This level of service was established by government giving interest free loans to private companies to build the fiber infrastructure (with one company getting about 70% of it). So you might want to revise your use of the word “always”.
In short; since privatization in the 90s, the spending in R&D went to 1% (median in other countries is 7%). Rising costs, and lagging on implementing DSL in 00s. OECD list it among the most expensive countries to own a landline, and cellphone. Then, lagging in DSL+, and then, lagging in Fibre. Bottom of the OECD list.
This is for a country that in the 50s, 60s, and 70s had an amazing copper infrastructure, and a computer and technology univerisity sector even.
I think all of Iceland's internet getting bought by one company is not a reasonable comparison.
[1] https://en.wikipedia.org/wiki/Internet_in_New_Zealand#Pricin...
Using only that article as a resource (lazy, sorry), it seems that the telco infrastructure improved because of competition. It doesn't really seem to be a private/public issue, but that multiple companies got into the action.
All of Iceland's infrastructure was sold off in one huge chunk, forming a private monopoly. This may become a decent test case for whether government-operation or private-operation makes a difference. (In contrast to the wiki article, which suggests that competition is the thing that matters.) Like the grandparent comment, I expect very little from the private operation of Iceland's telco infrastructure, but I'd love to be surprised.
It used to be quite expensive. This only changed thanks to the ruling[1] that the conduct of charging monopoly price was anti competitive.
[1] https://comcom.govt.nz/case-register/case-register-entries/t...