unnecessary report, no measures required Disconnecting the subscription or service Filtering traffic Transferred to another player

40 6.3.1 Denial-of-service attacks and targeted malware The volume of denial-of-service (DoS) attacks increased in 2013, and they became the most common form of cybercrime. As before, the motive behind the attacks seems to be vandalism or a protest against something. The traffic volumes of the largest detected DoS attacks were hundreds of gigabytes per second, and the highest volumes measured in attacks towards Finnish parties were dozens of gigabytes per second. The Katsomo online service of Finnish TV channel MTV3 was attacked in early autumn. The attacks made it difficult for users to log into the service and use it. There were moments when the pay-per-view service could not be used at all. FICORA s website was attacked at the same time. Based on messages published online, there is reason to assume that both attacks were made by the same party. The theory of the same party is also supported by the fact that the online traffic during both attacks was similar. There were also some other minor DoS attacks towards other Finnish online services. The threat of malware meant to spy on governmental organisations became a reality in 2013 in Finland when the Ministry for Foreign Affairs of Finland announced that its networks had been attacked. Reports published by global information security companies, such as Red October, Miniduke and NetTraveler, also validate the idea that targeted malware is a normal way of spying on organisations. It is not possible to protect oneself completely from targeted attacks, but the adverse impacts can be effectively prevented or minimised if the potential threat is identified and preparations for an attack are made. The HAVARO system maintained by FICO- RA s NCSC-FI is one means of improving the technical detection system of information security incidents towards organisations Information security threats in automation systems According to a report published by Aalto University, almost 3,000 unprotected automation systems or devic- 6) es that are connected to the internet were found in Finland. The systems included webcams and property and industrial automation systems, for instance. The automation systems in Finnish IP addresses were detected with Shodan, a search engine that scans the internet for automation devices and creates a list of them. The first Shodan-assisted study took place at Aalto University in January 2013 and the same study was repeated in November Around the same number of unprotected 7) Finnish devices were detected in both studies. NCSC-FI takes seriously any reports about a system that might be unintentionally open on the Internet. NC- SC-FI notified the owners of the systems detected by the researchers and the parties maintaining the systems of the problem via telecoms operators after receiving the study results. NCSC-FI will also inform the owners of any other vulnerable systems detected in the future Data system break-ins and detected malware Several data system break-ins involving Finland were detected in As a result of these cases, the information security of hundreds of thousands of Finns and millions of users in other countries was jeopardised. Furthermore, they caused a huge amount of extra work for the parties maintaining the targeted online services. A data system break-in may be much more extensive than suggested by a single incident: its impacts will cross state borders and data obtained during a break-in may be utilised years after the incident. The most important incidents were a data system break-in targeted towards the user accounts of a service maintained by Itella and several series of data system break-ins revealed in the autumn. Unauthorised use of the online service by Itella was observed. The unauthorised use was implemented by utilising passwords and user names obtained in data system breakins to another service years ago. The passwords and user names had been spread on the internet. The series of data system break-ins involved breaking into the servers of the online services of several small companies, corporations and large organisations using automated methods. There were two such series of data system break-ins, and both utilised known software vulnerabilities. The user data of hundreds of thousands of Finnish and millions of users in other countries was stolen in these break-ins. The data also included some sensitive information, such as credit card numbers. Furthermore, more than a thousand servers were hijacked in the lat- 6) Aalto University, Suomen automaatioverkkojen haavoittuvuus Raportti Internetissä julkisesti esillä olevista automaatiolaitteista, published on 21 March ) Helsingin Sanomat, Valtava määrä automaatiojärjestelmiä yhä suojaamattomina, published on 20 December

41 ter break-in to create a botnet. The final impacts of these data system break-ins may not be revealed until years from now if the data obtained during the break-ins remains available for malicious purposes. One must also take into account the fact that the division into Finnish services and services abroad is partially artificial because the online world is global in nature. People use services located in several countries with the same user names, passwords and software. The year 2013 was highly similar to 2012 in terms of vulnerabilities affecting large numbers of people. Vulnerabilities in popular client software were regularly patched. Seven vulnerability reports regarding Java were published in both 2012 and The number of vulnerability reports regarding Adobe Flash and Reader even increased from Several reports on browser vulnerabilities were also published, as in the previous years. Severe client software vulnerabilities often lead to a situation where the vulnerabilities are widely exploited by means of exploit kits. Particularly often exploited software include Java and several versions of Internet Explorer. Vulnerabilities are only one means of spreading malware to terminal devices. Users are also often tricked into installing malware via links in s or in social media Information security of household network devices and smartphones Several vulnerabilities in wireless base stations meant for home use and DSL/cable modems used to connect to the internet have been discussed in the media at the end of It is likely that attacks towards the vulnerabilities in network devices used by households will become more common in the future. For example, a worm and a botnet utilising such appliances were detected in late 2013 and early Modern smartphones are mobile devices similar to computers that have a powerful processor, plenty of memory, a large display and an operating system specifically designed for smartphones. Smartphones are not used only to make and receive calls and to send and receive text messages and multimedia messages, but they are also means of sending and receiving s, updating your personal calendar, browsing the web, taking photos/videos, navigating, gaming and using a variety of useful or fun apps. Smartphones are networked devices that are practically always connected to the internet via several interfaces (3G, 4G or WLAN). The apps installed on the phones also use these interfaces. Since smartphones have become computer-like devices, their operating system and apps need to be updated more often. In addition to the owner s name and contact information, a smartphone contains detailed information about the smartphone itself and its location. Apps and games use the phone s properties and the information in the phone to find the optimal features to use. Some apps may also send data to third parties mainly advertisers. At present, the most popular smartphone operating systems are Google s Android and Apple s ios. Other, less popular operating systems include Windows Phone, BlackBerry, Bada and Symbian. International IT sector research company Gartner states in a study that 82% of all the smartphones in the world use the Android OS. This may be why most of the mobile malware out there targets Android devices. According to a study by Cisco, 99% of all mobile malware is designed for Android devices Ransomware Ransomware is still a topical phenomenon. It is one of the most common types of malware in Finland and abroad. Such malware or websites that aim at causing a local denial-of-service in the user s computer to force the user to pay a ransom to restore the computer s performance are classified as ransomware. A new version of CryptoLocker is being developed, which means that it is probably only a matter of time until it is detected in Finland. The police receive around a dozen reports of ransomware per month, while FICORA received a hundred contacts regarding ransomware in According to statistics gathered by F-Secure, cases of Browlock are usually detected on a daily base, but the number of cases may temporarily increase to a thousand per day when there is an active malware campaign. Another fact worth mentioning is that the Revetontype malware that are familiar from the past are still almost as active as Browlock. According to data submitted by F-Secure to FICORA, Reveton infections were detected in Finland each day during a period of several months in late 2012 and early

42 7 POSTAL SERVICES Electronic communications and online shopping continued to gain more popularity in 2013, and this increased popularity had a stronger impact on the total number of postal items sent by post than before. The number of postal items sent by post continued to increase despite the general economic downswing, while the number of addressed letters continued to decrease. 42