Review of the Year: Part II (May-August)

29 Dec 2005

A flurry of acquisition and a buoyant time for IT vendors suggest that this was the year that finally exorcised the ghosts of the technology slump. Sit back and take a rollercoaster ride through the year.

Enterprise Ireland revealed more about its strategy for bolstering growth among Irish companies. Key to this was acknowledging that Irish industry is disproportionate in size to the multinationals based here, with indigenous SMEs currently lacking the scale to compete effectively overseas. Frank Ryan, chief executive with the state agency, noted that small firms would be encouraged to innovate: “The next 10 years will not be a rerun of the past 10 years. Serious transformation of our economy will be required.” This emerged as two surveys showed Ireland had slipped in the competitiveness stakes. The Swiss business school IMD found that the country fell from 10th to 12th place in the rankings. Meanwhile the European Commission floated the interesting, if not exactly new, concept that electricity lines could be used to provide low-cost high-speed internet access. A spokesperson for 3 fended off rumours that it would delay its launch until the end of the year – it didn’t – as other players such as Perlico, Imagine and Pure Telecom mulled their options for launching as mobile virtual network operators (we’re still waiting). Speaking of mobile, some interesting figures showed that Irish mobile phone users are spending around 50pc more than Europeans on their mobiles – average revenue per user here was found to be €47 per month compared to the average of €31. Our thumb-and-finger dexterity continues apace, with Irish people sending 89 text messages per month. Lastly, one industry veteran offered the interesting opinion that the biotechnology industry has the potential to overtake the IT sector, as Ireland welcomed its first investment by one such company, Nabi Biopharmaceuticals. From small acorns…

As if anyone doubted that there’s serious money to be made in online gambling, the betting website PartyGaming announced plans to float on the London Stock Exchange — its estimated market cap of £5.8bn sterling would have made it more valuable than British Airways or Boots. Its final flotation price was more than £1bn sterling lower, proving the old adage that you win some, you lose some. There was explansion aplenty in the early days of the month: component maker QLogic announced plans to set up in Dublin, creating 100 jobs, while SAP‘s Galway office was halfway to its target of 350 employees on opening. The Department of Enterprise, Trade and Employment boosted the coffers of a venture capital fund targeting high-potential companies in the border, midland, west and south-west regions. Even further afield, Denis O’Brien was celebrating as his company Digicel won a GSM licence for Haiti. Also in the mobile arena, Siemens found a buyer for its struggling mobile division in the Taiwanese manufacturer BenQ. Security — an issue at any time of the year — was in focus for banks as new arrival RaboDirect introduced a new password generating token for customers to use when accessing its website. It claimed this device significantly reduces the chances of fraud through online scams such as phishing. And just so no one could accuse the Government of not doing anything on the internet access issue, news emerged that the Houses of the Oireachtas issued a tender for more than 200 broadband connections … to TDs’ homes and constituency offices. That’s one way of addressing the digital divide.

Speaking in his capacity as chairman of the American Chamber of Commerce in Ireland, Eoin O’Driscoll — who also heads up the Government’s Enterprise Strategy Group — warned that Ireland’s skilled workforce will no longer be capable of meeting the demands of modern global companies if a looming skills crisis is not addressed. Addressing a 4th of July lunch O’Driscoll pointed out that some 80pc of Ireland’s workforce of 2015 are already in the labour force and the fact that 30pc of the current labour force hasn’t obtained a Leaving Cert means a potentially paralysing skills crisis is on the way. Another blow was dealt to the ambitions of Ireland’s technology sector when the European Parliament voted to reject the Common Position on the Computer Implemented Inventions Directive. The result was a blow to the many large technology firms that campaigned for the law, saying it would protect and encourage research and development. However, the outcome will delight many other groups, including individual inventors and the open source movement, which were outspoken critics. In a statement ICT Ireland, the IBEC lobby group for Ireland’s technology sector, said it was “disappointed” with the outcome and that the parliament had “lost an opportunity to further Europe’s development as a knowledge economy”. EURid, a registry appointed by the European Commission to manage the new .eu domain name, appointed IE Internet as its first registrar in Ireland. The Dublin-based internet service provider became one of 27 registrars in 15 countries across Europe that will be responsible for issuing the new domain to public and private organisations. “It is my conviction that without mobile Eircom’s future would have been unnaturally limited and consequently Irish consumers would have been disadvantaged,” chairmanSir Anthony O’Reilly told the company’s AGM in July. His comments came within hours of Eircom emerging as the successful bidder for Ireland’s third mobile operator Meteor after Smart Telecom dropped out of the race.

The month traditionally hated by journalists as the “silly season” was anything but in terms of important developments in Ireland’s telecoms market. The country’s fourth mobile operator 3, which is owned by Hong Kong-based conglomerate Hutchison-Whampoa, launched its 3G service to the Irish marketplace with 99.5pc population coverage for its voice, text and GPRS services (as a result of a roaming deal with Vodafone) and 60pc population coverage in terms of 3G data services. The Garda Síochána signalled its intentions to move into the world of Tetra (Terrestrial Trunked Radio) and issued a tender for 100, rising to possibly 150, Tetra portable radios, fuelling speculation about the force’s plans to roll out a nationwide Tetra network. Tetra technology paves the way for an encrypted, instantaneous voice and data network that is swiftly being adopted by police and emergency forces as well as transport companies throughout the world. ComReg claimed that some 23pc of Irish home internet subscribers now use a broadband product, with DSL as the main method of broadband access in the home. The survey of 1,000 people aged between 15 and 74 revealed the take-up of single-billing products continued to grow with 26pc of those aware of it now using the service. The survey found that 34pc of current narrowband (dial-up) internet users were actively considering moving to broadband. Ireland’s ongoing broadband woes were given further credence when IT research firm iReach in a survey revealed that out of the 5pc of businesses that change their service provider in terms of broadband services, some 55pc of these do so for cost savings. Cork City Council revealed plans to raise awareness and use of ICT amongst businesses and consumers, and develop Cork into a truly e-enabled city.

By Gordon Smith and John Kennedy

Pictured: John Acton, director of corporate business at Smart Telecom