As CEO of satellite communications company MediaSat, one of Rory Fitzpatrick’s (pictured) biggest challenges is not dealing with the technology itself but with the public perception of it. Mention DSL to anyone and they think €40 a month; mention broadband satellite and they think telephone numbers.
Satellite communications do not possess this reputation for nothing. Putting satellites into orbit is hardly a cheap business and for many years the technology was out of the reach of almost everyone bar round-the-world yachtsmen and media organisations. However things have changed and costs are coming down – both on the equipment and the service sides.
Fitzpatrick notes that whereas three years ago a two-way broadband satellite system might have cost €10k, today it costs about €2k, thanks to technological improvement and the downward drift in the price of electronic components. What is causing the service costs to fall, on the other hand, is the growing number of users of satellite technology. As Fitzpatrick puts it: “Critical mass is a biggie.”
MediaSat (or Media Satellite Ireland to give it its full name) was established six years ago by Rory and his brother, Dan. In what it described as a “major investment in Irish broadband infrastructure” the company last week announced that it is to invest €2m in its first Irish satellite uplink facility, to be located in Co Cork. The new facility, which will cost an additional €1m a year to run, will employ 25 people in engineering, technical and customer support positions and will bring the total company headcount to 45.
Until now, the company has provided its broadband services via third-party hubs in mainland Europe. Having its own uplink facility in Ireland will, says Fitzpatrick, give it greater control and autonomy. “It is part of our continued commitment to deliver the best service possible to customers,” he notes. “The customer will benefit from reduced network operating costs and new products and service enhancements.” The facility will also allow MediaSat to offer broadband satellite services to the numerous countries in Europe and beyond covered by the Astra satellite.
Fitzpatrick feels that the uplink facility will help drive the growth of the business and expects a “minimum of 10,000 customers” within two years, compared to its current tally of 500. By that time, all being well, the company plans to get a listing on the Alternative Investment Market in London.
These bold plans suggest that the days of plenty have arrived for MediaSat but being a broadband provider has its share of frustrations too. One of Fitzpatrick’s bugbears is the tendency of some users to clog up the pipe by downloading massive amounts of data and he even allows himself a rant at one particular customer who recently downloaded 38GB worth of material over a weekend. Customers do it because they can; it doesn’t cost them anymore than if they were downloading 1MB of data but for Fitzpatrick it calls into question the sustainability of the flat-fee model the broadband industry has been built upon.
“Cable services around Europe are very cheap at the moment. The reason they are cheap is because they have a lot of spare capacity. But as the capacity is taken up, the cost will rise too so that broadband eventually will be pay for view rather than flat rate,” he predicts.
Fitzpatrick concedes that there is a vocal lobby in support of flat-rate access but does not believe that the majority of users feel that way. “The people who shout most about flat rate are the people who want to abuse it,” he says scathingly.
The other aspect of broadband that really gets him going is the sort of liberation theology that has attached itself to the concept. A lot of users believe, misguidedly in his view, that they should be able to get affordable broadband no matter where they happen to live and that, in addition, they should be able to run their business on it, be they living in Ballybough or Ballyboughal.
“There are people who think that you should be able to run a business from anywhere on the planet but that’s insane. Broadband will always be cheapest in the high-density areas. Also, broadband providers can’t be expected to put in infrastructure in areas where it’s not financially viable – that’s the Government’s job,” he says.
The average user may not be interested in the economics of broadband but this is not a subject that can be skated over, Fitzpatrick insists. DSL, he points out, is only as cheap as it is because the telephone network on which it is based is already in the ground and paid for. Even still, to be economically viable, there has to be a minimum number of users, which is why the technology has been slow to penetrate rural areas. Add to this the phenomenon of one-off housing, which means that Ireland has now twice the amount of road per dwelling than the European average and the cost of broadband provision becomes even higher, he points out.
At the same time, unsurprisingly, people clamour to be given the wherewithal to e-work, to avoid long journeys to cities and achieve the fabled work-life balance. But to Fitzpatrick, as a telecoms provider, a fragmented customer base cannot be serviced cheaply, even when the technology is satellite and not copper in the ground. He even goes so far as to dismiss e-working – at least full-time e-working – as a bad idea. “It’s very bad for people and causes very high level of depression,” he claims. “You need human contact and it’s the one thing the workplace provides.”
Fitzpatrick is nothing if not forthright in his opinions and seems to enjoy swimming against the tide on a range of issues such as the maturity of the technology market: “We’re at the Model T Ford stage”; the digital home: “Still 10 or 20 years away”; public understanding of broadband: “Very confused”; and computers: “Not easy to use”.
On broadband itself, he is more equivocal. Yes, broadband is here to stay but the lack of a killer application will mean that it will be evolution rather than revolution.
“It will be a slow build up with lots of individual applications – a slow stacking of reasons to adopt broadband. It will gradually build up and then reach a level when it will steamroll.”
By Brian Skelly
