Clarity will speed up spectrum investment


26 Sep 2011

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Vodafone Ireland CEO Jeroen Hoencamp

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Vodafone Ireland CEO Jeroen Hoencamp says the telecoms sector in Ireland is ready to invest in next generation infrastructure. He says the societal and economic benefits to Ireland cannot be underestimated.

Hard-working and focused, Vodafone Ireland CEO Jeroen Hoencamp believes Ireland is well placed to reap the rewards from the global digital economy but it must do so by turning smart economy rhetoric into positive, real action. This involves delivering better services to citizens, universal broadband availability, a State ICT strategy that takes into account trends like cloud computing, and ultimately focused investment in education.

In the weeks following this interview with Hoencamp, a lot happened on the broadband front in Ireland.

Firstly the Minister of Communications Pat Rabbitte TD put in motion a high-level taskforce consisting of industry CEOs and department officials, and said he intended to see Ireland achieve EU Commissioner Neelie Kroes’ targets of 30Mbps broadband to all citizens and 50pc of citizens subscribing to 100Mbps by 2020.

In addition, a European Commission study revealed that 58pc of Irish households now have broadband internet access (up 4pc since end 2009) compared to an EU average of 55pc. It also found that 69pc of Irish households now have a computer (up 5pc on previous survey) compared to an EU average of 68pc (up 4pc). Hoencamp’s home country, the Netherlands, has the highest computer penetration at 95pc (up 3pc). Ready or not, the Irish are becoming increasingly digital.“We’re definitely on the right road,” Hoencamp agrees.

On the subject of investing in next generation networks (NGNs), which Minister Rabbitte’s taskforce hopes to address by setting milestones and targets, Hoencamp says the industry is keen to embark on the investment journey. “These are thing we would all like to fix in the next month or so but in reality that is not possible. It will take multiple years.

“We welcome the initiative by Minister Rabbitte who I think has put a good bit of effort into it. He has been very clear that this is one of the biggest priorities for him in the telecoms space. He agrees that it is much better for the public and private sectors to work together in finding a model instead of just throwing it to the private sector and or keeping it all in the public sector, which would definitely not be the right thing.

“I think it’s crucial that private and public work together. We haven’t defined the model as such but it is probably going to be a mix of private and public and fixed and mobile and of current and new infrastructure. We have to find a way to do this together. The simplest way to say it is there’s not enough money to go around in Ireland, private or public, to have all these players build their own infrastructures.”

In the last two years alone, Vodafone has invested €140m in upgrading its infrastructure. “We will do what we have to do to stay ahead of the curve but we will have to work with other parties, either on fibre or LTE (long term evolution).

One of the key hurdles and one that can’t be addressed quickly enough is the subject of spectrum and spectrum auctions. Ireland has an abundance of wireless spectrum and with the freeing up of 900MHz spectrum, operators like Vodafone are keen to see it is used to enable 100pc broadband availability in Ireland.

“The Government can really help by facilitating all players in the market with practical things like making it easier to put fibre into the ground and to build towers wherever needed if we want to build this network.”

The provision of milestones and clarity over spectrum investment will speed up the opportunity for executives like Hoencamp to go to their parent companies and pitch for investment. The longer the delay on when spectrum will be allocated and the lack of a co-ordinated industry/government investment plan for NGNs, the more uncertainty that exists and the harder it will be to win this investment, he says.

In terms of spectrum allocation, Hoencamp is concerned there may be delays and it could be 2012 before the market is clear on how much it will cost and how much will be made available. “The sooner we can get clarity and we all know how much money it will cost and what spectrum we will have the sooner we can create a strategy and start executing.”

He stresses Ireland has an important opportunity to become a digital leader. “We are committed to Ireland. Whatever happens we will be able to fund that spectrum. But it is helpful to do that sooner rather than later. I have a certain amount of capex available for Ireland, give or take a small margin. And if the Government decides or ComReg decides to ask for a huge amount for spectrum I’ll have less money to roll out the network. I hope we can all end up paying a fair price for the spectrum to make sure it is being used.”

While telecoms operators like Vodafone wait for clarity, Hoencamp warns Ireland’s opportunity to be a major player in the digital economy could slip away.

“While we wait we try to leverage the situation by building different scenarios or doing as much as we can to deal with the uncertainty. But again it wouldn’t be helpful for things to be delayed or end up being very expensive. The sooner we do it, the sooner we have clarity and the sooner we can all get started.”

The digital society

The biggest beneficiary of a digital economy, Hoencamp believes, will be society in general. Better services to citizens, greater access to opportunities like jobs and education and a more transparent State will sit alongside job creation and opportunities for entrepreneurs.

“It’s good we went from below average to marginally above average in terms of broadband access and computer usage, but we need to establish two things: we need to get that figure up way higher and get up with the big boys and have highest penetration and usage of internet. Secondly we need to make sure that quality actually means speed and capacity of the infrastructure to allow people to have a really, good experience.

“That’s both from a consumer and a business level. We have a great many multinationals in this country, in particular Facebook, Apple and Google. And many of the other IT players are here. They need to have a state-of-the-art infrastructure. We have data centres here that are underutilised. I think that at a structural level it is really a necessity for Ireland to be able to compete.

“We have great people, great assets, a quite attractive corporate tax rate, a safe and stable English-speaking environment and a good education system, but we are behind on the infrastructure side of things and that will start to hurt us more and more going forward.”

One of the true marvels of the age we live in is the smartphone. In its recent quarterly results Vodafone revealed that it has now 530,000 smartphone users on its network in Ireland, which per capita is above average. “Everybody will have access to the internet through smartphones and the pace we’re upgrading our mobile network … it is quite amazing.

“But if you look at the fixed line infrastructure, that’s where everyone is most limited now. If we still have an average download speed of 6.5Mbps across Ireland, then that is poor. We can already do a lot better on mobile, the challenge is to do that outside the bigger cities and towns and in the rural areas.

“The opportunity is there to bring fibre to the nearest town and then from there make sure we have an LTE rollout throughout the country. The uptake of smartphones and other mobile broadband devices shows we have an opportunity to bridge that digital divide much quicker than we would be able to do through fixed.”

Applications of the future

What does Hoencamp think the seismic technological developments of tomorrow will be? He points to the opportunities that exist in providing advantages to ordinary people through areas like mobile healthcare.

“We really have a great opportunity to provide a much better healthcare service at a much lower cost if we can really incorporate the use of the latest technology. We have to stop throwing more money at healthcare and find clever ways of treating people staying at home. I think mobile healthcare is a massive opportunity.

“If I look at machine-to-machine (M2M) technology, while it isn’t very sexy and most people don’t know what it is, I firmly believe that over the next five to 10 years there will be so many devices equipped with a SIM card, it goes beyond any type of imagination. That represents a huge opportunity for us to find ways to do things much more efficiently. Take things like smart metering – it would be far more efficient to have a SIM in these devices and everything to be automated in real-time.”

As a parent Hoencamp is passionate about education and urges Ireland to get to grips with its digital education policy. “It’s about people. As a CEO it is apparent to me that no matter what you do – technology or infrastructure-wise – you’re only as good as your people.

“A country is only as good as its people and education is one of the key drivers in that. A start-stop approach doesn’t work. It takes longer than infrastructure, 10 years at least or 20 before you really see the benefit from changing education or going in a certain direction.

“Ireland needs to have a good long-term education plan. Obviously it is very important to be successful with all the technologies that are there and that people are encouraged to take up science and maths and engineering and computer science all the way up to third and fourth-level degrees. But you also need to balance it with entrepreneurial skills.

“Languages are also very important because if you create an environment to chase foreign investment, languages are critical.”

He concludes: “If there’s one area where we should continue to invest, it is education. That’s a long-term plan. If you have the best skilled workforce, and we have a good reputation for it in Ireland, and you have enough people technologically savvy with the right entrepreneurial spirit, on top of a good ICT infrastructure, then you’re looking at a good future.”

BIOG

Jeroen Hoencamp joined Vodafone Ireland from Vodafone Netherlands, where he was director enterprise since 2006 and member of the general management board for the last six years.

He joined Vodafone Netherlands in 1998 and held senior management positions in sales, corporate marketing and retail.

He spent the earlier part of his career in Curacao, where he worked as an officer in the Royal Dutch Marine Corps and in Atlanta (US) as senior marketing representative at Canon Southern Copy Machines, before moving to the Netherlands in 1994 to work in senior marketing and sales positions for Thorn EMI/Skala Home Electronics BV.

Digital Ireland Forum

Jeroen Hoencamp is one of the panelists at The Digital Ireland Forum, a Silicon Republic breakfast event on 30 September 2011.