Finnet Group Believes in the Power of Locality

Telecom&Mobility articles

Helsinki, 26 May, 2005 — Finnet Group Believes in the Power of Locality

Once upon a time in Finland, around the year 1935… there were 815 privately owned local telephone companies in just about every village all over the country. At that time most other European telecoms were state-controlled. In Finland the state-owned telephone companies co-existed with privately owned local telephone companies. It is fascinating to realize that some traces of this unique historical background of Finland’s telecommunications setup can still be seen in today’s market.

Finnet Group is a descendant of these traditionally privately owned local telephone companies. Therefore, it is a natural strategy for Finnet to concentrate on local business rather than to start to compete with the giants of the industry. Finnet’s market share from Finland’s telecommunications services total market is about 20 per cent.

Modern Technology Combined with Quality Service

Seppo Toivonen, Managing Director of the Finnet Association, is well aware of the recent development and the challenges of media convergence, for example. Acquisitions and mergers have created a completely new type of industry structure in the past couple of years. In addition, globalization and demographic developments raise the stakes and toughen the surviving players. Small local players have been warned about all different kinds of threats. However, according to Toivonen, there is another point of view to be taken into consideration.

“As far as I am concerned, the customers will always be reached locally. No matter how much there is talk about globalization and multinational mega-mergers there will always be a need for local and more specialized customer relationships. Most of our customers appreciate the fact that there is a local operator in their area. People like the idea about their own local telephone company. In fact, it is the very foundation of Finnet to operate in this way. Small scale local telecommunication firms can offer their customers the kind of high-quality services that some larger corporations are unable to deliver”, says Seppo Toivonen.

Local Sensitivity as Strength

As the forces of globalization create ever larger corporate entities on the one hand, the forces of segmentation require more and more customization on the other. “Local sensitivity is our main weapon against our competitors. Finnet operates also nationally but our focus will be on the first class customer service at the local level. All Finnet’s local telephone companies enjoy trust in their local area. Our clients are familiar with their local telephone operators in the surrounding areas, and people seem to understand that they actually support their own local well-being by investing their money to local players instead of others”, says Toivonen.

“What will be the role of a telephone company in the year 2010? It is definitely easier to ask than to answer. We cannot foresee the future but there are some principles that we must keep in our minds. As a relatively small player, we must rely on our strengths. We have been doing this business for over 100 years. Finnet has very strong operator know-how. Our infrastructure and penetration rates are extremely good. We have a lot of potential, and now we must keep on believing in our strategy. Co-operation and positive attitude are two key factors that will lead us for the right path”, concludes Seppo Toivonen.

The article is published in ICT Cluster Finland Review 2005.

More information
ICT Cluster Finland Review 2005