Bolger is back to bait the broadband competition

20 Jul 2005

In a move sure to rankle his competitors, serial telecoms entrepreneur Seán Bolger (pictured) hit the streets of Dublin with a compelling broadband service, offering consumers 20 hours of 1Mbps broadband for €9.99 and always-on broadband for €19.99.

As models threw €10,000 worth of €10 notes to passers by on Grafton Street, Bolger’s Imagine brand was back in the business of communications promoting the new service.

Bolger explained this morning at a press conference that the service will initially be offered on the back of Eircom’s bitstream product but said plans were in place to unbundled some 40 exchanges around the country. “At present approximately 80pc of the population can access broadband if they wanted to but there is a need for innovative-priced products to whet their appetite.

“Across Europe, 15pc of most countries’ population now have broadband, while in Ireland only 5pc of the population, or less than 140,000 homes, are accessing broadband. Our opportunity lies in the fact that still some 220,000 people in Ireland access the internet through dial-up. We aim to change that,” he said.

Bolger is one of Ireland’s best-known telecoms entrepreneurs, dabbling in the world’s of fixed-line telecoms and the mobile virtual network operator (MVNO) space. By the time he entered the mobile market in 1997 he was already a self-made millionaire having sold his company, International Telecommunications, to the Global Telesystems Group (GTS) for IR£78m. In 2001, he bought back his old company from GTS and re-christened it Access Telecom. Access Telecom currently provides niche telecoms services to organisations such as the Irish Farmers Association and the GAA.

Imagine is Bolger’s consumer brand and he acknowledged plans to launch as well as broadband, MVNO and voice over internet protocol some time in the near future. The company recently raised €12.5m in funding, valuing the company at around €50m.

Effectively there are two products in Bolger’s offering. A basic €9.99 service for 20 hours of 1Mbps worth of broadband, after which the consumer is charged 3.5 cent per minute for additional connectivity. A second product offers always-on connectivity for a flat fee of €19.99 per month.

What will be interesting will be Bolger’s next move. He acknowledged that VoIP is pivotal to the company’s strategy and said Access Telecom is already providing VoIP services to the corporate market.

Bolger’s original foray into the MVNO space under the Cellular 3 brand met with some difficulty in the courts in a battle against Eircell, now Vodafone Ireland. The two companies had struck a deal whereby Cellular 3, subsequently under the Imagine brand name, would buy bulk airtime and sell it on. The trouble was, Bolger was getting too good at it, radically undercutting Eircell’s tariffs and quickly amassing 20,000 customers. Eircell’s decision to stop the service resulted in a High Court case. The court ruled that despite having 64pc of the Irish market, Eircell was not in a dominant position and was right to protect its position. Cellular 3 closed for business with the loss of around 240 jobs.

Asked whether he anticipates such difficulties from the incumbent operator Eircom, under whom he is reselling his broadband service on its bitstream wholesale service, Bolger said it was unlikely there would be any trouble with Eircom. “The fact that we can bring the price down to €9.99 and still make a margin shows there is room for competition in the Irish broadband space,” Bolger said.

By John Kennedy