Year in Review 2009: Telecoms (Ireland)


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'09 has seen its share of telecoms news and it's been mainly positive.

In January, after a few false starts the National Broadband Scheme was unveiled. Late in 2008 it had been announced that mobile operator (yes, mobile operator) Three Ireland had won the contract to deliver broadband all over the country by September 2010. There has been much reaction to the scheme, and while some business groups like Chambers Ireland welcomed it, it has come under fire from industry groups, while Opposition parties have raised concerns about the delivery method. Questions also arose as to whether the scheme would in fact be able to service all areas of the country. In recognition of this issue the Government announced in July that grants would be made available to about 12,000 homes excluded from the National Broadband Scheme, mostly in remote rural areas, to install alternative solutions like satellite broadband. In October Three Ireland awarded Satellite Broadband Ireland a contract to provide satellite broadband to some 5 percent of the more remote areas of the country.

Digiweb, which had a pretty active '09, also unveiled a satellite broadband product during the year. It said with its Tooway satellite service it aims to bring broadband to the parts of Ireland not covered by the National Broadband Scheme. Also this year Digiweb came to the rescue of fellow broadband provider Smart Telecom, which in August filed for examinership. In November Digiweb stepped in and acquired Smart for an undisclosed sum, creating a company with annual revenues of EUR40 million and more than 150 staff. The combined entity will have a subscriber base of 46,500 business, residential, corporate and government customers. Smart will form part of the Digiweb group, but the Smart brand will be retained. While the Smart/Digiweb figures tot up nicely to create a strong player in the telecoms market, it'll be interesting to see what kind of strategy will be employed by the firms. The consumer market in particular is becoming increasingly competitive thanks to efforts from companies such as Imagine Broadband, which released a WiMAX product in November that offers a phone line and broadband for EUR25 per month, half the price of Eircom's equivalent offering.

In another interesting move that stirred up competition in the market in July BT Ireland struck a deal to transfer its consumer and small business customers to Vodafone. In all, 84,000 of BT Ireland's domestic customers and 3,000 of its small business clients will now receive their fixed-line services from Vodafone. The deal means Vodafone will have a total of 170,000 fixed-line customers and a 15 percent market share, positioning it as Ireland's second largest fixed-line broadband provider, after Eircom, as well as being the country's largest mobile operator. BT meanwhile plans to focus all its attention on providing networked IT and telecoms services to large businesses and the public sector.

The thorny issue of local loop unbundling (LLU) weaved its way through 2009 with ComReg taking a number of actions to boost competition in the telecoms sector. In August ComReg directed Eircom to lower the prices it charges alternative operators to access its network. The price cuts follow moves made in June 2009 by ComReg which directed Eircom to lower the prices it charged for granting competitors access to its broadband network (line share). In October, the communications regulator ordered Eircom to remove a EUR47 fee it charges other operators to migrate a customer to a local loop unbundled (LLU) service from Eircom's Bitstream product.

Other notable developments in the Irish telecoms sector during the year include Minister for Communications Eamon Ryan outlining the Government's Next-Generation Broadband policy paper; the unveiling of the Government's programme to build an Exemplar Smart Network, which will be led by Intune Networks; and the commencement of the Broadband for Schools project to provide 100Mbps broadband to schools around the country (78 schools are currently taking part in a pilot project).

In its third quarterly report, released on 22 December, ComReg revealed that there are 1.4 million broadband subscribers in Ireland, 21 percent more than the third quarter in 2008. This figure includes mobile broadband subscriptions. This brings the per capita broadband rate to 30.5 percent (again, this includes mobile broadband). Combining fixed and mobile broadband penetration rates, Ireland ranks 11th out of the EU27 member states, and slightly above the EU average, according to ComReg.

Source: ENN: