Estonia's first 4G network went live in 2009, rolled out by the country's biggest mobile operator EMT - owned by TeliaSonera, the Swedish telco that launched the world's first commercial 4G network the same year.
For some time after, Estonia's mobile carriers could only use 1800MHz and 2600MHz spectrum for LTE, with operators mainly just deploying their 4G networks in bigger cities and towns. However, last spring it was announced that a tranche of 800MHz spectrum — freed up by Estonia's switch from analogue to digital television — was to be sold off by the country's Technical Surveillance Authority (TSA).
EMT won the first 800MHz licence, sold in a so-called 'beauty contest', last May. The company was obliged to pay a one-off €1m fee to the state and agree to install 199 base stations across Estonia. It also had to make sure its 4G network covered at least 95 percent of the country outside of the cities, as well as giving users download speeds of at least 5Mbps.
The second and the third 800MHz licences were then put up for auction, with a starting price of €1.6m. The second licence was the subject of a hard-fought competition between the country's second and third placed mobile operators, Elisa and Tele2, with the former winning out in August. The final price for the second licence was just over €5m. Late last year, Elisa announced that it too had covered 95 percent of the territory with LTE.
For the third licence there were two bidders: Tele2, which had lost both the 'beauty contest' and first auction to rivals, and Starman, a local telco that wanted to use the spectrum to bolster its ZUUMnet 4G service, which had been piggybacking on Elisa's network. Starman pulled out of the race when the original price €1.6m had more than tripled to €5.1m. "As Elisa Estonia has already got a good 800MHz network and our co-operation [with them] is going really well, we didn't find it reasonable to go further with the auction," a spokesperson for Starman told Estonian daily newspaper Postimees.
Tele2 was proclaimed the winner of the third auction earlier this month, with its CEO Argo Virkebau promising to get to the 95 percent coverage mark for 4G in the first half of the year.
As 4G coverage gets closer and closer to 3G levels and the number of LTE-compatible devices available continues to grow, it seems that a future where a sizeable portion of consumers are using 4G is not too far away.
According to recent statistics from market research agency GfK on October and November device sales in Estonia, one in every five mobile phones bought in the country supports 4G. The same trend can be seen on tablets as well, with the 4G segment rising from 14 percent of all tablets sold in August to 22 percent in October.
It's hard to predict if more competition in the 4G market will actually translate into cheaper 4G packages, however. EMT, the largest telco in Estonia, has traditionally been the most expensive – its dongle or router packages start from €15.95 per month including 30GB of data, with download speeds capped at 15Mbps. For smartphone packages, the least expensive 3G and 4G package costs €16.96 per month including 10GB of data, with a download speed of up to 50Mbps.
EMT's rivals Tele2 and Elisa are both claiming to be the cheapest operator when it comes to 4G. Elisa's cheapest dongle or router package costs €13 per month, which gets users 50GB of data and top download speeds of 8Mbps (average real-world speeds range from 0.5Mbps to 8Mbps, according to the company). For smartphones, the cheapest package is €16 per month, with the download speed capped at 7Mbps and a data allowance of 50GB.
Right now, Tele2 is the only operator currently not offering 4G packages for smartphones, although it's likely to do so in the coming months: the company has confirmed it plans to introduce 4G packages for smartphones when once it's finished rolling out its network, thought to be some time in July. The prices of Tele2's 4G packages start from €10 per month for 10GB of data and an unlimited download speed.
According to a Tele2 spokesperson, 4G user numbers in Estonia are still quite small and it will take some time before investments in fourth-generation networks begin to pay off for the country's operators - meaning drastic changes in 4G pricing for consumers aren't on the horizon.
Elisa board member Andrus Hiiepuu said recently that he expects the 4G client base to increase quicker than the 3G user base grew in 2010 when the operator first came out with third-generation services in Estonia.
Operators meanwhile stand ready for any influx of 4G customers.
"Our 4G network could provide stable and fast connections to all our mobile internet users. It wouldn't be a problem for us if all our 3G clients would decide to upgrade to 4G today," said a company spokesperson.