Vern Kennedy steps down as Magnet CEO

24 Oct 2007

After less than a year in the job, Magnet CEO Vern Kennedy is heading back to the States to focus on a business opportunity that Magnet owner Columbia Ventures Corporation also holds a stake in.

Kennedy, who became CEO last January, will be replaced by Magnet chief financial officer Mark Kellett who also previously held the role of group finance officer with Yahoo! Europe.

Kennedy brought an impressive track record to bear having run successful broadband companies in the US and while at the helm of Magnet decided to focus the company’s energies on the business segment of the DSL market rather than the consumer market.

He was an outspoken critic of the monopolistic and regulatory morass that has impeded the spread of broadband in Ireland and at a recent telecoms conference said that “if Irish telecoms was a horse it would have been taken out and shot long ago”.

It is understood that he will return to the US to manage his company Screen PC, which Kellett described to as a “disruptive force in accessing the web, everything that Magnet should be”.

Kellett explained that Kennedy’s tenure with Magnet was always envisaged as short-term and that his decision to go back to the States was entirely business focused rather than from frustration at the slow pace of change in Irish telecoms.

“I have known of this for about five months so it’s not an overnight decision. Vern believes Screen PC is at an embryonic stage of growth and he believes it needs 100pc concentration.”

Kellett joined Magnet from Yahoo! in January and aims to continue where Kennedy left off in aiming to make Magnet a disruptive force in the Irish telecoms market.

He shares Kennedy’s disdain for the lack of priority given to broadband infrastructure in Ireland. “Broadband is a critical infrastructure. I emigrated to the UK at the time when the M50 was being built and people said then that it was the jewel in Ireland’s crown and we didn’t need more road capacity. But now the M50 is a farce.

“I look at the M50 debacle in the same light as broadband is currently being treated. We say now ‘if only we built the right infrastructure.’ The Government and regulatory bodies are not viewing broadband with the seriousness it deserves.

“The Irish economy relies too much on construction and agriculture and only talks about the knowledge economy. We need to urgently put in place the right telecoms infrastructure if we are serious about putting this economy back on its feet.”

Kellett said that the tendency in Ireland is to allow market forces to decide matters. “We let that happen in the aviation sector and look what happened to the Shannon-Heathrow route!”

He also said that the definition of broadband needs to move to real broadband levels and that people who are receiving what they think is 1Mbps (megabit per second) broadband are being fooled. “We called it fraudband. People are being offered packages of 1Mbps for €6.99 [a month] but these products are no better than dial-up in real terms. There has to be an honest reassessment.”

When Kennedy joined Magnet in February this year he announced that the company was increasing its capital expenditure in the Irish market by €25m on top of the €45m spent on unbundling 40 exchanges around Ireland.

Kellett said the company’s aim is to stick to this plan and “optimise” investment in existing infrastructure. “We have to as a business look at how we maximise the opportunity for Magnet.”

He said the aim is to harness the trans-Atlantic fibre capability of Magnet’s sister company Hibernia Atlantic to increase Magnet’s offering to the corporate space as well as create more compelling services for SMEs.

He also said the company is mulling over opportunities to expand into the Northern Ireland market where broadband availability has gone beyond 100pc.

“We’re considering an all-Ireland approach. It’s something we need to assess in terms of whether it’s a market we can attack with the current set of products or whether we can we go at it from a fibre perspective. The economic situation has moved on and this is an all-Ireland market. Borders are coming down and we need to look at how we can service the market in its entirety.

“Our aim is also to become a pre-eminent supplier of telecoms services to SME and corporate customers, but also to provide high-end consumer services beyond fibre to the kerb but fibre to the home and services like video-on-demand.

“We see massive opportunities in this area in terms of the delivery of content,” Kellett said.

By John Kennedy