Elisa Oyj: From Finland's First Telephone to the World's First 5G Call

How a 143-Year-Old Helsinki Cooperative Became a Nordic Telecom Giant and International Software Player

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I. The Improbable Journey: From Cooperative Telephone Wires to Global Software Ambitions

Picture Helsinki in the winter of 1882. Finland was a Grand Duchy under Russian rule, the telephone was barely six years old as a commercial technology, and a 31-year-old electrical engineer named Daniel Johannes Wadén was about to create something that would still be operating 143 years later.

Elisa was originally established on 31 January 1882 by the electrical engineer Daniel Wadén as a telephone cooperative called the Helsinki Telephone Association (Finnish: Helsingin puhelinyhdistys, HPY). Wadén received his telephone license in 1882 and began building Helsinki's first telephone exchange. He founded the Helsinki Telephone Association, which is the predecessor of Elisa Oyj.

Today, in Finland, Elisa is the market leader in telecommunications, and internationally, it offers digital software services. Elisa employs over 6,100 professionals in over 20 countries, and revenue in 2024 was EUR 2.2 billion.

This is the story of how a telephone cooperative born in the age of the Russian Tsar became the company that made both the world's first commercial GSM call and claimed the world's first commercial 5G network—and is now quietly transforming itself into an international software powerhouse while maintaining domestic market leadership.

Elisa is a telecommunications, ICT and digital services company and its home markets are Finland and Estonia. Internationally Elisa offers digital software services in over 100 countries. Largest shareholders are Finnish national institutions (Solidium Oy, Ilmarinen and Varma).

The themes that run through Elisa's story—independence from state control, technological pioneering, disciplined capital allocation, and strategic evolution—offer a fascinating case study in how a regional incumbent can remain relevant across multiple technological revolutions. Most European telecom incumbents emerged from state postal services. Elisa emerged from something quite different: a private cooperative that competed against the state from day one.

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II. Origins: The Cooperative Era (1882-1980s)

In the late 19th century, most European countries followed a simple pattern for telecommunications: the state controlled everything. Telephone service was typically a government monopoly, administered by postal authorities who viewed telephony as a natural extension of their letter-carrying duties. Finland took a dramatically different path—one that would shape Elisa's DNA for over a century.

Daniel Johannes Wadén (27 July 1850 – 25 August 1930) was a Finnish electrical engineering expert with a degree in philosophy. He has been called the father of Finnish telephone operations. He was a capable and energetic telephone technology expert whose work led to the spread of the telephone and electric lighting in Finland.

Wadén was no mere bureaucrat. In 1876, Wadén founded a workshop in Helsinki where he manufactured bells, telegraph components, and other weak-current technology components. At his initiative, Helsinki's first telephone network was built in 1882 and Helsinki's first electric lighting central station in 1884. Wadén manufactured telephones as early as January 1878 and production continued until the 1890s. He produced, according to his own records, 2,503 telephones.

The scale of early adoption was remarkable. The Helsinki Telephone Association began serving customers on 6 June 1882 by connecting 56 phone numbers; by 1884 the number of yearly calls surpassed one million. For context, Finland's entire population at the time was roughly two million people—this was explosive growth for a nascent technology.

What made Finland unique was the proliferation of private telephone cooperatives. While the state did eventually establish its own telecommunications services, private operators maintained a significant presence. HPY started expanding during the 1920s and 30s by merging with smaller cooperative telephone operators. In 1921, HPY and the over 400 other privately operated telephone cooperatives then existing in Finland formed the Puhelinlaitosten liitto ("Federation of Telephone Companies") consortium, which was renamed as Finnet in 1996.

Think about that number: 400 private telephone cooperatives in a country with a population under 4 million people. This fragmented, entrepreneurial approach to telecommunications was distinctly Nordic and distinctly Finnish. It meant that when mobile technology arrived decades later, there would be private operators ready to challenge state monopolies—with HPY leading the charge.

The company reached its current geographical operating field in 1958.

The cooperative structure created a culture of innovation and independence that would prove crucial when the mobile revolution arrived. Unlike state monopolies focused on maximizing bureaucratic control, cooperatives were focused on serving their member-owners. This customer-centric orientation would become a competitive advantage.

Radiolinja had its roots in the small and medium-sized telephone companies that had been competing through the years with the Finnish national telecommunications agency. Kurt Nordman was then the CEO of the largest private telephone company, Helsingfors telefonförening (the Helsinki Telephone Association), which had originally been founded by Daniel Johannes Wadén.

By the 1980s, HPY had grown into the largest private telephone company in Finland. But mobile telecommunications—the next great wave—remained the exclusive domain of the Finnish state. This was about to change in dramatic fashion.

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III. Breaking the State Monopoly: The Radiolinja Revolution (1988-1994)

The birth of mobile telecommunications in Finland reads like a political thriller crossed with a technology startup origin story. The incumbent state operator, Tele Finland, held an ironclad monopoly on mobile services through the NMT (Nordic Mobile Telephone) network. The private telephone cooperatives watched in frustration as this lucrative market remained closed to them.

Radiolinja was a Finnish GSM operator founded on September 19, 1988. Nordman recalls: "We wanted to be able to compete in mobile telephony as well but the agency would not allow us into the NMT market. In August 1988, I lost my patience and began to take action." Nordman persuaded banks, insurance companies, wholesalers and others to become stakeholders in Radiolinja and began the battle for an operating license.

Kurt Nordman's strategy was audacious: rather than fight for access to the existing NMT network, he would leapfrog directly to GSM, the emerging European standard for digital cellular networks. This was a high-risk bet on an unproven technology, but it offered a path around the state monopoly.

The company, which became Helsingin Puhelin in 1985, was involved in the establishing of Oy Datatie Ab, the provider of a national data transfer service. The state's mobile phone network monopoly was broken with the help of Radiolinja.

The political battle was fierce. For two years, Finland's major political parties fought over whether to grant Radiolinja an operating license. But on July 1, 1991, everything changed.

The first official GSM call between former Finnish Prime Minister Harri Holkeri and Deputy Mayor of Tampere Kaarina Suonio, on July 1, 1991, lasted just over three minutes. But it took two years of hard work and many sleepless nights to make it happen.

The first successful test call had actually happened months earlier. The first successful test call was achieved at 4 am on March 27, 1991. On March 27, 1991, the world's first GSM phone call was made on Radiolinja's network. The network was opened for commercial use on July 1, 1991.

The network was built by Telenokia and Siemens—now known as Nokia Siemens Networks—for the Finnish operator Radiolinja, now known as Elisa.

What made this moment particularly Finnish was the collaboration between the private operators and Nokia, which was itself transforming from a paper and rubber company into a telecommunications giant. Finland became the testing ground for what would become the global mobile revolution.

There's a delightful honesty in the retrospective accounts of that July 1991 event. "Luckily, it went smoothly, with Mr. Holkeri, calling from a car phone, remarking that the reception was so clear it was like talking to 'someone in the next room.' What the world didn't realize at the time is that one of the official calls we made at that event used the backup analogue system. I guess it's safe to admit this 30 years on."

Even world-changing technology demonstrations sometimes require a backup plan.

The monopoly-breaking didn't stop with mobile. After that, the long-distance network monopoly was also ended, at the beginning of 1994. The Ysi long-distance network founded by HPY took 50% of the long-distance call market, and call rates decreased by more than 50%.

This pattern—private operators using new technology to break state monopolies, followed by dramatic price reductions—would repeat across Europe. But Finland was first, and Elisa (through its predecessor entities) was at the center of the revolution.

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IV. Transformation: From Cooperative to Public Company (1995-2003)

The 1990s presented Elisa's predecessors with a classic strategic dilemma: how do you scale a cooperative structure to compete in an increasingly global telecommunications market?

HPY's original form of incorporation, a mutual association, was changed to a legal cooperative ("Helsingin puhelinosuuskunta") in 1995, listed on the Helsinki Stock Exchange as Helsingin Puhelin Oyj in 1997, and then changed again to a joint-stock company under the name HPY Holding Oyj. HPY was eventually demutualised in 2000, and was renamed as Elisa Communications Oyj.

The transformation happened in stages, reflecting both the complexity of changing a cooperative's ownership structure and the need to bring existing members along. The 1997 stock exchange listing was a critical step—it gave the company access to public capital markets at precisely the moment when massive infrastructure investments were needed to capitalize on the mobile revolution.

In 1997, Helsingin Puhelin Oyj was listed on the Helsinki stock exchange, and in the 1990s Radiolinja, FinnetCom, Tampereen Puhelin, Keski-Suomen Puhelin and Joensuun Puhelin merged with the company.

This consolidation wave was essential. The old cooperative structure had produced over 400 separate entities—far too fragmented to compete effectively in a market requiring continental-scale infrastructure investments. By absorbing key Finnet affiliates, HPY was building the foundation for a truly national operator.

Elisa Communications Oyj left the Finnet consortium in 2001, and would eventually unify all of its offerings under the Elisa branding in 2003–2004.

A powerful sector transition was taking place in 2003: competition became tighter and prices dropped. Operations had to be adjusted to cater to the needs of the customers, the market and the owners.

The departure from Finnet was significant. It signaled that Elisa was no longer content to be first among equals in a cooperative federation—it intended to be a standalone national champion. The brand unification in 2003-2004 was the final step in this transformation: from fragmented cooperatives to a unified, publicly-traded telecommunications company.

The timing was both opportune and challenging. The early 2000s saw the collapse of the telecom bubble, which had inflated valuations across the sector. Companies that had over-leveraged to chase 3G spectrum licenses faced severe financial stress. Elisa, with its more conservative Finnish approach to capital allocation, weathered this storm better than many European peers.

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V. Building Scale: The Saunalahti Acquisition & Brand Unification (2005-2010)

By the mid-2000s, Finland's telecommunications market was maturing, and Elisa faced a strategic question that haunts every premium brand: how do you address price-sensitive customers without cannibalizing your core business?

The answer came through acquisition. Saunalahti (previously Jippii) was a Finnish mobile phone operator and internet service provider. The company had been founded in 1996 when three middle-sized internet operators merged, and it had built a reputation as a scrappy challenger focused on value-conscious consumers.

In 2005, Saunalahti merged with Elisa. Subsequently Elisa acquired all stock and Saunalahti was delisted from the Helsinki Stock Exchange in the first half of 2006.

The strategic logic was elegant: rather than degrading the Elisa brand with discounted offerings, the company maintained Saunalahti as a distinct value-oriented brand. The company's range of services includes fixed and mobile phone subscriptions and broadband connections, sold under both the Elisa and Elisa Saunalahti brands, as well as cable television subscriptions, related services, and digital services such as Elisa Viihde.

This dual-brand strategy allowed Elisa to compete across market segments without the margin erosion that typically accompanies discounting. Price-sensitive customers could choose Saunalahti; customers prioritizing premium service could stay with Elisa. The company captured market share in both segments.

Elisa launched the first commercial GSM service under the Radiolinja brand in 1991 and the world's first commercial UMTS900 network on 8 November 2007.

The UMTS900 milestone continued Elisa's pattern of technological firsts. By using the 900 MHz band for 3G services, Elisa could provide better coverage than competitors using higher frequencies—particularly important in Finland's vast, sparsely populated northern regions.

Elisa Viihde is a Finnish entertainment service produced by Elisa. Elisa Viihde was founded in 2009 as an online recording service. At the beginning Elisa Viihde financed Finnish movies. In 2014, Elisa Viihde started producing also original series, the first one being the sketch comedy Molton Klubi.

The Elisa Viihde launch represented an important strategic evolution—moving beyond connectivity into content. This would become increasingly important as telecommunications companies sought to differentiate themselves in a commoditizing market.

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VI. The Digital Transformation & 5G Leadership (2011-2020)

The 2010s saw Elisa cement its reputation as a technological first-mover across successive mobile generations. The pattern was consistent: whenever a new generation of mobile technology emerged, Elisa positioned itself as one of the first commercial operators globally.

In 2011, Elisa was the first company to open a 4G network for commercial use, and opened commercial 4G/800MHz frequencies in 2014. In 2016, 4G population coverage was already 98% in Finland.

The 5G story exemplified Elisa's approach. On 27 June 2018, Elisa launched the world's first commercial 5G network in the Finnish city of Tampere and in the Estonian capital of Tallinn.

At the same time, Elisa has some strong frontrunner credentials with 5G, as it did launch the world's first commercial 5G network back in 2018 (even if only with a with a grand total of two subscribers.) The Finnish 5G frontrunner is showcasing nine 5G solutions at its showroom in Helsinki, of which it claims three are new – one involves a tractor!

The telco said that the 5G network was launched in the cities of Tampere, Finland and Tallinn, Estonia. Elisa, which operates in Finland and Estonia said that the first person to use the 5G network was Anne Berner, Finland's minister of transport and communications.

This isn't the first time Elisa has staked a big first in wireless. The first GSM telephone call in the world was made using Elisa's network.

The domestic consolidation continued apace. In 2013 Elisa acquired PPO Yhtiöt, Kymen Puhelin and Telekarelia. In 2016 Elisa acquired Anvia's telecom business, IT and hosting businesses as well as parts of TV business. In 2017 Elisa strengthened its position especially in Estonia with ES Starman and Santa Monica Networks acquisitions.

The Content Investment: Elisa Viihde

Elisa is one of the largest producers of Finnish drama with 20 original series published. Hit titles include the internationally distributed, award winning original series Arctic Circle, All the Sins, Shadow Lines and Bullets.

Elisa Viihde Viaplay is a jointly operated streaming service of Elisa and NENT Group, producing about 50 original series and movies yearly (with seven of Finnish origin), kids programmes, and Nordic and international originals from Nent.

With the cultural footprint of nearly €40 million in 2020, Elisa Viihde is one of the most significant supporters of Finnish series and movies. Elisa Viihde is also one of the biggest commissioners and exporters of Finnish drama with +25 original series premiered to date, sold to +50 countries.

This content strategy served multiple purposes: it increased customer stickiness (subscribers less likely to churn if they're watching exclusive Finnish drama), it created a differentiated offering versus pure connectivity providers, and it built cultural capital with Finnish consumers who valued support for local content.

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VII. The Software Pivot: Elisa Industriq (2019-Present)

The most strategically significant development of the past five years has been Elisa's aggressive expansion into international software services. This represents a fundamental evolution of the business model—from a regional telecommunications operator to a global software player.

The foundation was laid in 2019 with the Polystar acquisition. Elisa Polystar, a part of Elisa Group, is a growing international software business that delivers automation, AI, and analytics for CSPs globally. Our vision is to provide CSPs with solutions that enable them to run completely self-driving networks.

The logic was clever: Elisa had built world-class network automation capabilities for its own operations. Why not productize those capabilities and sell them to other operators globally?

"This stems from the company's own network automation capabilities, which it started building in 2011. 'When we are talking about network automation, we are effectively talking about the production automation of a telco, and that same data capability, that same advanced analytics capability, combined with machine learning, can be utilized for production automation of other industries,' Manner said."

Polystar is a vendor-agnostic telecom software expert, embracing the multi-supplier, multi-generation landscape in your networks. Our innovative ML/AI-driven analytics consistently reduce OPEX and CAPEX for 100+ CSPs worldwide.

But the software ambitions extended far beyond telecommunications. It will encompass several acquisitions from previous years, including Elisa Polystar, which offers automated assurance to operators, alongside camLine, sedApta, CalcuQuote and TenForce, with each maintaining its own brand. Elisa Industriq will also newly constitute a separate segment for financial reporting purposes. Manner said that alongside consumer-facing home-related digital services, the company sees B2B opportunities in IT and cybersecurity services, adding that "a very important leg of our growth is international software services."

Polystar was merged with it, resulting in Elisa Polystar. In March 2020, Elisa acquired a majority of US-based CalcuQuote and in 2021 a share of Italian-based sedApta and later during the year majority share of Belgian-based Tenforce.

In April 2022, Elisa acquired Slovak-based FRINX and in August Cardinality Ltd.

Elisa has signed an agreement in which it will acquire the remaining share capital (81 per cent) of sedApta Group from the current owners. Elisa acquired a minority share (19 per cent) of sedApta in 2021. The estimated closing is in October 2024. The acquisition price was EUR 61.8 million.

Elisa Industriq creates software solutions for operational intelligence by multiplying industrial knowledge with AI innovation. Our businesses – camLine, sedApta, Elisa Polystar, CalcuQuote, TenForce, and Elisa Distributed Energy Storage – serve over 2,000 clients globally in the manufacturing, telecommunications, and energy sectors.

Elisa Industriq employs nearly 1,600 experts in Europe, Asia, and North America.

The growth results have been impressive. "Our international digital services business achieved double-digit organic growth for the full year 2024. Supported by acquisitions, the year-on-year growth in the fourth quarter was as high as 77 per cent, of which organic growth accounted for 27 per cent. This demonstrates that we have a high-growth business in our portfolio."

We are now reporting International Software Services as a third financial reporting segment. The business was formerly known as International Digital Services and now operates under the brand name Elisa Industriq.

The strategic rationale is compelling: telecommunications in Finland and Estonia is a mature market with limited organic growth potential. By building an international software business, Elisa creates a second growth engine that can compound for decades. The software margins are typically higher than telecom margins, and the growth potential is not constrained by the size of the Finnish population.

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VIII. Recent Developments & Current State (2022-2025)

Record Performance Despite Challenges

CEO Topi Manner stated: "In the fourth quarter, Elisa continued its good performance, despite the soft macroeconomic environment and geopolitical challenges. Revenue grew by EUR 16 million to EUR 580 million, and comparable EBITDA improved by 3 per cent to EUR 198 million. Also, the year 2024 was strong: revenue increased by 1 per cent to EUR 2.2 billion, despite net business disposals, acquisitions and regulatory changes impacting revenue negatively. Both comparable EBITDA and EBIT were the best ever, at EUR 783 million (756) and EUR 504 million (487), respectively."

We continued expanding our standalone 5G and fiber networks and pioneering technologies to benefit our customers. Our Net Promoter Score, measuring customer satisfaction, rose to a record level of 31.1 (28.1 in 2023).

Infrastructure Innovation: The Virtual Power Plant

In February 2022, Elisa received a EUR 3.9 million grant from the Finnish Ministry of Economic Affairs and Employment to support its investment in a Distributed Energy Storage (DES) solution based on intelligent management of the backup power of mobile base stations. The aim is to build 150 MWh of storage capacity, making it the largest distributed DES project in Europe.

In 2023 we introduced the first Distributed Energy Storage (DES) solution in telecom infrastructure in the world.

Also included in the Elisa Industriq portfolio is Elisa Distributed Energy Storage, which offers AI products for managing distributed energy storage. Having started as a way for Elisa to monetize its own back-up batteries, the solution allows for charging batteries when the price is low and selling power to the utility when demand is high but supply is limited. Now, Elisa also offers this solution to households.

Cybersecurity & Resilience

Elisa was the world's first operator to develop a technical method to identify and block caller ID spoofing. As a result, criminals have no longer been able to use Finnish phone numbers in their scams. In 2023, the Finnish Transport and Communications Agency (Traficom) mandated that a scam call blocking solution based on Elisa's innovation be implemented nationwide in Finland. Since then, a type of scam known as a "technical support scam" coming from abroad has been virtually eliminated in Finland. Elisa alone has blocked nearly 26 million scam calls since 2021.

Elisa's solution was granted a patent in Finland in 2023, and in November 2025, it was also patented in Europe. "Our employees developed the solution themselves, and we deployed it in our network back in 2021."

The submarine cable incident around Christmas 2024 tested Elisa's resilience. Elisa announced that it successfully repaired two submarine cables connecting Finland and Estonia, owned by Elisa, that were damaged on Wednesday evening, December 25, 2024.

"In addition to having a lengthy land border with Russia, the company has seen two of its fiber-optic cables cut in an incident last year. 'We have a very redundant network structure with multiple alternative connections to and from Finland, to and from Estonia,' which meant there was no disruption to customers, Manner said."

New Leadership & Transformation

These remarks come from someone who has spent a large part of his career outside of the telecom industry. Prior to becoming the CEO of Elisa over a year ago, Manner led the airline Finnair for five years and had previously worked at Nordea, a financial services group.

After Q3, Elisa has decided to launch a transformation programme to simplify its operations and to increase productivity in line with the strategy communicated at the Capital Markets Day in March 2025.

Elisa Oyj maintains its full-year revenue and EBITDA guidance, anticipating 5-10% organic growth in International Software Services. The company expects the majority of its €40 million cost savings to materialize by Q1 2026.

Kristian Pullola, M.Sc. (Econ), has been appointed Chief Financial Officer, and a member of Elisa's Corporate Executive Board. Pullola will join Elisa 1 October 2025 and assume the duties of the CFO 1 November 2025. He will report to CEO Topi Manner.

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IX. Playbook: Business & Investing Lessons

The Speed-Based Pricing Model

Manner said Elisa has been growing faster than other European operators thanks to its mobile revenues and tariff structure, which is different from that used by most European players.

All the major mobile operators (Elisa, DNA, and Telia) only sell unlimited data plans in Finland. Instead of limiting data usage, the operators focus on selling data plans with faster maximum speeds.

This approach aligns customer value perception with network investment returns. Rather than competing on price per gigabyte—which becomes a race to zero as data consumption explodes—Finnish operators compete on speed tiers. Customers who want faster service pay more, creating a natural upselling mechanism as network capabilities improve.

Capital Discipline & Dividend Consistency

Capital expenditure is expected to be a maximum of 12 per cent of revenue.

According to Elisa's distribution policy, profit distribution is 80–100 per cent of the previous fiscal year's net profit. In addition, any excess capital can be distributed to shareholders.

Elisa Oyj's annualized dividend payout is 2.35. Elisa Oyj has a 5-year dividend growth rate of +4.90%.

Elisa has been paying a dividend for 21 years and has not lowered the dividend for 15 years (dividend continuity). As a result, the dividend was recently increased 11-times.

The Software Business Model Evolution

Elisa Polystar, one of the many subsidiaries of Elisa Group, is a growing international software business that delivers automation, AI, and analytics for CSPs globally. With a background of being Finland's largest CSP, Elisa Polystar provides CSPs with solutions that enable them to run completely self-driving networks.

Using the core telecom business as a proving ground for software solutions creates credibility with customers. Elisa can demonstrate that its automation software works in a live network serving millions of customers.

ESG Leadership

Elisa is one of the Finnish companies that has applied for the most patents. The patent portfolio includes inventions related to network automation, cybersecurity, voice bots, and virtual power plants. For example, based on Elisa's developed and patented model for blocking scam calls and messages, a nationwide blocking solution was developed in Finland.

As the first telecommunications operator established in Finland, we continue to operate as a fully domestic company, with our headquarters and management in Finland, and we pay our corporate taxes in Finland. Elisa is the 9th largest corporate taxpayer in Finland. By paying over 68% of the industry's corporate taxes, we significantly contribute to the development of society throughout Finland.

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X. Porter's Five Forces & Hamilton's 7 Powers Analysis

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Porter's Five Forces

1. Competitive Rivalry: MODERATE-HIGH

As of 2023, telecommunication operators Elisa and Telia held nearly equal market shares of 37 and 29 percent in Finland. The third nationwide telecommunication operator DNA had a share of 23 percent, while other companies accounted for 11 percent of the telecommunications market.

Elisa has the highest market share, sitting at around 39%. Telia Finland is the second MNO in the market with approximately 31% share, but it has seen its share decline from 34% as DNA adds customers.

The Finnish telecom market is consolidated, with a few players holding the majority of the market share.

This three-player oligopoly structure creates intense but rational competition. None of the operators has sufficient dominance to impose pricing; all must compete on network quality and service. However, the unlimited data pricing model reduces pure price competition.

2. Threat of New Entrants: LOW

Building a national mobile network requires billions in spectrum licenses and infrastructure. SIM penetration hovers well above 130% of the population, leaving scant headroom for net adds.

Finland has never had many MVNOs, and the established operators' network quality advantage creates substantial barriers. Spectrum is controlled by the regulator and allocated infrequently.

3. Bargaining Power of Suppliers: MODERATE

Equipment vendors (Nokia, Ericsson, Huawei, Samsung) have consolidated over the decades, creating some supplier power. However, operators can leverage multiple vendors to maintain negotiating leverage.

4. Bargaining Power of Buyers: MODERATE

Consumer switching costs are relatively low technically, but the unlimited data plans reduce price shopping motivation (you're already paying for more than you use). Corporate customers have higher switching costs due to integration requirements.

5. Threat of Substitutes: LOW-MODERATE

Telia Finland shed 16,000 mobile lines in Q2 2024, even as service revenue rose, underlining the pivot from volume to value. Competition has thus shifted to quality of service differentiation, fixed–mobile convergence bundles, and IoT connections.

OTT services (WhatsApp, etc.) substitute voice/SMS but increase data demand, which benefits operators with unlimited data plans.

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Hamilton's 7 Powers Analysis

1. Scale Economies: STRONG

Network infrastructure has high fixed costs and low marginal costs. Elisa has the highest market share, sitting at around 39%. This scale allows for superior cost absorption across the subscriber base.

2. Network Economies: MODERATE

The content platform (Elisa Viihde) benefits from network effects—more content attracts more subscribers, which funds more content investment. The B2B software business (Polystar) benefits from operator ecosystem effects.

3. Counter-Positioning: STRONG (Historically)

The original Radiolinja vs. state monopoly was classic counter-positioning—the incumbents couldn't respond without cannibalizing their existing NMT business. The speed-based unlimited pricing vs. data-capped European models represents ongoing counter-positioning.

4. Switching Costs: MODERATE

Consumer switching costs are modest, but B2B switching costs for network operations software are substantial due to integration complexity.

5. Branding: MODERATE

Elisa is the only operator in Finland that has been appointed with the Key Flag for its mobile and fixed subscriptions. Also Elisa Viihde service has the Key Flag. Key Flag is a sign of services and products produced in Finland by a Finnish company. Elisa has been selected as the most sustainable brand in the industry five times in a row by the Sustainable Brand Index research.

6. Cornered Resource: WEAK

Spectrum is a cornered resource, but all three Finnish operators have adequate spectrum holdings.

7. Process Power: STRONG

"This stems from the company's own network automation capabilities, which it started building in 2011. 'When we are talking about network automation, we are effectively talking about the production automation of a telco.'"

Elisa's automation capabilities, developed over 15+ years, represent genuine process power that competitors cannot easily replicate.

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XI. Bull vs. Bear: Investment Considerations

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The Bull Case

1. Dominant Position in Attractive Home Market: Finland has the world's highest mobile data usage per capita and a rational competitive structure. Elisa's 39% market share provides scale advantages.

2. Software Business Creates Second Growth Engine: Elisa anticipates 5-10% organic growth in International Software Services. This high-growth, higher-margin business addresses the core telecom growth constraint.

3. Proven Innovation Culture: From the first GSM call to the first commercial 5G network, Elisa has consistently been at the technological frontier. This positions the company well for 6G and beyond.

4. Dividend Reliability: Elisa has been paying a dividend for 21 years and has not lowered the dividend for 15 years.

5. ESG Leadership: Strong sustainability credentials increasingly matter to institutional investors and customers.

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The Bear Case

1. Mature Home Market: Finland's telecom market has limited organic growth potential. Full-year revenue is estimated to be at the same level as or slightly higher than in 2024. Mobile data and digital services are expected to increase revenue.

2. Software Execution Risk: Building a global software business through acquisitions is challenging. Integration risk, cultural differences, and technology platform consolidation all present execution challenges.

3. Geopolitical Exposure: The development in the general economy includes many uncertainties. Growth in the Finnish economy is expected to stall. In particular, there is continuing uncertainty relating to Russia's war in Ukraine and other conflicts. Finland's 1,300km border with Russia creates ongoing security concerns.

4. Competitive Dynamics: DNA's success is commendable, considering that it was a challenger to well-established service providers Telia and Elisa. The service provider has differentiated itself from its peers by focusing on quality network performance and customer experience.

5. High Payout Ratio: Dividend payments have increased over the last 10 years and are not covered by earnings with a payout ratio of 103.06%. With its high payout ratio (103.1%), ELISA's dividend payments are not well covered by earnings.

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Key Myths vs. Reality

Myth	Reality
European telecoms can't grow	Elisa achieved organic growth through speed-based pricing and unlimited data
Network operators can't become software companies	Elisa Industriq demonstrates successful diversification into software
Nordic telecoms are boring utilities	Elisa has been first mover in GSM, 5G, and now network automation software

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XII. What to Watch: Key Performance Indicators

For investors tracking Elisa's ongoing performance, three metrics deserve particular attention:

1. Mobile Service Revenue Growth (%): This captures the core domestic telecom business health. The speed-based pricing model should enable continued growth even as the subscriber base matures. Mobile service revenue increased by 4.1 per cent to EUR 255m.

2. International Software Services (Elisa Industriq) Revenue Growth: International digital services business achieved double-digit organic growth for the full year 2024. Supported by acquisitions, the year-on-year growth in the fourth quarter was as high as 77 per cent, of which organic growth accounted for 27 per cent. The split between organic and acquisition-driven growth matters—sustainable growth requires both.

3. Post-Paid ARPU (Average Revenue Per User): In Finland, mobile post-paid ARPU increased to EUR 23.6 (23.2 in the previous quarter). Rising ARPU validates the premium positioning and speed-tier pricing strategy. This single metric captures pricing power, customer mix shifts, and competitive dynamics.

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XIII. Conclusion: A 143-Year Bet on Nordic Innovation

In 1882, Daniel Wadén began connecting 56 telephone subscribers in Helsinki. Today, his creation serves over 2.8 million customers, employs thousands across more than 20 countries, and delivers software solutions to telecommunications operators on six continents.

The throughline is consistent: a culture of technological pioneering, combined with disciplined capital allocation and a willingness to evolve the business model as opportunities emerge. From telephone cooperatives to GSM networks to 5G leadership to international software services—each transformation built on the capabilities developed in the prior era.

"The challenge in the industry clearly has been that the growth, especially in Europe, has been very, very subdued for the industry at large. So it is very much about finding new ways of growing," Elisa's CEO Topi Manner told Light Reading during an interview at this year's MWC. For Elisa, these new ways of growing seem to be tied mainly to software services, automation and AI.

For long-term investors, Elisa presents a fascinating case: a company that has maintained relevance across 143 years of technological change, now positioning for another transformation. Whether the software pivot succeeds will determine whether the next century looks as impressive as the first.

Elisa has updated its medium-term financial targets by the end of 2027. The targets are: Revenue growth 2024–2027 CAGR >4%, EBITDA growth 2024–2027 CAGR >4%, CAPEX/Sales Maximum 12 per cent, Net Debt/EBITDA 1.5−2x, Equity ratio Above 35 per cent.

The world's first GSM call traveled across Radiolinja's network in 1991. Thirty-three years later, Elisa's network automation software helps operators on six continents manage their own networks. The company that once connected Helsinki's first 56 telephone subscribers now connects the machinery of global telecommunications. That is the kind of reinvention that builds enduring enterprises.