Fibre plan needed to support further FDI growth

28 May 2010

Ireland’s success in winning major foreign direct investment (FDI) projects must not be undermined by ongoing fibre infrastructure problems, the chairman of ALTO Ronan Lupton told

Lupton said that his members, including companies like COLT, BT and Verizon have large multinational customers they are trying to attract into the market.

Parallel to this, Ireland’s inward investment body IDA Ireland is achieving stellar success in attracting investments such as EA Games, which is creating 200 new jobs in Galway, Webroot, which is creating 50 high quality jobs in Dublin and SAP/Business Objects which is creating 75 new jobs in Dublin.

Lupton said it is critical that the momentum achieved by the passing of legislation that amends Part 5 of the Communications (Regulation) Act 2002 be sustained and that the National Roads Authority urgently facilitates access to fibre ducts under Irish motorways. He also said the One Stop Shop proposed by Communications Minister Eamon Ryan TD opens for business.

“The Government can provide access to State fibre infrastructure without too much investment.”

The problem is the impact lack of access to fibre on the ground is having on businesses. He cited one large multinational in Cork employing 2,000 that was looking to expand access.

“The nearest ducting was full and the cost of digging and expanding would have been almost €900,000.”

Aside from the FDI companies, Lupton said that it is fundamental that fibre assets are opened up to help indigenous companies achieve international exports.

“This requires execution and vision by the Government. Access to State fibre is underutilised. Open this up and it would support FDI and indigenous firms enormously,” Lupton said.

In related news, ALTO, in reaction to the latest ECTA regulatory scorecard which gauges telecom regulation in 22 European countries, has called for Eircom to separate its services and create a more open market.

“We are urging that the new EU communications framework be transposed into law immediately and that ComReg uses the power it grants to functionally separate Eircom,” Lupton said.

The new EU communications reforms agreed last November by the Council of Telecoms ministers and the European Parliament will give greater powers and independence to regional regulators such as ComReg. The separation of BT in the UK resulted in a much more open market with the amount of unbundled lines growing from 100,000 to 5.5 million lines within three years.

Mobile broadband usage

The scorecard notes the high prevalence of mobile broadband in Ireland, with the EU Commission revealing this week in its own report on the state of European telecoms markets that Ireland is using twice the European average of mobile broadband at 10.5pc compared to the scorecard’s top performer, The Netherlands’ 1.5pc. 

ALTO warns against allowing the Irish broadband market to become reliant on mobile as the technology offers internet speeds far lower than what is needed for business and even for next-generation domestic use.

“Mobile is naturally cheaper as there is no incumbent monopoly in place but it is a poorer performing technology with ComReg revealing last week that the average user suffers speeds of only 607Kps to 1.69Mbps. By encouraging investment in faster fixed-line technologies through better market conditions, we can benefit from the network we need.” said Lupton.

Infrastructure investment

The scorecard found that the effectiveness of regulation still varies significantly across Europe and that the actions of the regulator have a strong influence on the development of high-speed broadband, a key objective of the EU 2020 Strategy.

The report also highlights how the competitiveness of multi-national European firms is being undermined by the variations in regulation, which push up the cost of building networks across Europe.

“There is a direct correlation between creating an open telecoms market and investment in our communications infrastructure,” added Lupton

By John Kennedy

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