Forfás urges response on Ireland’s broadband deficit

29 Nov 2004

Ireland currently has a broadband deficit of 360,000 connections and must meet and double this target by 2007 in order to remain competitive, a new report has urged. Since last year, Ireland has fallen further behind the average and leading countries to which it is most often compared, the report found.

The latest Forfás Broadband Telecommunications Benchmarking report, released today, assesses Ireland’s competitiveness in relation to 21 countries and presents an update of progress over the past 12 months, as well as setting out recommended actions for 2005.

In order to catch up by 2007, Ireland needs to overturn the deficit of 360,000 broadband connections. Given the additional growth other countries are expected to experience during that period, the report also recommended that another 370,000 lines are also required, bringing the total to more than 700,000 connections.

The report noted some positive developments in the past year, including rapid DSL growth since November 2003. DSL take-up by population now stands at more than 2pc. DSL coverage has increased to 81pc although there are acknowledged issues with line failures that operators plan to address in 2005. The cost of basic DSL services has “dramatically improved”, the report found and Ireland is now amongst the most competitive countries for residential and small business DSL customers.

However, other countries are in a position to offer a greater quality and choice of services due to the level of competition. There are also viable alternatives to DSL as a means of providing broadband, particularly cable; but these are not as well exploited in Ireland as elsewhere. As a result, Ireland continues to compare poorly for overall take-up of broadband – comprising DSL, cable, fibre – to the home.

The reasons for Ireland’s slippage and poor relative broadband performance are twofold: the lack of real growth in competing technologies and the lack of competition and innovation within the DSL market.

The report recommends a series of actions to combat this performance: to spur growth in technologies other than DSL, Forfás has called for a reduction in the high charges involved in rolling out infrastructure by cable and telecoms operators; it suggests that the telecoms regulators review broadband spectrum usage with the objective of encouraging operators to maximise the use of spectrum resources when delivering broadband services. This could include freeing up spectrum for WiMax technologies in order to increase the range and penetration of wireless services enabling them to be more competitive with DSL.

In addition, the Department of Communications, Marine and Natural Resources should update the Wireless Telegraphy Act, 1926, as a matter of urgency as this would allow innovative access to the radio spectrum, making wireless investments more financially viable.

To tackle the competition issue, Forfás has recommended that the Commission for Communications Regulation continue to put pressure on Eircom to reduce its local-loop unbundling charges further, as this would allow other companies to access local exchanges and provide innovative services.

By Gordon Smith