Internet and e-commerce industry in Estonia

Estonia is one of the Northern Eastland countries that have recently become an EU member. The country, populated by only slightly over 1.3 people, represents one of the least-populous members of the European Union. The country is bordered by the Gulf of Finland to the north, by Latvia to the south, by the Baltic Sea to the west and by the Russian Federation to the east. By today, Estonia has gained recognition for its economic freedom that along with its adaptation of new technologies made the country to become one of the world's fastest growing economies for several years. However, Estonia's economy was second worst hit of all 27 EU members in the 2008–2009 economic crisis, slumping steeply in the first quarter of 2009.

Estonia has a strong ICT sector, partly due to the Tiigrihüpe project undertaken in mid-1990s, and has been recognized as the most "wired" and advanced country in Europe in the terms of e-government of Estonia.

Having one of the most developed telecoms markets in Eastern Europe, Estonia has relatively high Internet penetration. Thus, the amount of Internet users in the country has reached almost 70%, according to internedworldstats.com data. Previously, the volume of people connected to the Web, that was less than 30% in 2000, surged to almost 52% by 2006. Though the penetration is very high, Estonia still has only 0.2% share of European Internet market due to its small size.

  Along with one of the highest internet penetration rates in the world, the country can boast about high level of computerization and digital connection for people that is encouraged and supported by the government. In the year 1965 the first in the USSR school computer Ural-1 was set up in the town of Nõo. In 1996 Estonian president started the 4-year state program "Tiger's Leap" to computerize and internetize all of the country's schools (Russia accomplished the alike task in only in 2007). In 2005, Tallinn, the capital, court sentenced a 22-year citizen to pay 3000 krooni (or €190) for the insult in an Internet forum.

So, high Internet penetration in turn determines relatively high Internet related services, including e-banking and e-government ones.

Mass usage of computing networks first came with FidoNet, a worldwide computer network that is used for communication between bulletin board systems, the first Estonian node of which appeared in 1989. In early 1990s started to be rolled out. Owing to Estonia’s geographical location, it played important role in transporting Internet culture to neighbouring Russia. One of the first backbone links for Russia was built in 1991 by Relcom, Russian computer network, through Estonia to Finland.

ADSL service is not advanced enough, as the incumbent holds a virtual monopoly on the network, in part by delays in enforcing decisions from the regulator. In turn, the cable market is well developed, with the majority of households having access to services. Consequently, the cable ISPs was first to introduce triple play services in the liberalized market, posing a significant challenge to the fixed-line incumbent. The fixed-line incumbent has responded by rolling-out FttH networks and launching broadband TV services.

Country’s largest ISP’s, according to isp.thelist.com, are represented by:

Dialer.net – offers dial-up, DSL, WiMAX connections
Kpnqwest Estonia – delivers dial-up services
Netaway- offers dial-up, DSL connection

The country's most popular search engine is the local Neti.ee.pfu

Skype was written by Estonia-based developers Ahti Heinla, Priit Kasesalu and Jaan Tallinn, who had also originally developed Kazaa.

Country’s Internet code top-level domain (ccTLD) is .ee, introduced in 1992 and is operated by EENet and administered by Endel Lippmaa. Two years registration agreement is relatively expensive - $299, while it costs $35 in UK, $89 in Spain or $139 in Denmark. (http://www.rwgusa.com). There are some restrictions for .ee registration, meantime. Local presence is required for the registration. There is also a limit of one domain name per legal entity, and registrations of additional names to protect trademarks are specifically denied as the domain name has no trademark status. As domains under .ee are meant to be institution's identification on the Internet, like the register code in the commercial register, registration of additional domain in the defense of a trademark or a name form is not possible. Valid registrations are free of charge.

Estonia has a very purposeful and quite developed e-government and e-banking system. Its e-government strategy outlines its goals for an Information Society, and steps to reach that by 2013.

Estonia has prompted the development of the e-state and e-government. Launching the digital ID card system, the government introduced further the first in the world the official possibility to vote online. The first e-voting in a parliamentary election was made available for the 2007 elections.

A military doctrine of an e-military of Estonia was officially introduced in 2007 as the country was under massive cyberattacks. The proposed aim of the e-military is to secure the vital infrastructure and e-infrastructure of Estonia. The main cyber warfare facility is the Computer Emergency Response Team of Estonia (CERT) which was founded in 2006. The organization operates with the security problems that occur in the local networks also with those which are started there.

So, while great attention in Estonia has been given to the quick development of e -governance, adoption of basic online public services is slower than in other European countries. Besides utilization by enterprises of advanced public services, like e-banking, claims to be among Europe’s best.