The year 2015 will be a pivotal year in the history of telecoms in Ireland. Never before has so much investment been tipped to occur at the same time in terms of fibre. Quad play will be the name of the game.
Broadband will provide the roadways and arteries through which commerce and entertainment will flow in and out of countries such as Ireland over the coming decade.
The stakes are high because broadband investment will have a direct correlation in terms of a nation’s economic social and well-being.
From a poor start in the early 2000s, the last four or five years have seen a significant leap forward in terms of not only the quantity of broadband available but the quality of broadband available.
In the third quarter of 2014, 43.2pc of all broadband subscriptions were greater than 30Mbps, up from 35pc the previous year, according to ComReg, Ireland’s Commission for Communications Regulation. About 61.8pc of all broadband subscriptions were greater than 10Mbps, up from 42.1pc in the third quarter.
Mobile data is also accelerating. At the end of the year, 9pc of all mobile subscriptions had actively used 4G and data volumes had risen by 75.7pc in the year to reach 18,476 terabytes. Mobile operator Vodafone says it has 80pc population coverage, Eircom says it has 91,000 4G customers, and it will be interesting to see what a combined Three and O2 will do with their 4G network assets.
But you cannot talk about advances in broadband when you consider the still gaping divide between urban and rural broadband availability.
This will be the year when a lot of the neglect of a decade ago will finally be put right.
Eircom has already surpassed 1m premises that are capable of receiving up to 100Mbps broadband via fibre.
UPC says it now has 359,100 broadband subscribers, half of whom can receive speeds of at least 200Mbps.
But what is coming will truly change the game.
Putting fibre in the nation’s diet
There are three key developments occurring that could tip the balance in favour of long neglected rural communities with the implication that rural dwellers in Ireland may one day have better broadband via fibre than their urban counterparts, as well as their European counterparts.
During the year, former communications minister Pat Rabbitte revealed a long overdue commitment by the State to invest €512m in bringing fibre to rural communities using telegraph poles. This plan was fine-tuned and mapped and delivered by his successor Alex White, with plans to roll out fibre to 600,000 homes and 100,000 businesses from this year.
A second major development was the joint venture between Vodafone and the ESB to build a €450m pure fibre network that will connect 500,000 premises in 50 towns during its first phase. The European Commission gave the joint venture the green light in October.
The next piece in the jigsaw emerged when Eircom revealed plans to connect homes and businesses in 66 Irish towns with speeds of up to 1,000Mbps or 1Gbps, bringing fibre broadband to hundreds of thousands more premises.
The project will run in parallel with Eircom’s existing fibre investment programme. In August, Eircom announced an acceleration and extension of these plans to reach 1.4m premises by the end of 2015. It also expanded the planned footprint from 1.4m to 1.6m homes and businesses.
Both Eircom and the ESB/Vodafone joint venture will compete aggressively with one another to win a contract to deliver on the Government’s ambitious rural broadband plan. Both the Eircom 1Gbps network and the ESB/Vodafone joint venture will be rolled out separate to the Government’s plan and will proceed to be built regardless of who wins the lucrative contract.
Quad play is where the action will be
If you studied Eircom’s transformation in the past two years, from emerging from examinership to becoming a much more nimble and technologically advanced operator, you will see there is a game-changer it has embraced before all of its competitors – quad play, combining broadband with TV, mobile and phone services.
Eircom in its most recent financial results confirmed quad play has led to growth across all segments, including broadband, mobile, fibre and TV.
Quad play is the holy grail because it means operators will not only sell consumers something they will want, it will mean consumers are less likely to move from one contract to the next. It means staying power and the words every telco likes to hear: recurring revenue.
Already this month Sky is offering 100Mbps fibre broadband, which it sees as intrinsic to providing a more compelling consumer TV and entertainment experience. However, there is no sign yet of a mobile offering from Sky either in Ireland or the UK. Maybe that will change.
UPC, already a powerful force in terms of triple play, will become a quad-play player around April, when it enters the mobile market via a mobile virtual network operator arrangement with Three.
Vodafone is currently a triple-play player in terms of fixed-line broadband, as well as mobile broadband and mobile calls. The missing piece in the puzzle is TV.
On a global business level, there has been talk that Vodafone Group may be interested in buying Liberty Global, which owns UPC in Ireland and Virgin Media in the UK. That would be one solution for the quad-play gap, but certainly not the only one Vodafone could pursue to become a quad-play operator in its own right.
In the UK, BT has entered into exclusive talks with the owners of Everything Everywhere (EE), Deutsche Telekom and Orange, about potentially buying the mobile network for stg£12.5bn, giving BT the most substantial fibre and mobile network in the UK.
So the size of the prize is enormous in terms of digital business and consumer entertainment. Quad play means recurring and stable revenue for operators all over the world.
And Ireland will be no exception.
In 2015, the floodgates on fibre investment – long overdue – will open and the social and economic impact will be as crucial as the decision to electrify Ireland in the 20th century.
It’s about time. Let it begin.
Digital Ireland image via Shutterstock
