European fibre investments face U-turn danger

13 Oct 2010

Eircom CEO Paul Donovan said yesterday that the economic environment has endangered investments in fibre and urged telecoms providers to work with him on a trial of the technology and other technologies to ensure NGN rollout in this country.

Speaking at yesterday’s TIF conference, Donovan called on the Government to consider its role in enabling next-generation access (NGA) and help the telecoms industry invest sooner in new infrastructure through potential investment incentives, innovative approaches to spectrum allocation and pricing, specific public subsidy for rural areas or encouragement in infrastructure sharing.

He said: “The last 12 months have seen a number of European operators rethinking their choice of access technology. KPN, for example, had originally deployed VDSL over fibre to the kerb or cabinet (FTTC), but is now launching a fibre to the home (FTTH) trial instead and ceasing FTTC roll out.

“Deutsche Telekom similarly deployed FTTC with VDSL in the first instance but has since begun to deploy FTTH. While it may seem that these operators are all leaning towards FTTH, the reality is that they are not rushing in and it is distinctly possible that they will do U-turn once more.”

Exploring alternatives

Donovan said that in the straightened economic environment the incumbent has never sought a regulatory holiday from ComReg on its universal obligations and has set the ball in motion with a €20m fibre trial for 10,000 homes and businesses in Sandyford and Wexford, which has lately been expanded to include Stillorgan and Dundrum.

“I believe we can use the fibre trial to compare the relative appeal of FTTC and FTTH and to explore the benefits associated with each. There are obviously big questions that remain unanswered in relation to technology but we know that the end goal remains unchanged – to provide all Ireland with better services than are available today.”

New technology platforms

He continued: “I believe that it is also important to appreciate that the development of both fixed and mobile investments go hand in hand. It is vital that the industry has line of sight for LTE from a spectrum policy perspective. This is important to enable informed deployment choices, particularly in rural areas.

“We all know that in the short to medium term there is unlikely to be a commercial case for widespread roll out of fibre technology in rural areas. In this context, and given the limited lifetime and relevance of copper, I believe that we could rely on LTE to deliver high-speed wireless broadband in these areas.

Government role

“But you cannot seriously address this issue without being inevitably drawn into the somewhat contentious subject of Universal Service and the need for some form of funding for this. This is a topic which will be subject to much consultation in the coming months. In any event, addressing the digital divide is essentially a political issue, which brings me to the role of Government in facilitating NGA.”

Donovan said that Government has a crucial role to play in providing support to the telecommunications industry.

“I am sure that, like me, most of you understand and are supportive of the general concept of the smart economy. But, as an industry I also believe that we need the Government to provide much more tangible and ambitious policy objectives if we are to deliver on the smart economy aspiration.

“There has never been a greater need for a champion for all the aspects of the digital economy within Government going beyond simple broadband access and to deliver the necessary direction, political and financial support to the sector.

“Specifically, I would like the Government to consider how, in practical terms, it can encourage us as an industry to invest sooner – whether this is through investment incentives, innovative approaches to spectrum allocation and pricing, specific public subsidy for rural areas or encouragement in infrastructure sharing.

“At the very least, it should make clear its own commitment to greater use of communications technology to drive public sector productivity. Government must also be more ambitious and service for citizens. Ultimately, what we need is a Government that works proactively with us to help answer the big questions and address the challenges that we will inevitably face in the coming years.

“In return, we the industry will do our level best to deliver a viable future,” Donovan said.

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