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Iceland: Transport and communications(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY BACKGROUND FROM THE ECONOMIST INTELLIGENCE UNIT Roads On January 1st 2005 the road network totalled 13,028 km, of which 4,265 km were classed as national main roads. Less than one-third of the country's total road network is paved, with the remainder mostly dirt or gravel tracks. At end-2004 there were 598 passenger cars per 1,000 inhabitants, which is a high level of car ownership by international standards (the average in western Europe in 2004 was 509 passenger cars per 1,000 inhabitants). Efforts to restrain public spending in recent years have meant that most infrastructure projects have been put on hold. The last decade has seen some major projects undertaken, however, including a 9-km tunnel to link towns in the Westfjord fishing region and a 6-km tunnel under Hvalfjord bay joining Reykjavik to the town of Akranes. There are no railways. In 2002 a working party delivered recommendations for a major overhaul of Iceland's transport system, in response to the increasing pressure placed on the country's transport infrastructure by the steady rise in population and traffic in the capital region, and by the rapid growth in tourism. A long-term plan for road transport aimed to provide all parts of Iceland with an adequate, modern road infrastructure by 2010. A new transport plan currently in discussion for 2007-18 reiterates this intention, and also plans for public transport to reach all towns and villages of more than 200 inhabitants, and for travelling time to and from Reykjavik from any such destination to be no more than three hours. In April 2003 the world's first commercial hydrogen refuelling station for cars and buses opened in Reykjavikthe first step in what the government hopes will be the wholesale switch of Iceland's transport system to hydrogen fuel. Air transport The principal airline is a private carrier, Icelandair, which originated from the merger of Loftleidir and Flugfelag in 1973. It operates international services to 22destinations in ten countries in Europe and North America and has a number of flight agreements with foreign airlines. Icelandair has carved out a market by focusing on US destinations, where there is little competition from other non-stop flights. In 2005 Icelandair carried over 1.5m passengers. Revenue generated from its operations makes it Iceland's largest single exporter outside the fisheries sector. In February 2006 FL Group, the investment company that owns Icelandair, announced plans to list the airline on the Iceland Stock Exchange. In April the company sold the 16.9% stake it had acquired in Easyjet, one of Europe's largest budget airlines. Also operating from Iceland is Air Atlanta, which mainly operates as a charter airline on international routes outside the country. In early 2003 a new budget airline, Iceland Express, began operating daily scheduled flights between Iceland, Denmark and the UK. The airline, owned by an investment company, Fons, has proved to be extremely popular and has had the effect of forcing down average fares on Icelandair's previous monopoly routes. In March 2005 Iceland Express acquired Sterling Airlines, the largest budget carrier in Scandinavia, although Sterling was then acquired by the FL Group in early 2006. Fons has since stated it may sell Iceland Express, although no decision had been taken as of July 2006. The domestic market is dominated by Air Iceland (Flugfelag Islands)also operating services to Greenland and the Faroe Islandsand Islandsflug. Keflavik airport, close to Reykjavik, is the largest of the four main airports in Iceland. It handles most international passengers and air freight and has been expanded recently to meet the rapid growth in passenger traffic. Shipping Total registered sea vessels numbered 1,135 (232,834 gross register tonnage) at the start of 2005, of which 869 were fishing vessels. More than 99% of all imports and exports of goods to and from Iceland are moved by maritime transport. The two main shipping companies, Eimskip and Samskip, operate regular routes to major ports in Europe and the US. There are 57 ports in Iceland for ocean-going vessels, with the largest in the capital. The port in Reykjavik is the fourth-largest container harbour in the Nordic area, receiving more than 70% of all imports toIceland. A new harbour is planned for the south coast at Bakkafjoru. Telecommunications As a remote island Iceland has had much to gain from rapid developments in the telecommunications and information technology (IT) sectors, and expansion of information infrastructure has been regarded as a priority by the government. The telecoms sector has developed rapidly since it was liberalised in the late 1990s, leading to increased competition, especially in the field of mobile services. The dominant company in the telecoms market is Iceland Telecom (Siminn), which was privatised in July 2005. Iceland Telecom holds a share of around 80% of the fixed-line market and about 65% of the mobile market. Two private firms, Tal and Islandssimi, merged in 2003 to form Og Vodafone, which has been fairly successful in breaking Iceland Telecom's stronghold on the mobile-phone market. The country's telecoms infrastructure is extensive, modern and fully digitised, with satellite-earth stations, fibre-optic cables and an extensive broadband network. At end-2005 around 98% of the Icelandic population aged 16-75 were registered as mobile-phone users, one of the highest mobile penetration rates in the world. The use of computers and the Internet is widespread in Iceland. In 2005 a total of 89% of Icelandic households owned a computer and 84% had access to the Internet (compared with an average in the EU of 48% of households). The share of households with a high-speed (xDSL) Internet connection, has increased from 26% in 2002 to 85% in the first half of 2006. Media The country's main daily newspapers are Morgunbladid, Frettabladid, and DV. Frettabladid and Morgunbladid are published daily, while DV is published six times a week. Morgunbladid relies mainly on subscriptions. Frettabladid, its main competitor, has recently eclipsed the venerable Morgunbladid in terms of readership. It is distributed free of charge to households in the capital and surroundings, as well as in most other major population centres. The Icelandic National Broadcasting Service (RUV) is an independent public-service broadcaster, operating one television channel and two radio stations. Icelands largest private-sector media corporation, 365 (formerly Nordurljos), is owned by Dagsbrun, a large Icelandic telecoms and media group. The company is split into a newspaper arm (Frettabladid and DV) and a broadcasting arm. In total, eight radio channels and seven television channels are broadcast in Iceland. A large number of foreign television channels are widely available via satellite and cable. In April 2005 a government-appointed committee published proposals for a new media ownership bill, aimed at restricting monopolistic behaviour in the country's print and broadcasting media, which has undergone a period of significant consolidation in recent years. The proposals aimed to restrict the proportion of a major media outlet owned by an individual or company, force more transparency of ownership, and set up a media institute to monitor ownership rules. The bill was finally presented before parliament in April 2006, but is unlikely to be passed this parliamentary session. SOURCE: Country Profile Copyright 2006 Economist Intelligence Unit |