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High-Tech Trendsetters
by Rebecca Roberts
Jan. 22, 2001

Iceland sculpture

Everyone in Iceland has a cell phone. According to the report, Iceland narrowly beats Finland for the highest per capita use of cell phones worldwide -- about 78%. The percentage of Icelanders who use the Internet is also in the high seventies -- compared to just over half the US population. Leading the world in love of gadgets is just one of many interesting characteristics of Iceland, a nation about the size of Ohio with a mere 270 thousand people, about the same as Raleigh, NC. We decided to send technology reporter Rebecca Roberts to Iceland to learn more. Here's the first installment.


Wandering around this flea market in downtown Reykjavik, you're drawn first to the food stalls. Some of the old Icelandic traditions are carefully preserved here, including the questionable culinary treat called "hakarl".

Man: This is shark, special made. You can't get shark like this anywhere but in Iceland.
Roberts: How is it prepared? OH WOW!
Man: You want to taste it?

For the record, you DON'T want to taste it. It's putrefied shark fin. It smells like concentrated ammonia. And it tastes worse. But right next to the hakarl stand in this flea market is a stall selling what's quickly become a modern Icelandic tradition -- novelty covers for Nokia mobile phones. According to Thor Arnason, CEO of Icelandic wireless company TAL, mobile phones are so common here they're no longer simply a way to communicate. They're a fashion accessory.

Arnason: It's like your watch. Some have a watch that's a status symbol, others have practical watches that can take water and shocks. The same is happening with the phones. People even wear different phones with different clothes or different environment.

Icelanders are gadget mad. In addition to dressing up their phones in fancy covers, they download popular songs to use as their ringing tones. Several American imports are in the top ten, including teen idol Britney Spears. Arnason says Iceland's compact size makes it simple to convince the whole population to buy the latest thing.

Arnason: It's easier for us to install new technology here. We have a small network. We can penetrate the market with one ad in the one morning paper, or two ads in the two television channels, in one day.

Mobile phones don't just look different in Iceland -- like in the rest of Europe, the technology is way ahead of the US. Here, instant messaging is old news, while it's barely taken off in the states. The typical mobile phone in Iceland can send email, give you the weather report, and pass on popular jokes. Mobile phones are more tech savvy here because Europe has one standard platform, GSM. In the US, two or three competing platforms are still battling it out in the marketplace, sort of like the beta/VHS wars of the early 1980's. But even for Europe, Iceland is way ahead of the curve. Skuli Mogenson is CEO of, a high-tech start-up housed in an old cheese factory in Reykjavik. is working on the next generation of wireless communication, called GPRS, which will provide a constant connection to the Internet.

Mogenson: And it's going to be fully synchronized with your PC, so whatever you've been working on in the PC, when you leave that, it's going to be seamlessly available to you on the mobile phone. You enter car, so the car will be activated, so the network will now know to activate the in-car experience. And then with speech recognition. You know, this might seem far-fetched, but it's all available today.

And GPRS phones should hit Iceland later this year -- no word yet on when they'll be available in the US. Mogenson says has offices in the US, Canada, and Sweden, but their Icelandic customer base is the company's predictor for their other markets.

Mogenson: I think that's one of the advantages of being here. Iceland is a great test market. And we have to apply it as two years ahead of most other areas, but absolutely, it gives us a very good indication of what's going on.

In addition to high mobile phone penetration, Icelanders have access to very high bandwidth, thanks to a fiber optic system built by a homegrown company, Lina Net. Subscribers to Lina Net have ultra-fast internet connections, digital television, and video on demand, a service that isn't yet available in the US. Lina Net also runs market tests for foreign companies who want a glimpse of the high tech future.

Gudbjorg Sigurdardottir: We seem to be very optimistic here. And we are very positive towards all new technology.

That's Gudbjorg Sigurdardottir, head of Iceland's information society task force, which is implementing the blueprint for Iceland's technology future. In the late 80's, the government slashed taxes on computers, making them available to almost everyone in this highly literate, well-off nation. And they made sure that new technology is available to more traditional industries, like fishing, which still accounts for 60 percent of Iceland's economy.

Sigurdardottir: So that's one of our major uses of the IT, is in the fisheries. And in the bigger boats they have very sophisticated systems which are used to facilitate the fishing mechanism itself, finding the fish, and everything about the communication towards the industry in land, etc.

Sigurdardottir says she's often invited to speak to technology groups in other countries, who want to use Iceland as a model. She tells them about Iceland's education system, which is free at all levels. Iceland is also an island, which relies heavily on internal communication. And Sigurdardottir says a small, homogeneous, highly educated population makes change easy to implement. But in the end, she admits there's still something intangible about Icelanders.

Sigurdardottir: Some of it, it's very hard to explain why. It's not -- what I was telling about, the way we think, and react. Of course, it's something you can't easily change with nations.

Which may make Iceland an anomaly. It's an unusual blend of geography, attitude and economy, mixed with a dash of putrefied shark fin. For the World, I'm Rebecca Roberts.

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