Broadband subscribers ‘to reach 450,000 by Xmas’

16 Nov 2006

Ireland is likely to have seen 450,000 subscribers signed up for broadband by Christmas, ComReg commissioner John Doherty told He warned, however, that broadband providers need to reconsider their marketing messages in order to attract further growth.

“If it doesn’t come in at 450,000 it will come in at close to that. By that stage we will have built a critical mass that we can build on; we will have reached the tipping point,” Doherty said, pointing out that cable broadband providers alone are adding 1,000 new subscribers a week.

At the Commission for Communications Regulation conference in September, the regulator said that Ireland had 410,000 broadband subscribers.

Referring to recent announcements such as yesterday’s decision by Eircom to invest €1bn in bringing fibre to the kerb, which will result in speeds of 25MB per second, and last week’s announcement by BT that it was investing €500m in its next-generation network, Doherty said: “The challenge going forward is to keep this momentum going.”

Doherty said that it was vital for telecom operators like Eircom and BT to ensure their networks were capable of handling next-generation services like IPTV and video on demand.

“The paradigm is shifting and voice revenues are falling at a rate of between 8pc and 10pc a year. Fixed-line operators face significant challenges to their business for the future and in this respect bandwidth is vital. Investment is needed to build a business case that can meet that challenge.

“On the mobile front operators like Vodafone and O2 are readying their HSDPA (high-speed downlink packet access) services as a way of meeting this bandwidth challenge.

“For Ireland going forward the issue will be ensuring sufficient fibre supply and in particular ensuring fibre to the buildings. Because Ireland is one of the fastest-growing house-building countries in Europe there is a major opportunity, particularly in terms of apartment developments.

“The business paradigm is changing for telecom companies and new applications are driving the requirement for higher bandwidth. Operators have to start looking at upgrading their networks.”

Doherty said that there are now 20,000 unbundled broadband customers in Ireland at present but in order to accelerate this automation of local loop unbundling (LLU) is a priority. “Customers need to be able to have a slick process with no downtime or erosion of service to move between service providers and products in the market. A consumer may take bitstream today but may take a full suite of LLU service in time. Therefore there needs to be a migratory path as we are seeing in other markets around the world.”

He cited the UK market, which has been liberated for over 20 years, as an example of how fast things can happen once LLU really happens. “Up until recently they had proportionately as many local loops unbundled as we had. It is about providing consumers with choice. The customer needs to be able to take on different products. There is no doubt LLU has a role to play in boosting broadband subscribers. It is very difficult to envisage that if you’re working off a branded bitstream product on a 1MB circuit.”

Doherty added that in order to boost demand for broadband, operators would need to look at how they’re marketing broadband and stimulate interest. Citing Eircom’s latest TV campaign around broadband as a good example of what can be achieved, he said: “Until now operators have been just saying how broadband is ‘always on’, now they need to get across the message of what people can do with it. They need to bring to people’s attention what’s out there.

“On the supply side, I believe that there is now choice in the market and prices are a lot more competitive at around €20 a month on average compared with €132 a month back in 2003. Now I think the objective should be to stimulate demand and help people understand the benefits of broadband,” Doherty concluded.

By John Kennedy