Reykjavik: Fiber to Every Home

By Hjalmar Gislason

February 23, 2004

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A project is underway to make Reykjavik, the capital of Iceland, the first city in the world where every home is wired for broadband. Even though some areas with larger population numbers than Reykjavik—notably areas in Japan and South Korea—are already fiber connected, but these projects have carefully selected high-income areas or targeted their implementation to new construction areas. The Reykjavik project will cover the entire city, and also includes plans for an advanced network of services.

This Reykjavik fiber story starts in 1999, when Reykjavik Energy, the local city-owned utility company, implemented an advanced core fiber network. The core network connects 450 substations of the city's electrical distribution. The average distance from a household in Reykjavik to one of these substations is 200 meters, and even the far-flung households are usually less than 400 meters away. On top of this distribution network, Reykjavik Energy offered fiber connections to businesses and planned to offer residential connections over power lines. This plan allowed them to build a distribution layer ready for Fiber-to-the-Home (FTTH) when it became viable, yet capitalizing on the distribution network right away. Already offering cold water, hot water (Reykjavik homes are heated with geothermal water) and electricity, Reykjavik Energy saw the data connection as the "fourth element" in their offering.

Reykjavik Energy immediately became a major player in connecting businesses with fiber connections, in competition with Iceland Telecom's less sophisticated but more diversified network. The power line connections, on the other hand, ran into technological issues and lost the race for residential connections to ADSL lines. Those are currently offered by the country's two telecom operators: Iceland Telecom and Og Vodafone. Today a majority of businesses in the Reykjavik area are connected with fiber, and over 15 percent of all households in the Reykjavik area have an ADSL connection with 256 kbps or more.

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