Report urges action over “dismal” broadband take-up

2 Nov 2004

Ireland’s broadband adoption to date has been “dismal”, a report from a leading European telecoms analyst firm has claimed. According to Current Analysis, the Irish telecoms market lags in several key areas including fast internet access, despite recent progress on issues such as single billing.

Competition on voice calls has improved as there are now 40 authorised operators in the market, rivalling the incumbent Eircom. Adoption of fast internet access, however, remains a challenge. Although 46pc of the population uses the internet at home, more than 80pc of this number still uses dialup. Moreover, by June of this year Ireland had just 55,000 DSL lines and 5,380 cable modems out of a population of 1.5 million households.

In addition, consumers are currently being asked to pay above the odds for broadband, the report said. Sandra O’Boyle of Current Analysis, who wrote the report, commented: “Despite special offers from Eircom and other operators, the €35 to €40 monthly broadband fee is still too high and a turn-off for consumers that are happy enough to pay less than half that amount for flat rate dial-up access.”

According to O’Boyle, internet usage tends to increase once users experience broadband, “but it’s getting them to try it that remains a challenge”. She cited the difference between the Irish and UK broadband markets where entry-level broadband packages are available from €25 per month. Even leaving price considerations aside, availability of DSL in Ireland remains an issue, added to poor line quality on many lines, O’Boyle said. However, wireless broadband and technologies such as WiMax will help redress this to some extent, she added.

Broadband providers need to offer additional services to attract consumers, the report recommended. “Irish customers need other good reasons for paying for broadband, such as bundled voice-over DSL for cheaper voice calls or being able to watch films and TV football games over broadband,” the report said.

To encourage investment and service innovation from other operators – which in turn will have the effect of spurring on Eircom – there is a need for real infrastructure competition in the local access market, the report said. Ireland has the second lowest record on local loop unbundling in Europe with more than 2,500 lines unbundled to date. Current Analysis urged hte Commission for Communications Regulation to tackle the problem by pushing for lower prices.

The issue has been fraught with difficulty before. ComReg has set out its intention to lower the LLU price from 1 December this year to €14.65 per month, down from the 2001 level of €16.81. When the regulator made the announcement at the end of the summer, critics still considered it too high and one lobby group urged the Government to intervene and lower the price further.

By Gordon Smith