Danon commits to broadband competition

20 Oct 2006

Eircom chairman Pierre Danon (pictured) yesterday acknowledged at the Telecommunications and Internet Federation (TIF) annual conference that considerable work needs to be done for Ireland to catch up in the broadband leagues.

He said that Eircom is committed to creating a “level playing field” for other operators.

Danon also acknowledged that parts of Eircom’s network need to be upgraded but made it clear that the company will upgrade the network only where it was financially viable to do so. He added that Eircom will work on the issue of automation of local loop unbundling (LLU) and number portability with the co-operation of the industry and the regulator.

Yesterday the company announced that it was broadband enabling 100 more exchanges around the country and that it would use technology like WiMax to “in-fill” blackspots on the network where people could not receive broadband. This move, it is estimated, will increase broadband reach in Ireland from 85pc to 90pc of the country.

“We need to be positive; broadband is growing fast in this country. We started late but actually we are growing faster than most countries at the same stage of development.

“But we are very late. Less than 10pc penetration in the last estimate. This is half of what other countries are doing in Europe. There is a gap and we must work hard to catch up,” Danon told the assembly of more than 200 telecoms industry professionals.

Danon said he believed Ireland’s telecoms industry overall was in a decent competitive position. “The basket in Ireland is well positioned in Europe. Line rental is more expensive but we make this up by lower-cost calls. Ireland’s competitive position is decent. Prices have come down significantly.”

However, in terms of thorny issues like LLU, Danon said he was committing to creating a more open environment for competition. “This country had done a good job of deregulation until LLU became an issue. We are committed to opening the market for competition. The transfer of customers needs to be automated and it will. This will require the co-operation of regulator and industry. We are committed to a fair and level playing field.”

Of vital importance, Danon continued, was getting Ireland to 100pc broadband availability.

“Availability in Ireland is not great,” he acknowledged. “Some 85pc of the country is broadband enabled compared with 100pc in Northern Ireland. Because of the network’s topology, that 85pc could slide down to 75pc. There are people in broadband-enabled areas that still cannot to get the product and this is detrimental to the success of the operator.”

Danon said the problem largely came down to simple economics. “You need 200 broadband customers to an exchange to make an acceptable payback over time, in some exchanges there are only 200 customers in total. It is not financially viable for Eircom to enable the remaining exchanges.”

Danon added that inside some of the already enabled exchanges there are problems in ensuring line quality due to splitting of lines during the Eighties, resulting in network “blackspots” where people in broadband-enabled areas fail the line test.

“We are going to rearrange the network to resolve these problems. We are making a commitment to advance everything we can. How? We are going to roll out broadband every where that it is commercially viable and that means 100 more exchanges. These will be operational no later than a year from now. We are going to focus on the blackspots. In five urban centres, for example, we will deploy WiMax wireless technology.”

Danon also acknowledged that greater effort needed to be made with line testing. “We were not trying. If you test the line a few times it will work,” he said, promising greater attention to this issue.

“These efforts will bring us to 90pc availability. However, the 10pc remaining are not commercially viable. I am encouraged that the Minister for Communications is considering a public tender to finish the enablement.”

Danon said that once these problems have been resolved the telecoms industry in Ireland can focus on what he terms “relevance” and the unlocking of the potential of broadband.

“There is a revolution happening in the media and entertainment market and massive changes are under way. I foresee major opportunities in digital terrestrial television (DTT) and the combination of that with broadband

“People will look for catch-up TV and the ability to access TV archives from previous decades. There is a strong trend in entertainment and media and the average telecoms firm doesn’t have a choice.

“Voice as a market is going to go away. There is not much revenue in voice and telecoms firms will need to find other sources of revenue. A big battle for the living room is beginning and the winner of this portion of the pie will go to firms that are agile and able to transform,” Danon said.

He highlighted his company’s deal with Setanta Sports yesterday, whereby broadband subscribers will receive broadcasts of important sporting events such as the Premier League, as an important step in this direction.

Danon concluded by saying: “We will work hard to ensure that service providers will have fair access to the network. We are committed to developing an environment for new and exciting services to the community and putting Ireland at the forefront of the digital world.”

By John Kennedy