Notes on the future of Irish Telecoms September 5, 2006
Posted by firsttuesday in Telecoms.trackback
Last night’s First Tuesday event was entitled ‘The Future of the Irish Telecoms’. A subject which was always going to be interesting given the recent takeover of eircom by Babcock & Brown and the latest score card from the European Competitive Telecommunications Association (ECTA) which showed that Ireland was still lagging behind in the Irish broadband charts, currently ranking in 14th place out of 15 European countries.
After a last minute pullout by Smart Telecom, the panelists for the evening consisted of Iain MacDonald from Perlico, Ingvar Gaardsson from Magnet Entertainment and Fran Rooney from Ice Broadband. Guy Johnston chaired the event, keeping the verbal spam to a minimum. A range of topics were discussed during the course of the evening and there was some interesting feedback from the floor also.
The main focus of the evening was on the regulatory and infrastructural challenges facing competitors such as Perlico, Magnet and Ice Broadband. Each of the panelists voiced their concerns at the progress of the LLU process and the effect it was having on their business.
Iain MacDonald noted that Perlico are signing up hundreds of customers per day, but until the number portability issue was resolved, he couldn’t justify investing in value added services such as IPTV or VOD.
Magnet Entertainment CEO, Ingvar Gaardsson pointed out that his company was currently offering these services and highlighted the fact that it was possible to offer them in the Irish marketplace. He also alluded to the fact that few operators that were currently engaged in the manual number portability process.
MacDonald rebutted this point by stating that it was pointless to engage with eircom in the manual number portability process because it was being managed on a spreadsheet.
Fran Rooney contrasted this perceived bickering between competitors by stating that the alternative operators needed to show leadership and work together with all the parties involved in order to find a solution.
Given the event title, there were discussions about the different business models and solutions that the alternative operators were pursuing. The potential of value added services was noted. Apart from the triple-play package being offered by Magnet Entertainment, Iain McDonald used a French company, Illiad, as an example of a similar company in France that was profitable. Illiad offer a host of services including video-on-demand, for approximately €30 per month confirming that such a business model was viable.
Alternative solutions to solve the availability problem were discussed. The ensuing conversation mainly focussed around WiMax. While the panelists were agreed about its potential, it was noted that the technology had some way to go to live up to its billing. Ingvar Gaardsson noted that he believed that it was currently not viable as a mainstream solution, but feedback from researchers currently working with the technology in one of Magnet’s sister companies had been positive.
o2’s announcement that they would be entering the broadband market was also delved into. The capacity of their proposed service was noted. Iain MacDonald pointed out that the 15MB connection per baystation would have to be shared between all users, but a service like Video-on-Demand could not be offered because it would require a 10MB connection for a single user. That said, it was generally agreed that while the mobile operators’ broadband offerings might prove to be expensive in comparison to services currently on offer, their availability might prove to be attractive to consumers.
The event closed with a discussion about the level of demand for broadband in Ireland. One audience member questioned whether the Irish public had an appetite for it, alluding to how the country’s socio-economic makeup may be inadvertently negatively influencing demand. With a fall in landline usage and many of the baby boomers unable to purchase a home, there may also be other unforeseen factors which are contributing to Ireland’s poor broadband take-up.
The panelists offered a number of examples of a different view. Fran Rooney pointed out that his company, Ice Broadband, had provided broadband at this year’s Electric Picnic festival. He noted that there was a long queue of concert goers queuing for the solitary ATM in order to refill their glasses and then was delighted to see an equally large crowd of people gathered to use the broadband service available in the Internet cafe next door.
Of course, a discussion about the Internet wouldn’t be complete without noting the huge popularity of sites like Bebo in Ireland. While some people may doubt the current level of demand for broadband in Ireland, it cannot be denied that there is an entire generation making the switch from the television to the PC. Their newfound addiction to instant messaging and social networking is going to fuel their desire for high capacity connections at affordable rates.
Technorati Tags: Broadband, First Tuesday, Ireland, Telecoms
I’m not a telecoms expert but I feel it is disgraceful that Ireland Inc is in this situation.
We showed leadership and vision over the past 40 years with our investment in education and it has paid off & we’re seen as a switched on vibrand economy. We should show similar leadership now on this fundamental issue for Ireland.
Fran Rooney got it right – all the players should unite in a forum to get it done properly. Is that not what TIF should do? There’s no point in blaming Eircom for delaying progress / openness etc – if I was Eircom I’d protect my patch too.
There will definitely be a growing demand for broadband services – Ryan Air vs Aer Lingus proved that – by making the product less expensive and available to everybody the customers will come.
In summary:
– get the investment made in infrastructure
– block all monopolies, open the market for all
– get client transfers automated (not depending on Eircom spreadsheets?)
– offer it for free to all
– the tide will rise for all boats
– as Fran Rooney said, make it an election issue
I attended this event last night and I must admit that I left disappointed.
The title sounded very promising (and was sure to attract a substantial number of participants) and I expected some enlightened discussion on what are the most pressing problems in the industry right now and where people see it going over the next 4-5 years.
I did arrive a little late, so I’m not sure what happened at the very start of this event – given the broad title, I had expected that there would be a small set of questions to be addressed which would give focus to the discussions (eg what are the problems with LLU at present and what can be done? what are realistic timeframes for rollout of IPTV and will it offer the potential for new services, will Bittorrent/p2p impact IPTV revenues? what is the view for future wireless services – 3G or mixture of wireless access technologies? How will these fit together? What new services are likely to see growth over the coming years? How will FMC happen? etc). Instead there was a mixture of meandering diatribes and random observations, so I guess such a set of questions was not posed at the outset.
I was also underwhelmed by the level of discussion which had a technological bent: HSDPA was mentioned once, almost apologetically. While I understand that many within the audience may be from a business background and hence may not have such a deep understanding of the technology, a savvy businessman would at least want to know what an important new technology is and what it can do (not necessarily how it can do it). While I’m not advocating that the discussion be dedicated to matters technological, I think they should naturally enter the discussion from time to time as necessary (especially when considering wireless technologies) and their advantages and limitations should be highlighted.
Relating to this matter: when HSDPA was mentioned, it was pointed out that this has a capacity of 14Mb/s shared. I was at a conference last Oct where a guy from TNO Telecom in NL presented results (admittedly simulation) to show that HSDPA can deliver about 3Mb/s to a single user if it’s consuming all the data resources in the cell (some resources were reserved for voice traffic). If the resources had to be split between users, the capacity was reduced. I know that HSDPA systems are being rolled out now, so I guess concrete results from the field are available – I doubt that they reach anything like the 14Mb/s quoted above, but I could be wrong.
Lastly, I was amazed that there was a discussion for (I guess) 15 mins about whether or not there is a demand for broadband in Ireland. I was suspicious that the guy who posed the question was some eircom representative (he never gave his affiliation) trying to manipulate the discussion such that it did not reflect eircom as the recalcitrant incumbent as is usually the case at such events – perhaps this is a bit cynical. I guess most member of the audience did not need convincing that there is a demand for broadband – in my view, the chair should have more or less ignored the question or perhaps asked for a show of hands to see how many of the audience believed that there was a demand for broadband: if most of the attendees at such an event do not believe there is an unsatisfied demand for broadband (at the right price, naturally), then the Irish telecoms sector is in dire straits indeed.
I attended the meeting too, I work with Magnet Networks, and I found it interesting, for it strikes me as odd, that the Government, despite it’s knowledgable civil servants and consultants, still has not shared with Industry a clear vision of where we need to be with broadband in this country in the next 2,5 and 10 years.
The successes of the past (the digitisation of the P&T network, the luring of Global Crossing to the country and the commencement of the MAN programme) were boasted about, however it was clear that nobody in the room had a clear understanding of where Government policy was trying to go and how.
I believe we need a clear ten-point plan, and I believe that the key issue facing the Minister coming up to the next election is how to make some easy and clear wins on Broadband and I propose the following:
1. Define Broadband target levels clearly, and include Quality of Service indicators, such as low latency, zero contention, high availability, low jitter, IPv6, and traffic prioritisation (without these being available, next generation services such as VoD, IPTV, nPVR etc. won’t progress quickly.)
2. Reinstate the structural funds program of matched funding for telecoms companies to extend their networks. This would allow eircom to bid for the funding they claim they need to extend their network to the rest of the currently unserved exchanges. It would also allow competing operators to fight for the same funds and enforce an efficient allocation process. Migrate the GBS into this.
3. Cease the creeping MAN extension program and instead look to deepen the reach of the MANs in the residential areas of the ‘Gateway Towns’ including Dublin. The next phase of broadband investment will ultimately be some form of FTTC.
4. Address the backbone issue. Publish the ‘Dingle Report’ on the consolidation of the National Information Infrastructure Assets (CIE, Bord Gais, NRA, Luas, Dublin City Council etc.), and put out an RFP to industry looking for costed proposals to implement it.
5. Move forward quickly the Electronic Communications (Miscellaneous Provisions) Bill.
6. Move forward quickly the draft Wireless Telegraphy Bill.
7. Publically propose the seperation of the Network and Retail divisions of eircom, even offer the investment support of the National Pension Fund.
8. Shake things up. Review the structure of the Department’s Divisions, consolidate Broadcasting and Communications, Appoint a new 2nd Secretary to head it up. Establish a permanent rotating advisory group of external experts. Reallign the department to face a converging media environment and try and re-engineer, re-invigorate the approach of Government. Broadband can seem boring and intangible. It has been on the agenda for years without ever seeming to get better…
9. Ask Comreg to get eircom to implement a ‘Naked DSL’ product so that those wishing to buy broadband aren’t also obligated to take a voice line rental.
10. Establish a national task force on moving the Island of Ireland towards the ‘Next Generation Network’ as is being done in the UK by BT 21CN.
Rory,
What do you think of the effects of the Euro based digital rights legislation will have on the telco sector here. What is the persepctive of the Irish telco’s on the retention of data?