Bandwidth will be the key to economic recovery, Comreg says

19 Apr 2010

‘Super connected’ digital consumers who want the broadest array of choices in terms of broadband and handsets are key to the economic recovery in Ireland, Comreg said as it unveiled its strategic vision for 2010 to 2012.

The draft strategy, in which people are invited to make submissions on, is aimed at providing a robust and transparent framework for setting priorities and work plans over the next two years.

The strategy aims to take into account the changes in technology, consumer behaviour and industry structure of the communications sector.

Bandwidth demand

Chairman Alex Chisholm said that operators are experiencing major increases in the demand for bandwidth at a time of growing competition in the telecoms sector and falling revenues and margins.

He warns that further major investment will be needed to upgrade fixed and wireless networks to next-generation technologies.

“The way we communicate is changing radically. In Ireland today, consumers spend on average 13 hours a week on the internet,” Chisholm explained. “These digital consumers increasingly demand anytime, anywhere access to voice and video rich content – and the scope to generate content of their own, and to interact seamlessly with peers.

“The modern communications consumer expects a wide choice of service provider, of distribution mechanism and of handset device. They want high quality services and also value for money.

“Boundaries between home life and working life have become more fluid, as more work is undertaken outside of the office or factory. In the fight for enhanced competitiveness, employers want to take advantage of more flexible working methods. Core services such as education and health now rely more heavily on wide electronic distribution of information, and remote access to specialist advice or instruction. “

Operator competition

Chisholm said that there are currently more than 40 communications operators active in the market, competing on the basis of different technology platforms and marketing propositions.

“The core fixed communications network is now largely fibre-based, all four mobile networks are making investments to upgrade in support of faster speed data access, and cable and telecoms operators are increasingly active in the fixed line access market. Consumers and businesses have more choice of individual products and providers, including bundled packages, and are exercising this choice vigorously.

“Connection speeds, measured up until recently in terms of hundreds of bits per second, are now widely available in units of a thousand, with most users taking a speed of between 2Mbps and 9Mbps and multiples of this are now available in some markets.

“In these ways we are now entering the era of the ‘super-connected’ consumer. But there are also challenges in realising the full potential of the new technologies. While the demand for bandwidth is growing strongly, requiring considerable additional investment in infrastructure, revenues and profits in the industry have been falling.

“The market trends in consumption of bandwidth are there for all to see, but the willingness of consumers to pay a significant premium for faster speeds is not so clear cut. The economics of providing additional bandwidth are also markedly different as between areas of high population density and scarcely populated areas.

“The marketplace of today may be well stocked with offers and providers, but this can also be confusing to consumers, and can expose vulnerable groups to unscrupulous behaviour,” Chisholm said.

Comreg outlined a number of strategic goals:

·         To protect consumers – to inform, empower and protect consumers, residential and business, and ensure the availability of a universal telecoms service.

·         Drive competition – to drive access and investment in high-speed broadband networks through cross-platform competition.

·         Foster innovation – promote innovation by providing a predictable regulatory framework that will support investment in converged services for the benefit of the digital economy.

·         Become a centre of excellence – by being an effective, innovative organisation that plays its part in shaping and delivering a knowledge-based economy.

By John Kennedy

Photo: Comreg Chairman Alex Chisholm

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years