Riding the cable card downturn


4 Mar 2003

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The 6th of May, 1999 was a red-letter day for Irish telecommunications. Anglo-American telecommunications giant NTL bought Cablelink for €680m, which at the time was jointly owned by RTÉ and Eircom, and promised to invest another €350m to upgrade the network and give its customers digital TV and high-speed internet access.

Meanwhile, Princes Holdings, partly owned by Independent News and Media, was quietly and without any fuss consolidating its position in the Irish cable TV market, acquiring networks throughout the country.

The promise was clear. The cable companies NTL and Chorus, as Princes Holdings was to brand its operation, would have their own local loops and would provide a viable alternative to the incumbent Eircom. Then it all went pear shaped. The bottom fell out of the worldwide telecommunications market. Credit dried up. Stock values fell and suddenly there was no money available to finance the necessary network upgrades. NTL even went into Chapter 11 bankruptcy protection from which it only recently emerged.

So are the cable companies still relevant in the modern business communications market?

“They are potentially rather than actually,” says Willie Fagan, managing director of Chorus. “The real difficulty to becoming a player involves upgrading cable from one-way coaxial to two-way. Ireland is one of the most cabled companies in Europe but the cable is ancient. There is upgraded cable in Dublin south west, Kilkenny, Clonmel, Thurles and about a quarter of Cork. Those areas can provide high-speed internet access and telephone.”

According to Fagan the real killer will be the triple play of television, internet and telephony. The problem, he says, is and will remain the cost of upgrading the cable.

“This is not such a problem in the UK where cable was installed more recently. According to our engineers the cabling you would need would by 550MHz and upwards. We have some 750MHz cable in our areas but the industry has reached an impasse that until companies can afford to start investing again it’s not going to happen. There are a lot of factors, mainly international ones relating to funding but there are others. We would have to be earning a better revenue stream, regulation would have to be a lot lighter particularly on the pricing front and of course there is competition from satellite,” Fagan says.

Fagan believes that cable companies like his own and NTL could play a part in connecting end users to the fibre backbones, which are currently being rolled out. However, he points out that there has to be a solid business rationale behind any such move.

Business products of NTL and Chorus

Chorus offers a variety of products in its areas. Powernet, for instance, is a high-speed internet connection that leverages the company’s wireless investment in the Limerick region. Starting at €101 per month plus €317 installation, customers can have a 256Kbps (kilobits per second) upstream and 1Mbps (megabits per second) upstream link.

Businesses in Thurles, Clonmel and Kilkenny can avail of Chorus’s Cablenet Broadband service. This costs €75 per month and gives download speeds of 512Kbps and upload speeds of 128Kbps.

NTL offers its business customers a number of different options. In the voice arena it offers a CPS (carrier pre-select) service as well as primary rate ISDN. For data traffic, it offers Dedicated Internet Access (DIA), Fibrelink and IP (internet protocol) Net and Frame relay products.

DIA involves an access circuit ranging from 64Kbps to 34Mbps from the customer to NTL’s point of presence, managed end-to-end connectivity, domain name registration, IP addressing and more. There are three flavours to the service. DIA Plus offers a single dedicated 24-hour connection. FlexiDIA offers greater flexibility.

Connection circuit speeds start at 8Mbps and it is possible to increase bandwidth without installing additional hardware. The Premium DIA package provides a second dedicated circuit to a different NTL point of presence for additional security.

Companies needing high-speed communications between two or more locations are pointed towards NTL’s FibreLink and FibreLink International products. These are fixed-dedicated circuits ranging from 64Kbps to 155Mbps, suitable for voice, data and video using the company’s own SDH (synchronous digital hierarchy) network covering Dublin, Belfast and major UK cities and, in the case of FibreLink International, selected countries up to 2048Mbps.

NTL’s IP Net products are aimed at companies with multiple locations needing private networking. Dedicated circuits ranging from 64Kbps to 155Mbps connect each customer site to an NTL point of presence. NTL’s Frame Relay product is similar but is more suitable for handling frequent bursts of data generated by multiple LANs (local area networks) communicating with one another.
By David Stewart