Businesses nationwide are talking tough about broadband options

11 Dec 2008

Broadband and telecoms provider Magnet Networks has 40 exchanges unbundled enabling it to serve over 600,000 homes over copper. It currently serves over 6,500 businesses over copper and 11,500 homes and firms with fibre optic services. Mark Kellett is the company’s chief executive.

Do you regard the present Irish broadband marketplace as competitive?

Not right now. The real challenge right now is why would an investor invest in local loop unbundling (LLU)? The LLU market has been a failure. The only reason that mobile broadband has been a success is because it is available in places where LLU has failed.

The problem independent broadband companies face is a decision to either invest in their own LLU infrastructure or to resell a bitstream product.

What’s missing in the Irish telecoms market right now is innovation. Where there has been innovation and leadership, competition has happened.

But because of the present state of the market, and because it is so difficult to get return on investment from LLU, CEOs in the telecoms industry can’t do anything innovative apart from reselling an existing product from Eircom.

This means firms aren’t investing in anything apart from marketing spend.

What innovations are Magnet investing in that will help ignite competition?

Our aim is to bypass what we see are clear moves to stifle competition by demonstrating what’s possible.

In recent months, we began offering speeds of between 20Mbps to 50Mbps over fibre, and we have begun offering free internet protocol TV (IPTV) services over the internet to anyone with a broadband connection. We have also launched our own TV channel, MITV, with video-on-demand capabilities.

If an LLU provider can do it, why can’t the Government say this should be a national, pervasive service? Our numbers are growing at 40pc a year, so we are competing aggressively.

What has your move into digital and internet TV taught you about how we will be consuming content in the future?

Internet TV gives you almost instant access to TV data, which will have important implications in terms of marketing and advertising.

The UK digital TV experience demonstrates that between 17pc and 20pc of viewers watch TV in a non-linear fashion. This means they are watching TV on their own terms, when they want to, as opposed to following a schedule.

Magnet is primarily a business broadband provider. What trends do you see in terms of businesses adopting new technologies?

Most businesses today that need broadband have it. But what they’re finding is that what they thought was an 8Mbps service is actually much less because they are sharing it with 24 other firms.

Companies are becoming more discerning, and the only way providers can avoid customer churn is to focus on quality and customer service.

In terms of new technologies, businesses are paying attention to things such as voice over internet protocol (VoIP). Other trends we see taking off in the New Year will be services such as virtual PBX, where the PBX will be stored off-premises, and also the uptake of videoconferencing.

By John Kennedy

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