From the Iberian Peninsula to the Baltic States and from Ireland to Hungary: Telia International Carrier (TIC) is expanding its "Viking Network" across Europe. Supported by a EUR 190 million loan of the European Investment Bank (EIB), the EIB-financed project will be for capital investment to provide international backbone telecommunications capacity based on Internet Protocol technology.
The EIB-financed project is aimed at expanding TIC's existing fibre-optic network within the European Union and into several Accession Countries to build a comprehensive Pan-European telecommunications infrastructure with links to other parts of the world. TIC provides this infrastructure and related services exclusively on a wholesale basis, with its principal customers being other telecom companies, internet services providers and large corporations. Telia's "Viking Network" is to a large extent located outside Telia's Swedish home market, enhancing competition in these markets.
The EIB loan will finance investments in eleven EU countries and six Accession Countries (Hungary, Czech Republic, Poland, Latvia, Lithuania and Estonia). With the EIB support for this project not only the objectives for its Innovation 2000 Initiative ("i2i") and the Accessions Countries are reached, but it is also consistent with the European Commission's eEurope Action Plan for a cheaper, faster and secure Internet. All in all, the project will make denser links between Northern and Southern countries of the EU with state-of-the-art technology. It will also facilitate broadband communications between Accession Countries and the EU, and between Accession Countries and the US. In this way, it contributes to the economic development of Accession countries, and facilitates their economic integration with the EU.
The growing demand for international long distance telecommunications currently faces unequal supply. North Western Europe is well served and well connected to the rest of the world with over-capacity. Central, Eastern and Southern Europe are still not adequately connected to Western Europe and the US. In general, the "carrier's carrier" market is highly competitive within Northern and Western Europe, and less competitive in Southern, Central, and Eastern Europe. Major capacity providers are still the incumbent operators who are now challenged by other participants such as pure new-comers or national operators whose international strategy goes through the deployment of their own network.
Commenting on this loan, EIB Vice President Mr Nowotny, who signed the transaction on behalf of the EIB, said: "EIB's long term financing to this top quality telecommunication service will help to spur Internet diffusion to make Central and Eastern Europe a more knowledge and information based economy".
The proposed project is part of a larger investment programme of TIC which started in 1998. In excess of 95% of the total cost is incurred outside Sweden, in countries where TIC is a new entrant in the market.
The AAA-rated European Investment Bank (EIB), the financial arm of the European Union, contributes by means of its long-term loans towards the integration and balanced development of its Member States as well as in countries outside the Union.In response to the guidelines mapped out by the Heads of State or Government in Lisbon on 23 and 24 March 2000 with a view to building a European knowledge-based, innovation-driven economy, the EIB Group started its "Innovation 2000 Initiative", a dedicated EUR 12 to 15 billion programme of medium and long-term loans.
Rather than increasing the volume of lending, the "Innovation 2000 Initiative" will mark a qualitative shift of emphasis in the activities of the EIB Group towards cutting-edge, high-tech value added sectors.
"i2i" focuses on five objectives:
- the development of SMEs and entrepreneurship, in particular by expanding venture capital activities encouraging the development of innovative SMEs within the Union. Such operations are the province of the European Investment Fund (EIF), the EIB Group's specialist venture capital arm;
- the dissemination of innovation, by financing projects of all sizes, undertaken by both public authorities and private enterprise, with the aim of propagating and deploying innovation and building up the skills needed to apply the new technologies;
- research and development, by supporting public or private research programmes, especially those bringing together private enterprise and public bodies, promotion of research infrastructure, Centres of Excellence and structures facilitating SMEs' access to research programmes;
- information and communications technology networks, by financing trans-European multimedia and broadband networks, as well as physical or virtual infrastructure providing local access to those networks, notably in the less developed regions of the Union;
- human capital formation, by modernising and increasing computerisation in schools, colleges and universities and through loans for IT training centres.