Internet price wars begin as Imagine unveils its WiMax challenge

8 Nov 2009

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Ireland’s first WiMax operator Imagine – bolstered by a US$100-million investment by Intel and Motorola – has unveiled its prices that it claims will undercut those of incumbent Eircom by 50pc.

Imagine is offering quality WiMax broadband and phone packages to Irish families from just €25 per month, which is more than 50pc less expensive than Eircom’s equivalent prices. This service includes unlimited calls to all fixed lines in the 32 Irish counties and to all fixed lines throughout the UK – at any time.

The WiMax network will also give laptop/PC users at home and on the move access to a mobile-broadband dongle, available from €5 per month.

The package prices

The company is offering 1Mbps, 3Mbps and 7Mbps broadband-only packages for €25, €30 and €35, which compare with Eircom’s prices of €50.56, €55.58 and €65.46 respectively. These, Imagine said, result in savings of 51pc, 46pc and 47pc respectively.

Imagine’s 1Mbps broadband bundles, which include Talk Off Peak and Talk Anytime, cost €30 and €35 respectively. Its 3Mbps bundle costs €35 and €40 respectively and the 7Mbps service will cost €40 and €45 respectively, resulting in average savings against Eircom’s competing product of between 30pc and 36pc across the range.

The mobile dongle add-on package will cost €5 for 7Mbps users. For users who want to go mobile, only the dongle will cost €10 and €15 for 3Mbps and 7Mbps users, which may create a price battle against 3G mobile operators, who charge at least €19.99 for their dongles.

WiMax commercial rollout

Imagine has begun its commercial rollout of WiMax in selected areas in and around Dublin. The first phase of the rollout is covering 250,000 homes in Dublin, Wexford and Sligo and will be completed by mid-December 2009.

“The new network will not be restricted to high-population areas, but will also be rolled out to smaller towns and rural communities at a rate of 15 new WiMax areas per month. This is great news for millions of Irish customers that are currently paying €25.47 every month to rent a basic line from Eircom,” said Imagine’s CEO Sean Bolger.

“Imagine will eliminate that cost entirely for customers when they switch to the Imagine WiMax service,” Bolger added.

Bolger’s Imagine Group bought Irish Broadband last year for €47 million. Ireland’s first WiMax service relies on the 3.5GHz spectrum.

Each WiMax base station would give Wi-Fi-like coverage of 8Mbps up to 40Mbps and higher over distances of 1.5km in urban areas and 9km in rural areas.

Coverage

Brian O’Donohoe, managing director of Imagine, recently explained to Siliconrepublic.com that ComReg has granted the company more than 90MHz worth of 3.5MHz spectrum licences, which will allow it to cover much of the country. Imagine plans to use its WiMax service alongside NTR’s nationwide fibre network.

“We aim to provide high-quality broadband to people who are fed up getting bad DSL or who are tired of using 3G dongles for home broadband. We are also looking at opening the service up as a wholesale offering to other telecoms firms that want to sell broadband,” he added.

Bolger has been a considerable force in Irish telecoms over the past 15 years. He set up International Telecommunications Limited in Dun Laoghaire in 1994, which was then bought by Norwegian firm Netsource, but Bolger continued to manage the organisation.

GTS acquisition

GTS acquired Netsource in the late 1990s for US$253 million, leaving Bolger with a tidy US$19 million profit. Bolger was the first mobile virtual-network operator (MVNO) in the country with Cellular 3, but was forced out of the business by Eircell via a High Court action after Cellular 3 became too successful too quickly.

Bolger envisages that Imagine’s foray into WiMax broadband will result in 200 new jobs over the next two years.

The move to WiMax will be given added impetus in the coming two years when Intel begins manufacturing PCs with WiMax chips inside, hoping to score a similar coup with WiMax as its Centrino chip did with Wi-Fi.

By John Kennedy

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com