Ireland’s next-gen networks debate – too much rhetoric!

11 Nov 2010

Next-generation networks are vital for attracting foreign investment, serving citizens and reforming public services, but there’s too much rhetoric and little action, railed BT Ireland CEO Graham Sutherland, who said profits are up 14pc at the all-Ireland firm.

In its results for its all-Ireland operation for the half year to 30 September 2010, underlying revenues, excluding foreign exchange movement, were impacted by challenging market conditions and declined by 4pc to stg£373.6m.

EBIDTA (earnings before interest and taxes) increased by 14pc year on year as a result of cost-management programmes and the successful delivery of large retail and wholesale contracts.

Gross managed costs, excluding capital expenditure, reduced by 14pc, reflecting improved supplier management, property rationalisation and labour efficiencies.

“We are making strong progress,” Sutherland said. “Revenues remain under pressure because of the challenging economic conditions, but by investing where our customers want us to invest and innovate we are securing a healthy volume of contracts with business, government and wholesale customers.

“We have had double-digit percentage profit growth for the fourth consecutive year, driven by our relentless focus on both cost transformation and the successful delivery of our contracts with Irish and international organisations.”

The NGN debate

Sutherland hit out at the time wasting in the Irish economy around next-generation networks, arguing there’s too much talk but little real action.

“There is a lot of rhetoric at present in Ireland around next-generation networks. These advanced networks are essential for consumers and businesses, for attracting foreign direct investment, for e-government services and so on.

“A competitive market, backed up by clear and consistent pro-competition policies set by the State, promotes investment and innovation by the private sector. Competition is having a positive effect in this market, as evidenced by the increased choice for consumers and businesses, and as such we are looking to further expand our fibre network into urban and rural locations.”

During the half year, BT made good progress in the business and government sectors, securing significant new contracts while delivering existing large managed services projects.

This progress was driven by the investment that the company could make as a result of its solid financial position, and its unique capability to provide both network services and IT services.

In the six months, contracts signed included data hosting services for eBay; domestic and international network services for VHI Healthcare, Danske Bank, Glanbia, PineBridge Investments and video-conferencing services for Element Six.

A key business highlight in the half year was the successful implementation of the State’s Emergency Call Answering Service, in which BT has invested more than €10m.

Network services

A strong performance by the company’s wholesale division impacted positively on revenue generation in the six months, with the company delivering network services for a substantial number of communications companies in the Irish market including 3 Ireland, Telefonica O2 Ireland, UPC and Vodafone Ireland.

To support this growth, the company’s investment programme focused primarily on advancing the BT network across Ireland using a mix of technologies.

The company has unbundled 41 telephone exchanges, delivering up to 24Mbps broadband capability to more than 500,000 active consumer and business lines throughout the country, with future investment over the second half of the year in a further 19 exchanges, growing that footprint to more than 700,000 phone lines.

Some 150 Ethernet nodes (Etherflow) have been built by BT in both urban and provincial locations, bringing speeds of up to 10Gbps to wholesale and retail customers to deal with the bandwidth explosion in the market.

The company strengthened its position in cloud services with the introduction of two new services into the market – Virtual Data Centre and Next Generation Contact Centre – which are sold on a “pay per use” basis, helping Irish organisations avoid the need for upfront investments in infrastructure and reducing total cost of ownership by 40pc.

BT was also recently ranked as the No 1 reseller of IT in the Irish market, deploying technologies from Avaya, Cisco, EMC, HP, VMware and Microsoft, and in the services and solutions it provides to its customers.

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