The digital imperative

29 Sep 2011

Only 22pc of Irish firms use e-commerce, despite people now preferring shopping online

Quality broadband coverage should be a national priority in these tough times. Crucially, governments around the world are beginning to realise this, too.

Monday’s news that Twitter is to establish international offices in Dublin lightened everybody’s mood. IDA Ireland chief executive Barry O’Leary pointed out that Ireland now has scooped nine out of 10 of the major internet businesses that were born on the internet in the last decade, if you include firms like Google, Facebook, Zynga and LinkedIn, amongst others.

At the heart of this, as 200 new jobs were also announced this week for Galway as EA Games’ BioWare brings out a new online game Star Wars: The Old Republic, is the emerging global digital economy.

Stirring stuff for sure, but it is the businesses that weren’t born on the internet – and the firms outside of the 22pc of SMEs in this country that actually engage in e-commerce – that we need to be concerned about. The key is broadband.

Irish firms, if they are to survive the recession and have a future, need to be where their customers are. Those customers are most likely online and, in the absence of Irish firms trading online, are most likely buying online from firms in the UK, Europe and the US.

But it’s not only the businesses, if you don’t have a reasonable broadband connection it is unlikely you would be able to apply for a job, for example.

Communications Minister Pat Rabbitte, TD, is leading a Next Generation Broadband Taskforce consisting of many of the top telecoms CEOs that has so far met twice this year. A study last year by Analysys Mason estimates that it will cost €2.5bn to roll out the country’s next-generation broadband infrastructure.

The one thing Ireland needs to avoid is resting on its laurels of having basic broadband accessible across 99pc of the country. The real issue is quality of connection, no longer basic access.

Ireland’s broadband speeds compared with rest of EU

Ireland’s broadband speeds are improving but only very slowly, and download speeds compared with our EU competitor countries have actually dropped, according to the latest Ookla Netindex and IrelandOffline.

In Q3 2011, Ireland was 72nd in the world for upload speeds and 24th out of 27 in the EU. Ireland is 45th in the world for download speeds and 23rd out of EU-27. The country is 34th in the world for broadband quality and 18 out of the EU-25, while the country is 52nd in the world for delivery on ‘promised’ speeds and 23rd out of the EU-27.

At a UN meeting of telecoms regulators involving 192 countries, held in Columbia last week, it was agreed that improved “smart” regulation to encourage the use of incentives to boost broadband coverage will be necessary to create a spirit of openness among providers who have to share the investment.

International Telecommunications Union (ITU) bureau director Brahima Sanou said the telecoms sector and ICT are at the centre of the digital economy, but he stressed that more needs to be done to connect the unconnected, increase digital literacy and ensure developing countries are not excluded.


US: Investing more than $15.5bn over the next decade from a universal service fund to ensure every citizen has broadband. At least 100m US homes should have affordable access to actual download speeds of at least 100Mbps.

EU: The EU’s Digital Agenda has set a target for 2020 to have internet speeds of 30Mbps or higher for all European citizens.

Northern Ireland: By 2012, 90pc of homes in Northern Ireland will have connected to fibre broadband, making it the most connected geographic area in Western Europe.

Australia: AUS$40bn investment to fibre connect the entire country.

The recent 2011 Cisco Connected World Technology Report revealed that one out of every three college students and employees surveyed globally believes the internet is a fundamental resource for the human race – as important as air, water, food and shelter. If forced to make choice between one or the other, the majority of college students globally (64pc) would choose an internet connection instead of a car.

It is clear that without telecom industry and Government collaboration, Ireland will not get the digital infrastructure it needs.

By next year, 90pc of homes in Northern Ireland will be connected to fibre broadband, making it the most-connected geographic area in western Europe. BT is currently building a Total Transmission Network, which involves an advanced next-gen fibre network in the Republic being rolled out.

Former BT Ireland CEO and newly appointed head of BT Business in the UK, Graham Sutherland says the effects on businesses that get access to higher broadband speeds are palpable. “We’re seeing more innovation coming from small businesses that have access to very high speed broadband who’ve moved from the 2 or 3Mbps speed to 30Mbps-plus.”

He says the same should be possible in the Republic.

“It can be done. All the right people are at the table and the potential is there to do this relatively quickly if we can get a common approach to it.”

Vodafone in Ireland CEO Jeroen Hoencamp asserts that the Irish Government is determined to get to grips with the opportunity. “Minister Rabbitte has been very clear that this is one of the biggest priorities for him in the telecoms space.

“He [Rabbitte] agrees that it is much better for the public and private sectors to work together in finding a model instead of just throwing it to the private sector or keeping it in the public sector.”

Hoencamp says the key will be “smart” regulation. “The Government can help by facilitating all players in the market with practical things like making it easier to put fibre into the ground.”

Cisco Ireland country manager Mary Lou Nolan welcomes the coming together of industry and Government but she wants to see faster progress. “Digital technology is needed to create smarter conversations between governments, citizens and businesses and that gives us a truly joined-up nation – that will make us a more productive nation.

“Citizens should be able to achieve more online such as applying for jobs, or paying their taxes, and will less likely to have to travel to achieve the same outcomes. Doing things faster with less travel makes us more productive and greener. I think there’s probably some ways to go to have that there across Ireland because we do have a difference in broadband quality and service from an urban and rural perspective.”

Pointing to the obvious need to invest in critical digital infrastructure Intel country manager Eamonn Sinnott poses the question: “Wouldn’t it be fantastic if every person in this country, regardless of their means or location, had full access to the world’s knowledge?

“The internet is the repository of the world’s knowledge. For people not to have that means we don’t have the capacity to be a key player in the digital economy.

“Putting the right infrastructure in place would give us a fantastic advantage and ties in very nicely with the Government’s agenda to be the best small country in the world to do business by 2016,” Sinnott says.

Ireland’s tech leaders will discuss Ireland’s digital future at The Digital Ireland Forum tomorrow, 30 September.

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