Telecoms industry will struggle to meet Digital Agenda targets

13 Oct 2010

Ireland’s telecoms sector will need to be able to invest an additional €300m per annum in telecoms infrastructure if it is to get close to EU Commissioner Neelie Kroes’ target of 30Mbps broadband for all citizens and 100Mbps for half of citizens.

Speaking at TIF’s annual conference in Dublin yesterday, Vodafone Ireland’s strategy director Gerry Fahy, who is also vice-chairman of TIF, said that Analysys’ study into next-generation access (NGA) rollout would be in and around €2.6bn.

This would be the cost of a ubiquitous next-generation national network that would be a mesh of fibre, LTE, fixed wireless and other forms of connectivity.

Investment levels by Irish telecoms providers have fallen from €700m per annum to less than €500m in the past two years.

Achieving the Digital Agenda target

“To achieve this target on top of what the industry is currently investing we would need to ramp investment up by a further €1.5bn.

“In order to make such an investment the business case would have to exist but according to Analysys’ study, consumers are happy to pay what they’re paying today only for higher speeds.

“No single company can take this risk so that’s why a collaborative industry model is being called for.

“There is a deep, shared belief among industry players of the benefits to the economy as a whole and not just investors. But it is a different business model that we’ll need to get our heads around.”

Fahy said that despite the economic situation, at a time when jobs are scarce, the telecoms sector is delivering 5,000 new jobs per annum and is well placed to serve the country.

“The issue for our industry is less about costs overall, but the complexity involved in players working together.

“It is not only investment, we need a policy framework. Net neutrality is important. There’s a lot the Government can do to make the infrastructure rollout possible. For example, the varied approach by local authorities to projects is causing a great risk to investment.”

He said that while the likelihood of early release of 800Mhz wireless spectrum and the planned analogue TV switch off in 2012 are welcome news, execution is vital.

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