First Tuesday calls time on telcos

14 Feb 2003

Eircom and representatives of Fianna Fáil declined the offer to attend this week’s First Tuesday forum on telecommunications, presumably because they could smell their own blood.

So the crowd that turned up was pretty much left with the opposition opinion – politically and commercially – with the absent friends inadvertently setting much of the agenda.

The spiky presence of Sean Bolger ensured that it didn’t descend into a mumbled session of moans and groans. Best known as the former CEO of Cellular 3, the company that bought bulk airtime off Eircell until the operator successfully won a legal battle to stop the firm selling it on cheaper, Bolger has a new venture albeit with a familiar agenda. He still wants to take on the big boys.

Also marking a return to the Irish telco fray was ESB’s communications general manager John McSweeney. His company has just launched its southern loop fibre network and is looking for wholesale customers. Previous ESB activity in the communications sector included a stint as co-owners of communications company Ocean. Before that it was part of a consortium that made an unsuccessful bid for that controversial 2G licence.

Product director Peter Evans (pictured) was the voice of Esat BT, while David Long came as close to anyone to the voice of the people. His lobby group, IrelandOffline, has been more vociferous than most in calls for fixed-rate internet access and cheaper broadband.

The main political voice from the Opposition came from Denis Naughten Fine Gael (FG) spokesperson on transport, a last minute stand-in for Phil Hogan, FG representative on enterprise.

Bolger began with an argument that the local technology recession was a natural extension of government policy. “If we encourage multinationals to come to our country and we depend on them for our future, we will suffer more in a downturn,” he reasoned. “There aren’t any strong telecom players here and that’s caused a serious drop in competition.”

He continued: “Most international telcos are subsidiaries of major multinationals and whether we like it or not Manchester is as important to them as Ireland.” A sentiment that would receive an unlikely echo from Roy Keane the very next day.

Esat BT’s Evans didn’t rise to defend his company’s position in Ireland, preferring to claim that the state of competition was not that bad citing OECD figures that ranked Ireland reasonably high. He did, however, agree that there was a lack of competition in local loop unbundling – the notorious ‘last mile’ between customer and fibre network. Although Esat BT has now been allowed into 40 local exchanges and is rolling out an asymmetric digital subscriber line (ADSL) service, it had happened at a painfully slow pace that has damaged Ireland’s standing, according to Evans.

“There are issues on cost that we’re fighting on a daily basis with ComReg [the Commission for Communications Regulation],” said Evans. “The reason we’ve fallen behind is because of the fight between ComReg and Eircom on the wholesale pricing of ADSL. Unless we move faster we are going to continue to fall behind.”

The lack of competition in a deregulated market was the big theme of the evening. “The competition for home users and SMEs [small to medium-sized enterprises] has been ‘pseudo competition’ and it has not been about pushing prices down,” said Long.

Both Long and McSweeney cited the failure of cable companies to grow the market as a core problem, especially as the sector in Ireland had once been ahead of its time.

“The extraordinary price NTL paid for Cablelink, the subsequent cost of rolling out a network and the cancellation of digital TV by RTÉ were some of many factors that took us from a leadership position to a struggling position,” said McSweeney. “It looks as if the cable side was overlooked at government level,” added Long. “In the UK market, the cable operators are hammering BT with broadband take up.”

Evans concurred, pointing out that the two leading cable operators have more combined ADSL customers than BT.

Whatever about the past, attention gradually turned to the future and how we were going to drag ourselves back into the race. The current 19-town fibre ring initiative was largely perceived as a way forward, but not by Bolger. “The Government got it wrong putting so much money into more fibre,” he said. “We need broadband today and wireless can deliver it. It’s not about digging up more roads and taking 18 months to lay it.”

It will come as little surprise to discover that Access Telecom, Bolger’s new venture, is currently building a fixed wireless network around Dublin. But McSweeney also saw a role for wireless: “We will have to rely on it to get to more remote areas. I do not believe it is feasible or cost-effective to bring fibre to the home. We have to find other technologies to that.”

McSweeney went further, putting technology in context by alluding to a serious consequence of becoming a laggard rather than a leader. “Our problem is not the technology, it’s the application and the education. We need to stimulate both of those to make it sensible for operators to offer very cheap broadband.”

He continued: “It frightens the life out of me because if we don’t get our population totally competent in the use of technology, we’re going to fall a long way behind. Unless you educate people and look at the applications you won’t stimulate the demand to generate the revenues that operators so badly need.”

At an evening that set out to analyse the progress of the Irish communications industry from now until 2006, there was seemingly some hope to be gleaned from wireless and possibly the metropolitan fibre networks. But there were still enough concerns and uncertainty to suggest that it’s going to be a very long journey before we get it right.
By Ian Campbell