Irish broadband market to be boosted by LLU breakthrough

9 Feb 2010

The adoption of LLU in Ireland by Eircom’s competitors has been negligible to date and Ireland compares unfavourably with most other European countries in this respect, Comreg has said.

The existing price for LLU in Ireland is €16.43 and is the highest charge in Europe. The average LLU price across other European countries is about €9.28.

ComReg said it believes that the current LLU price has acted as a major barrier to competition in LLU-based broadband in Ireland and needs to be amended.

The local loop is the final part of Eircom‟s access network that provides access into homes and businesses. It runs between the local exchange and a home or premises, usually via a street side cabinet. It is sometimes also known as “the last mile” and is used to provide voice telephony and broadband services to end users.

Communications Minister Eamon Ryan today welcomed ComReg’s decision on the pricing of Eircom’s full Local Loop Unbundling (LLU) wholesale product. He said the latest regulatory decision is a significant development and, along with clear Government policy on competition and open access, is facilitating Ireland’s evolution to next-generation networks.

The decision on LLU pricing sets a LLU rental charge of €12.41 and a maximum Sub-Loop Unbundling (SLU) rental charge of €10.53 for access to its local loop network.

Ryan said an affordable, economically viable LLU product is critical to effective and sustainable competition in the electronic communications sector.

Benefit of local loop unbundling

“This is a welcome decision,” Ryan said. “The unbundling of the local loop will result in higher speeds and, along with the recent Line Share agreement, will be crucial in the move to next-generation networks.

“It is good news for broadband users who can expect more choice when it comes to service provision, lower prices and better quality products.

“The decision is further good news for DSL service providers whose ability to compete will be enhanced. I also believe that it is good news for Eircom. The wholesale broadband market presents a significant market opportunity for Eircom and I have no doubt that they will, in collaboration with their wholesale customers, make the most of it.”

Ronan Lupton, chairman of ALTO, said the price move has the potential for enhancing consumer and business confidence in the communications market.

“LLU offers enormous potential to lift high-speed broadband in Ireland and provides a glide path to next-generation services,” Lupton explained. “To date, the opportunity has been frustrated with only some 3pc of lines being unbundled in Ireland compared with nearly 40pc in European countries that Ireland Inc should be competing with.

“The cost of LLU has been a major stumbling block in the provisioning of high speed and quality broadband services to Irish businesses and consumers.”

But Lupton warned that while this reduction is welcome and will benefit both sectors, it still does not go far enough.

“The cost of an operator in Ireland to offer enhanced LLU services is still 25pc more expensive than in the rest of Europe,” Lupton said.

A pioneer of super-fast broadband in Ireland, Magnet Networks has 40 unbundled exchanges nationwide, more than any other operator in the Irish market to date. CEO Mark Kellett welcomes the news but is cautious.

“After many years of delay and frustration with the lack of regulatory reform of the Irish telecoms sector, we are finally starting to see some positive movement,” says Kellett.

“Magnet welcomes this decision by ComReg.  However, we will await to see if Eircom challenge the decision or if  it will adopt a new approach of engagement that focuses on progress and not procrastination.”
By John Kennedy

Photo: Communications Minister Eamon Ryan

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