Eircom considers fibre for new-build homes

6 Sep 2007

Eircom is studying plans to potentially kit out future new-build homes across Ireland with fibre optic cabling instead of copper to future-proof itself for next generation services of between 25MB and 100MB, the company’s chief executive Rex Comb told siliconrepublic.com.

“Average consumer data usage in Ireland of Eircom’s network has grown five-fold in the last 18 months from 5KB per second to almost 30KB per second,” Comb (pictured) said. “People’s usage of data is growing exponentially. Fibre is the way to go for the future and the future is services of between 10MB and 25MB over copper and up to 100MB over fibre.”

Eircom last week revealed that it has spent €369m on capital investment in the past 12 months, an increase of €103m on the previous year. Comb said that 400 additional exchanges have been earmarked for broadband-enabling and that at present the company is enabling at least 25 exchanges a month. This will bring Ireland to 96pc broadband coverage by 2009.

The company also revealed that 195,000 new subscribers signed up for broadband services, a 75pc jump on the previous year.

Australian native Comb joined Eircom last year having headed up Babcock & Brown Capital Management and previously led the Asia-Pac operations of toy giant Mattel and logistics giant Linfox.

He agrees that questions of reaching the last 10pc of Ireland currently without broadband services as well as raising the bar on what constitutes entry-level broadband beyond 1MB are critical.

“Logistically we are going to move in the direction of fibre to the kerb and to do that we are currently trialling VDSL services but we are also examining fibre to the home services.

“It would be very difficult to roll out fibre everywhere and VDSL allows you at least to bring fibre to the kerb and that would yield speeds of up to 25MB in homes.

“But if you think what’s happening in the world of content, deployment of triple play services and new developments like high definition TV, higher data speeds are critical.”

Comb said that as a company chief executive there is a balancing act between delivering value for shareholders and investing in the future. “That raises important capex decisions and in deciding what the next logical step will be it could be fibre to the kerb in most areas and fibre to the home on new builds. Ireland has a new housing stock of 275,000 homes and historically we would put in copper.

“At a recent meeting they wanted me to approve copper plans for the next 12 months and I said no. I approved it for the quarter but said let’s think about this in the context of our investment in next generation networks (NGNs) and the core infrastructure.”

Comb said the time was right to ask these questions. “Historically fibre was expensive in quantity as well as termination. But now the costs of fibre and copper have come a lot closer and begs the question about return on investment in a few years if we put fibre into new-builds.”

He rejected concerns that Eircom’s €60m investment in its core network and future NGN could lead to an imbalance between large urban centres and the regions.

“First of all our investment in our core network is not a Dublin-only thing – there are 248 network points around the country that will benefit from the investment. This will lead to extra backhaul capacity.

“In terms of the VDSL and fibre trials – which are taking place in Sandyford, Dundrum and Priory Park – of course we’re running them from Dublin and once we decide a business case for Dublin we’ll move on from there. But as a business you are going to try and invest where you think you’ll get a return.

“Historically our plans have been around copper but in the next 12 months I want to start to change the thinking around this. The incremental cost of fibre might be a bit more but won’t it be much better for the business down the road?”

On the subject of local loop unbundling (LLU) and calls for the separation of Eircom’s network from its retail business Comb said: “I’ve said this to ComReg; the network and the wholesale business must be run as an equivalent business that will service our own business as well as the needs of other operators. I’m very focused on driving service level agreements (SLAs) with other operators but also on having a retail service equivalent.”

Comb said that at the end of September Eircom will present its action plan for intra-operator migration that will allow other licensed operators to transfer customers from a bitstream product to LLU.

Earlier in the year the company made an announcement on inter-operator migrations whereby a customer could move from one operator to another using different wholesale products.

“Other operators will be able to avail of this move forward. It’s certainly my view and it’s the Irish Government’s view that if you create competition you get more investment as a result it’s a better outcome for the market. My philosophy is to let water find its own level.”

Rex Comb will be speaking at the ‘Beyond Broadband’ conference organised by the Telecommunications and Intenet Federation (TIF) which will take place at Dublin’s Mansion House on 16 October.

By John Kennedy