New entrants to Irish broadband market will drive down prices, says ComReg

2 Jan 2013

New entrants to Ireland’s broadband market – which is hurtling in the direction of superfast broadband and 4G services – will increase downward pressure on prices and upward pressure on quality and bundles, ComReg chairman Alex Chisholm said.

Chisholm said that at the end of the third quarter of 2012, there were 1.6m broadband subscribers in Ireland, a 0.4pc increase year-on-year and total broadband per capita stood at 36.1pc. 

Household penetration of broadband stands at 65pc compared with an EU average of 65pc, just behind the EU average of 68pc.

The share of residential broadband users with speeds of 10Mbps or more has tripled in the last two years to reach 23pc.

There is room for improvement in terms of speed and quality. Ireland is 15th in the world and ninth in Europe when it comes to speeds, according to the most recent Akamai report.

Opportunities on the horizon for this picture to improve include the arrival of 4G in the coming months – following a lucrative €855m spectrum auction – and new bundled superfast broadband packages as competition intensifies between Eircom and UPC.

This pressure will be augmented no doubt by the capabilities of 4G services in built-up urban areas where speeds of between 60Mbps and (dare I say it) more than 150Mbps have been promised by enthusiastic mobile operators.

When Sky arrives in Ireland’s broadband market …

Then there is also the arrival of Sky’s broadband services in the Irish market to consider. Neither Eircom or UPC will be enthusiastic about this development. As part of a major deal with BT, Sky will launch its Broadband and Talk services in a move that will lead to 900 jobs in Dublin.

It clearly means business. Sky currently serves 10.5m homes across Ireland and the UK with TV services, including 3D TV, HD TV, mobile apps and on-demand content.

In his end-of-year statement, Chisholm said: “There have been a number of positive signs of progress over the year with strong competitive forces and consumer emphasis on value putting downward pressure on prices, and upward pressure on quality and coverage levels, particularly for the increasingly popular ‘bundles’ of telephony, broadband and television services. ComReg’s regulatory interventions in relation to wholesale broadband services have helped to stimulate competitive pressures.

“Expected new entry to the market early next year will intensify these pressures, as will the further build-out of high-speed broadband networks announced by operators in recent months,” Chisholm said.

ComReg’s hands will be full in 2013, ensuring that new entrants like Sky, as well as existing players, can access the local loop with exciting new fibre-to-the-kerb bundles based on VDSL and that Eircom sticks to its promise to ‘reform wholesale’.

Ultimately the real winner here will be the Irish business owner or consumer who may finally get the prices and speeds enjoyed elsewhere in Europe. Fingers crossed.

Broadband market ignition image via Shutterstock

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