Eircom this week revealed that it is going to enable one million broadband users to move to a new entry point of 8Mbps broadband by year end, the culmination of a €100m investment. Paul Donovan is Eircom’s CEO.
After years of resisting it, Eircom seems to be embracing the wholesale market. What has brought about this change?
Along with the other CEOs of incumbents around the world, we all want the same thing. We want to have an underpinned business model to make sure that what will be a major capital investment will get a major return.
We need to work out the regulatory models around fibre to lay that future down and reduce the amount of risk. I want to make it very clear that I don’t believe in the future Eircom will be the sole provider of fibre in this country. We need to make sure that access happens and that telecoms companies work together to reach as many households as possible.
It would be a tragedy in the fibre world if we were to repeat the errors of the past.
How vital is high-speed broadband in reviving Ireland’s fiscal fortunes?
It’s not going to be a manufacturing-led recovery, it’s going to be about us leveraging the fantastic skill sets and high educational attainment we achieve here in Ireland and turning that into a service and knowledge-based set of outcomes.
By the end of the year, more than one million of our customers will have access to much higher broadband speeds than they do today, it’s the end of a very big investment and we think that’s going to help people work better and smarter.
For a high-quality video experience you need to have higher bandwidth and video-based applications, be it for education, commerce or for training. All of these things are going to be very big in the future and I really see Ireland as being well placed to make the most of it.
You say video is becoming a bigger part of your traffic. Does Eircom foster plans to move into internet TV services?
It would be a very foolish man who would be able to predict which applications are going to take greatest sway over the internet. Things come and go very quickly. We have experimented in our fibre trial with so-called IPTV. I do think that would be much bigger in the future. It does, however, require a whole ecosystem of set top boxes, internet connectivity and of TVs to make all that happen.
It’s a little bit like how everybody thought that when 3G came along, it was going to completely transform the way people use their mobile phones. It has taken seven years to get going and now everybody has a smart phone.
With speed increases and a more open attitude towards wholesale, will more companies be enticed to invest in infrastructure?
I think we need to move away from the endless carping about we don’t have this and that. The simple fact of the matter is my company is the one that is making the investment at the moment.
There are plenty of other companies in the country who could actually invest in the same products and services, but they are not. You have to ask them why. The answer is that in many instances the business case is very difficult. You upgrade your customers but your customers don’t necessarily want to pay you more money for a much faster product.
A SLR McLaren sports car can do 200mph but you would expect to pay more for that than a MINI that does 100mph. But actually the real issue for everyone on the internet space is monetising it and people want to have the SLR at the MINI price and we always have to strike the right balance between those things.
By John Kennedy
Photo: Paul Donovan, Eircom CEO