Iceland’s telecommunication system is among the most sophisticated anywhere. It is the world’s first fully digitalised telephone system, with more than 140,000 landlines and more than 33,000 ISDN connections serving a population of 300,000. Fibre optic cables are used for general telephone traffic, mobile phone connections, data links and television signals. Transmission capacity is currently 20 Gb/s using DWDM (Dense Wavelength Division Multiplexing) technology.
Submarine fibre-optic systems
Iceland is located midway between North America and the mainland of Europe. Telecommunication traffic is channelled through submarine fibre-optic cables: Farice 1 and CANTAT 3. Farice runs at 20 Gb/s and has an ultimate transmission capacity of 720 Gb/s. CANTAT 3 has a nominal capacity of 5 Gb/s in each direction, with 2.5 Gb/s to spare.
Farice, in which the government is the majority shareholder, is currently laying a third submarine fibre-optic system. This new system will connect Iceland with Denmark and support the growth of advanced internet services and data networking in Iceland.
Tele-Greenland has also started work on a new cable connecting Iceland with Greenland and Canada, which will involve manufacturing and laying 2,200 km of fibre-optic cable on the seabed. It will be one of the most technologically advanced projects ever undertaken. The ultimate transmission capacity is undecided, but the cable will most likely have 2–4 fibre-optic pairs with 96 waves through each pair giving a total capacity range of 1.9 to 3.8 Tb/s. The system will use the most advanced submarine optical transmission technology. Construction of the system is scheduled to be completed in 2008.
In contrast to many European countries, Iceland is receptive to all companies seeking licence-based agreements. There are already 36 telephone operators with licences in Iceland.