In his look back on the week, Siliconrepublic.com editor John Kennedy argues that Ireland needs to get its act together on communications infrastructure to ensure economic relevance in the years ahead.
With a new Government in place, it is vital we don’t let the subject slide in the face of the mounting economic challenges.
I got quite excited last week about two developments in the telecommunications industry that encouraged me to believe we are beginning to focus on the next-generation networks the country needs. These are not silver bullets but signs the industry is aligning its efforts in the right direction.
The first was Vodafone’s acquisition of Interfusion for an undisclosed sum. The move gives Vodafone access to the right capabilities to combine the various elements of what a future NGN would look like – copper, fibre, wireless, satellite and whatever else – because a future NGN will not be truly fibre based, but a mix of various technologies linked intelligently.
The second was Eircom and O2’s infrastructure sharing agreement. This is vital because it has been pointed out again and again that the industry will need to work together and collaborate and share infrastructure to reach every part of the country with high-speed broadband services. Mobile operator 3 is also understood to be on the cusp of unveiling a multi-million euro investment in its network.
While these are opening moves in the eventual move toward NGNs, the sad reality, however, is the road will be long. Last year, TIF and Analysys Mason revealed a study that estimated rolling out the next-generation broadband infrastructure Ireland needs to be economically viable and relevant in the 21st-century digital economy could be as high as €2.5bn.
Where this money will come from is anyone’s guess, but the most astute course of action would be to ensure that conditions are right to encourage such investment. This is where wise government and pioneering regulation come in.
Why do we need to make this investment?
Ask any telecom operator today what is on their mind and they’ll tell you: bandwidth! To rob a phrase from Magnet’s Mark Kellett, the world is facing a data tsunami. While much good work has been done establishing MANs around the country and connecting them to backhaul, not to mention considerable investment in mobile networks in the past few years and the gradual increase in copper speeds, the country isn’t at the starting gates yet when we think about what is happening elsewhere in terms of fibre and long term evolution (LTE).
For any economy to function, trade and win investment, state-of-the-art telecoms infrastructure is critical. You could argue we have two Irelands: one is the crown jewel of Europe in terms of the technology industry assembled here when you count in Google, HP, PayPal, Microsoft, Intel, Facebook and many others doing groundbreaking work here. Then you have the other Ireland, an Ireland where SMEs are going to the wall daily, where 23pc of SMEs with websites know how to transact via e-commerce and who are losing ground to UK and US competitors who are mastering the medium.
On this very island, a stg£2.5bn investment by BT in Northern Ireland’s fibre infrastructure will result in the region having one of the most advanced broadband networks in Europe by next year, and streets ahead of the under-invested broadband network in the Republic. It will mean the percentage of phone lines connected to a fibre-enabled cabinet will jump by 88pc.
Upon completion in March 2012, Northern Ireland will enjoy one of the densest and fastest broadband networks in the world and will have more fibre deployed by that point than France, Germany and Belgium.
In recent weeks, UK telecoms regulator Ofcom announced plans to launch the largest-ever auction of wireless spectrum in the UK – it will be equal to three-quarters of the mobile spectrum in use today and 80pc more than when the 3G auctions took place in 2000. Ofcom says it wants the benefits of 4G services to be available as soon as possible and wants to start the auction in the first quarter of 2012, following an industry-wide consultation.
Pioneering investments and visionary regulation guided by brave government decision-making is vital to ensure that Ireland emerges from the recession and can trade globally. A 21st-century nationwide network will be worth more to this country than any seaport, or airport, roadway or railway line in the years ahead.
In their programme for Government, the new coalition Government promised it would work to put fibre into 90pc of premises with the remainder connected by wireless.
This is a laudable target but the most likely outcome is a tapestry of different networks consisting of fibre, copper, wireless and satellite connected by state-of-the-art backhaul and managed by intelligent NGN infrastructure.
It is incumbent on the new Communications Minister Pat Rabbitte TD to ensure the conditions are right to enable operators to make the investment. Time is of the essence.
Last week, people made much of suggestions that a new TV licence regime may be instigated to capture into the net those people who watch TV over the internet, a kind of universal social charge for content. But one person rightly pointed out: how can you implement such a system when not everyone can get quality broadband, but any broadband at all?
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