First Tuesday – Ireland

It seems to have been a bit of a whirlwind fortnight since our event. Sorry to harp on about broadband, but since last Tuesday Ireland has come close to bottom of yet another league table, new research has been released on telecoms spend in Ireland this year and iReach paint a gloomy picture of current strategies currently being employed in the marketplace on their blog.

Floating near the bottom of the league, discontent in the dressing room and the future isn’t looking to bright either…maybe Roy Keane should be drafted in to turn things around

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Interested to note that Ice Broadband have snapped up Ildana Broadband. Fran Rooney, a director of Ice, spoke at our event – “The future of Irish telecoms” last week.

It seems that as we move into 2007 we’re going to see a lot more buying as selling in the telecoms marketplace as more companies look to enter the market and others seek to diversify their offering. With o2 and Vodafone expected to enter the broadband market over the coming months, one wonders as to whether they might make a fixed line purchase. o2 were linked with Perlico the other week and Vodafone signed a deal with the BT Group in the UK to get into the fixed line market.

The one thing that seems certain is that the next eighteen months will all see the major telecoms players concentrating on stopping customer churn. The tactics that will be employed will be to diversify standard offerings with value added services. The end result of which will be a customer who is less likely to switch service providers because it would be too much hassle in their mind to change given the number of services they are currently provided with by the one vendor.

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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.

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