Telecoms operator Eircom says that it is no longer going to proceed with plans for an IPO because it sees encouraging signs of momentum in its business and may not need to raise capital on the markets.
Dublin: 21.09.2014 07.13PM
Tomorrow Communications Minister Pat Rabbitte TD will reveal a new national broadband plan for Ireland. For a country that has been disappointed time and time again in terms of digital infrastructure, will this plan (agreed upon by a taskforce consisting of leading telecoms CEOs) deliver and can we avoid a digital divide between those who get quality broadband and those that can’t?
The answer to the last question – realistically – is no, but we can certainly work to limit the damage.
The damage I’m speaking of is opportunities for education, enrichment, entrepreneurship, employment and inclusion. The divide is here. Already companies like Amazon and Apple are recruiting workers in Ireland and if you don’t have a minimum of 4Mbps and 5Mbps respectively to your home office, you needn’t apply.
Welcome to business in 2012.
Tomorrow morning at 11am the new plan “Delivering a Connected Society – A National Broadband Plan for Ireland” will be unveiled at Croke Park. As stated in the invitations to the press the Next Generation Broadband Taskforce will set out the policy and investment framework to deliver on the plan.
This will include arrangements to reduce the burden of red tape for commercial investors in next generation broadband infrastructure.
It will also seek to provide next generation broadband access in areas of the country where it is not commercially viable to provide services.
There is a lot riding on this and over the last 10 years the Irish businessperson and consumer have had their hopes dashed time and time again by schemes that don’t work – let’s not forget the Group Broadband Scheme, which was modeled on the Group Water Scheme of the 1940s and 1950s.
In that latter scheme is a germ of the truth – this infrastructure is as valuable to businesses in 2012 as water or electricity, and is often the arbiter between creating a job or not.
The government and industry need to look realistically at other parts of Europe where similar problems have already been resolved. Northern Ireland for example – 90pc of the premises across the region are capable of receiving speeds of up to 80Mbps and in the UK BT is looking further at speeds of up to 300Mbps.
The model that worked in that instance was gap-funding where the funding was provided in the places where it was commercially unviable to deliver. However, for a nation like Ireland that frittered away its good fortunes on an apocalyptic property bubble, there isn’t that much cash left in the kitty.
But the harsh implication in my mind as I walked out of the Next Generation Broadband report launch in May was how dire the divide could be:
· According to industry more than 50pc of Ireland’s population will have access to at least 70Mbps broadband by 2015. What about the other half?
Major hurdles identified by the Next Generation Broadband Taskforce include accessing existing state-owned infrastructure such as the ducts that run under our motorways.
Then there is there is the civil engineering impact within towns and cities. Any local authority member worth his or her salt in 2012, realizing the scale of the unemployment problem in the nation they claim to patriotically love, should be supportive of these engineering projects even if it involves digging up their precious streets. Not only does it mean jobs in an immediate and physical sense but also opportunities for years to come for local businesses expanding into the 21st century, entrepreneurs starting businesses and for commerce to flow locally and digitally - all of this will mean even more jobs.
Minister Rabbitte pointed out at the report’s unveiling that 3.4pc of GDP in Ireland comes from the internet economy, compared with 7pc of GDP from the UK’s internet economy. UPC CEO Dana Strong recently pointed out that this discrepancy amounts to a potential of €12bn in lost revenues for Ireland.
Some €3bn is spent online every year by Irish consumers and 70pc of this flows out of the country to overseas websites. Less than 70pc of Irish firms have websites, and of these only 22pc are capable of conducting e-commerce transactions. On the latter point there is an enormous issue to be studied in terms of how banks are facilitating e-commerce transactions among SMEs.
It is 2012 and I feel compelled to say we are at the same point we stood in 2002. The problems are eerily similar. For these reasons:
· 2002 was the beginning of local loop unbundling – for much of the past decade it was a market failure due to indecisive regulation, lack of political understanding of the economic imperative and successful defensive maneuvering by the incumbent. Up until recent years only 5pc of local lines were in fact unbundled.
· 2012 should be the beginning of a new era of next generation access (NGA) substantially enabled sub loop unbundling (fibre to the cabinet) if homes want to enjoy speeds of up to 80Mbps and higher. We cannot allow market failures to occur again.
· Wireless broadband will be critical to any next generation solution due to our nation’s unique geographic layout. In 2002 Ireland avoided much of the auction frenzy and a sensible approach was taken to 3G licensing and by and large we’ve kept pace with the march of 3G.
· In 2012 4G technologies like LTE are being deployed across the world. Clarity is needed on the shape and timing of Ireland’s spectrum auctions for 4G in light of the looming digital switchover of TV from analogue to digital and what will be done with the old 2G spectrum.
Some of these issues require highly technical answers. But for the man or woman on the street, the student, the local shop owner, factory manager, the parent, the potential entrepreneur – all of whom could be tomorrow’s job creators – simple answers will do.
When can we get it, how good will it be and for how much?
UPDATE: The National Broadband Plan was revealed on Thursday by Minister Pat Rabbitte, laying out targets to provide at least 30Mbps broadband to every home and business in Ireland by 2015.
Interactive digital image via Shutterstock