Eircom CEO Paul Donovan talks next-generation networks

21 Jul 2010

One of the main speakers at this year’s TIF 17th annual conference, which takes place at Dublin Castle on 12 October, is Paul Donovan, CEO of Eircom and a seasoned telecoms industry veteran.

After running the marketing departments of consumer brands like Mars, Coca Cola and Apple in the early 1990s, Donovan entered the telecoms business via BT, where he ran its business marketing division. He then moved to mobile operator One2One (now T-Mobile) where he is credited with transforming it from the slowest growing network operator in the UK to the fastest growing network. An opportunity arose to become chief commercial officer of Australian mobile and cable TV company Optis.

Before Optis was sold to Singtel, Donovan took up a position as UK commercial director with Vodafone in 1999 and by October 2001 he was CEO of Vodafone in Ireland. Over the past five years, Donovan ran Vodafone’s global portfolio of businesses outside of Western Europe which involved 19 businesses in the US, India, China, Eastern Europe, Turkey, Australia and New Zealand.

Donovan joins Eircom

Donovan took the reins of Eircom last year and saw through its €140m acquisition by Singapore-based STT. In the ensuing months, Donovan has embarked on an organisational restructure that will make Eircom a force in wholesale, global IP transit, digital television and next-generation mobile.

In recent months, Donovan instigated a major €100m upgrade path for next-generation broadband that will entry-level 1Mbps broadband will automatically move to 8Mbps and that broadband customers on 1Mbps, 3Mbps and 7Mbps broadband will be upgraded for free. The new speeds will be initially available in Dublin but the upgrade will be extended to all major urban areas, including Cork, Limerick, Galway and Waterford by the end of the year, reaching potentially 1m people.

The company also revealed that 10,000 homes and businesses in Sandyford, Dublin and Wexford town are set to experience fibre-to-the-home broadband with speeds up to 150Mbps possible, as part of a €20m trial programme. The aim of the trial is to gather the facts for Eircom and other operators on exactly how much costs, materials and civil engineering goes into implementing fibre-to-the-home (FTTH) broadband.

A national upgrade to FTTH, Donovan says, could cost anything between €1bn and €2.5bn as estimated by TIF.

“There is no question that Eircom is strategic for Ireland in terms of overall telecoms infrastructure,” Donovan said recently at the company’s Dublin headquarters. “At the last TIF conference, Lord Carter spoke and he said the starting point is to define the role of the incumbent.”

Donovan emphasised a vital link between private businesses investing in this infrastructure and clear Government and regulatory policy that removes the barriers preventing investors from making the investment.

“The thing which I think is most challenging for us is that there is not yet really explicit Government policy that links the overall ambition for the smart economy, which everybody accepts economic growth has to happen in the future and what happens for CEOs like myself on a day-by-day basis in terms of laying down the foundations to help that.

“It would be extremely helpful if we had greater clarity from Government in terms of what they actually want to achieve.”

NGN debate

Donovan says every country is struggling to come up with an optimal solution for deploying next-generation networks. “Different solutions have been found by different countries to address this issue. But what I think we need is an Irish solution to an Irish set of problems, a solution that is unique for the country.

“You talk about the fact that more competition is the answer. I’m not sure that is true; there is plenty of competition here, all the major mobile networks represented here and in fixed, there are dozens of competitors.

“What we actually need is a climate that balances competition on the one hand and encourages investment on the other.”

Donovan pointed to the estimated €2.5bn investment required to construct the nation’s next-generation network, which essentially involves replacing our traditional copper networks with fibre. “The result will be a network with dramatically increased functionality. What the every CEO of every telco in Europe, particularly incumbents, are trying to figure out at the moment is exactly what is the business model that can justify such a large and such an incremental investment.

“Eircom has often been criticised for not leading the way in terms of fibre investment but if there was a business case for others to do it there would be people quieting up to do it and saying ‘forget Eircom, we’ll do it ourselves.’

“I don’t think that is possible. What we need in the future is to avoid the mistakes of the past where in a drive for competition we actually have multiple networks overbuilt one above the other.

“I don’t think in the future there are going to be four LTE networks in Ireland and I don’t think in the future there are going to be four or five overlaid complimentary fibre networks.

“As an industry, it is incumbent upon us to find a way of making sure we don’t just invest solely in the affluent urban market, but instead spend that same capital expenditure so that the digital divide is as narrow as it can be and people in rural areas can also have access to the enabling power of broadband,” Donovan said.

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