Eircom targets 100,000 broadband users by 2004

19 Nov 2003

Eircom has said it is on target to reach 100,000 broadband users in the Irish market by the end of 2004. The company made the statement at the launch of its retail strategy in alliance with 3G, the Sigma Wireless venture which acquired all of Eircom’s stores nationwide earlier this year.

The managing director of Eircom Retail Cathal Magee said that 11,000 people per week were looking into adopting broadband and 1,000 are signing up for the service.

The €300,000 joint venture with 3G with the unveiling of the first Eircom Broadband Studio at 3G’s store in Henry Street, Dublin, will see the two companies open up areas in several of the 3G shops that will allow consumers to experiment with broadband over PC and iMac installations and buy computers, PlayStation 2 and Xbox bundled with Eircom broadband.

According to the general manager of 3G’s Henry Street store, John Dempsey, from today, consumers who buy PlayStation2 games consoles with Eircom’s consumer broadband offering will be able to buy the consoles for €99 instead of the original €200. Consumers will be able to buy the Xbox Live starter kit with broadband for €149 instead of the standard price of €279. As well as this, Apple iPods purchased with Eircom broadband will cost only €149 instead of the full €349 price mark.

Eircom’s Cathal Magee added: “The rationale for this studio was simple, physically demonstrating broadband on a one to one basis is the ultimate means of driving consumer demand. With 850,000 telephone lines now broadband enabled; the broadband promotion offering free connection, free modem and one month’s rental and our €4m national advertising campaign, we now have the key ingredients for driving broadband take up in Ireland. This is demonstrated by the fact that we are currently signing up over 1,000 customers per week.”

Speaking at the Eircom Broadband Studio opening, the Minister for Communications, Marine and Natural Resources, Dermot Ahern TD warned that Ireland needs to boost its broadband penetration and that despite such successes as being the largest gross exporter of software in the world: “We are in danger of resting on our laurels. The general public needs to be shown the benefit of broadband in a practical way to steer adoption.”

However, Eircom rival Esat BT warned today that Ireland is at risk of falling further behind competing nations in terms of broadband takeup and called for urgent action to increase competition in the braodband market by radically driving down the wholesale price Eircom charges alternative operators. Esat BT boss Bill Murphy called on the Government to make this price reduction a national strategy.

Esat BT made the call the same day that its parent company BT declared that 100pc broadband coverage of every UK community is achievable by 2005 if industry and government pull together. If achieved, this would put the UK in a position to lead the world in broadband adoption.

Murphy said: “If Eircom continues to charge unattractive wholesale prices then Ireland can forget about ever competing with the likes of the UK. Widespread broadband adoption is vital to the economic future of Ireland, but will not happen while Eircom continues to maintain its stranglehold on the market through the provision of uncompetitive wholesale pricing to other operators.”

Murphy added: “In the UK, we see a vibrant broadband market, with 150 competitors vying aggressively for customers. Retail broadband prices are as low as €22.98 per month. BT as the incumbent only holds a 25pc market share, which reflects the hugely competitive landscape we so badly lack.

“In stark comparison here in Ireland, Eircom has a 75pc market share and Esat BT is effectively its only competitor for business and residential customers. If this situation continues, then broadband adoption will continue to be low and Ireland’s attempts to become a knowledge-based economy will fail. It is time for Eircom to step up to the plate and become a proper wholesale provider charging fair prices. If it does not, the regulator should step in without further delay to ensure that it does,” Murphy concluded.

By John Kennedy