Irish homes will need ‘at least 10Mbps broadband’

9 Mar 2007

Irish homes will need a minimum of 10Mbps broadband in the next two to three years, Eircom chairman Pierre Danon (pictured) said yesterday.

He revealed the company’s next-generation network (NGN) rollout will feature VDSL 2 technology, which enables traditional telcos to compete with cable operators in fields like high-definition (HD) TV.

Danon, who was addressing a forum on NGNs organised by the Commission for Communications Regulation (ComReg), acknowledged that Ireland is significantly behind advanced broadband nations like the Netherlands and that it was his intention to catch up in the next two years.

“We are pushing towards an all-IP (internet protocol) initiative. Today what we have is a telephone network with a bit of broadband capability. But I want to have a broadband network with a voice by-product.”

He reckons that it is a fair assumption that Ireland will need a minimum of 10Mbps of broadband in the next two to three years. He illustrated his point by explaining the massive growth in bandwidth demand: the average email attachment uses up 200KB, an episode of Desperate Housewives takes up 500MB and a copy of Pirates of the Caribbean takes up 3GB.

“When I was at BT I said that video on demand was coming but I was told it was stupid. This is happening today. Almost quarter by quarter we are seeing rising levels of bandwidth. Bandwidth on Eircom’s network has trebled in the last 18 months.”

Danon said broadband subscribers were growing at a rate of 4,500 a week, up from 2,100 before August. “Between 15pc and 20pc [of homes] would be a great achievement this year and next year we can look at challenging the leading countries.”

The realisation that Eircom’s backhaul network was a cause for complaint from service providers, he said, was a motivator behind the investment of €60m in putting fibre into the core network. Eircom’s overall network investment in the years ahead could reach €1bn.

Another motivator, he revealed, was the realisation that cable companies like UPC (which is putting €300m into its network in Ireland) are investing in technologies like DOCSIS 2.0 and will put severe pressure on traditional telcos to compete in the digital media space. “We need to do a good job if we don’t want to see our lunch eaten,” Danon told assembled industry professionals.

Eircom’s chief operating officer Andy MacLeod said that the incumbent’s network will have nodes capable of carrying 1Gbps speeds at 174 sites and speeds of 10Gbps at 66 sites. “This will support DSL growth and growth in enterprise data services. As we go forward the new network will replace our Frame Relay and ATM networks. It will mean we can the new network for the cost of what we run the two current networks.”

Danon said that from his work with JP Morgan he has observed that the digital landscape is shifting from the provider-controlled pipe. “In the IPTV space there will be a lot more unicast transmissions than the present multicast TV services.

“My feeling that 10Mbps to every home in two to three years is roughly right. This is assuming that there will be one HDTV per home, with two or three additional TVs in the home, at least two or three PCs, a lot of peer-to-peer traffic, plus voice and gaming activity. Factor all of this in and 10Mbps would be about right.

“I don’t think that in two years people will need 100Mbps but of course the speed of change may mean I will be corrected.”

He acknowledged that he is keeping an eye on what cable operators like UPC are doing. “Eircom won’t have a monopoly in this space. I believe strongly in what UPC will be capable of. I am impressed by DOCSIS and what it can do. It will be a formidable competitor in this country.”

He continued: “Our strategy is simple. We’re going to bring fibre to the home.”

However, he warned that there are limits at present in terms of loop lengths from the exchange. Putting VDSL2 into cabinets nearest the customers will be important in the sense that it will help to reduce the typical loop length from today’s 2.7km to a loop length of around 200 to 300 metres.

“This will result in the ability to offer uncontended 25Mbps of bandwidth downstream and 5Mbps upstream.”

MacLeod said that the first wave of NGN will address 37 customer hubs, effectively 660,000 lines and 1,137 cabinet areas. The first locations in the country to get NGN will be Dundrum and Priory Park in Dublin.

On the question of why VDSL2 (Very High Bit Rate DSL 2) was chosen for the cabinets, Danon said: “At a minimum it will guarantee 10Mbps, it is future-proofed. As we move from 10Mbps to 15Mbps to 20Mbps we will be in a better position as a country.”

He said that visionary decisions were made at Eircom in 1999 and 2000 to prepare for IPTV type services and the necessary ducting has already been carried out in most places. “They saw IPTV was coming and a lot of civil engineering that was needed was done. As a result the cost of doing this now is not as big as it could have been.”

In conclusion, Danon said: “Our investment in NGN can’t be seen as a regressive step in terms of the openness of the network. It requires the industry sitting together in a bilateral or multilateral way and I’m calling on ComReg to facilitate that and define regulation for the future.

“This is new ground that hasn’t been covered in Europe yet. We should all sit at a table together and remember the consumer matters first,” Danon said.

By John Kennedy