Latvia: Dynamics of Broadband Markets in Europe

Introduction to the case study. Latvia has a longstanding competence in telecommunications (telecom), producing telephone sets already before the First World War. Moreover, the VEF factory (established in 1932) produced 40% of local and regional telephone exchanges in the Soviet Union in the 1980s. The Riga Technical University was the only educational institution in the Baltic area that trained telecom engineers. Hence, high skilled telecom professionals were available in the labour market in Latvia when independence was restored in 1991. The major problem - as in other Eastern European countries - was underinvestment in the network. Although the telephone density, with about 26 main lines per 100 population, was fairly high by Eastern European standards, the public network was based mainly on analogue technology. The telephone waiting list included more than 140,000 applications, with waiting times up to twenty years. In this chapter we capture the quick catch-up that Latvia was able to realize. In this section the early developments are described, including the emergence of the Internet and the role of mobile communications. Section 15.2 is focused on the regulatory developments and Latvia joining the EU. The development of fixed broadband is discussed in Section 15.3 and mobile broadband in Section 15.4. The realization of the Digital Agenda targets is the topic of discussion in Section 15.5. The quality of broadband service and broadband usage are covered in Section 15.6 and 15.7, respectively. Section 15.8 explores developments expected in the near future. Section 15.9 provides the case analysis and conclusions.