E-Galway Week National Broadband Conference and Expo

The Irish telecoms industry has recently been subject to much change and 2006 promises to be yet another exciting year. Recently, we have seen:

• the incumbent teleco has been eyed-up by two different buyers,
• the cable industry is going through a merger,
• 3G services have been launched in Ireland,
• cross-border mobile phone roaming charges have been abolished,
• wireless broadband has established itself in the marketplace,
• VoIP services are available for residential and business users,
  and new broadband services and prices, as well as new service providers, have been launched.

Broadband is a priority issue for me and this Government. I have to be frank with you here this morning and say that I am tired of hearing so much negativity around the issue of broadband. I fully accept that we have a way to go and ground to make up, I would be the very first to accept that but can we just stand back and look at some of the achievements and progress that we have made in the recent past.

We have seen significant improvements during 2005 and in the first quarter of this year. There are now over 320,000 broadband subscribers in Ireland, a figure that is growing rapidly. In fact, the market more than doubled in twelve months. That was twice the rate of growth in the EU broadband market. I believe that this is a clear signal of the strength and demand in the broadband market in Ireland. It is fully anticipated that we will reach our target of 400,000 broadband subscribers by the end of this year.

It is important to evaluate our progress in a balanced manner and recognise achievements where they have been made. I am concerned that some commentators overplay the so-called ‘broadband failure’ in Ireland. They risk unnecessarily damaging Ireland’s international reputation. Let us consider where we stand in early 2006:

• Broadband availability is now on a par with EU 15, with over 80% of telephone lines now connected to broadband enabled exchanges.
• The price of residential and SME broadband continues to fall, and is now 20% below the EU average. In fact, it is possible to get broadband for less than €20 per month, compared to over €130 in 2002.
• The speed of residential broadband continues to improve. 1 megabit is now the standard basic broadband, but speeds of 3 and 4 megabits are available for residential users, and higher again for business users.
• In terms of large corporate customers and foreign direct investment, we have amongst the lowest costs in Europe in terms of international connectivity and private networks and the Government’s open-access MANs ensure that large businesses throughout Ireland can get competitive priced services.

Broadband communications is an essential building block for future economic development, particularly as Ireland moves towards a more knowledge intensive economy.

What is central to driving broadband take-up in Ireland? The answer is both competition and demand stimulation. I am determined to facilitate more competition in the broadband market in Ireland. I will continue to ensure that the Irish consumer benefit from more competition – both in terms of greater choice of vendor and better priced services. I am using the two arms of telecoms policy to drive competition into the market place – they are Government investment and regulation.

The first phase of Metropolitan Area Networks have been completed. All 27 MANs are now being operated by E-Net. In little over a year since completion, these MANs are already carrying commercial traffic. These operator neutral, fibre-optic rings are facilitating the provision of services by alternative providers in regional cities and towns. Their first customers are the large businesses that have chosen to locate in regional towns across Ireland. The MANs will facilitate new entrants, new services and more competition throughout Ireland.

The second phase of the MANs programme, which was recently endorsed by the European Commission, is underway. The Commission took the view that these carrier-neutral, open-networks will enable all operators to offer high-speed broadband services to businesses and citizens in the towns concerned and that the programme will boost competition and is fully in line with the Commission’s policy to promote broadband in areas which would otherwise miss out. This investment opens up the possibility of next generation services and future proofed networks throughout the country and will help combat any regional digital divide.

In addition to Government intervention, the market is also intensifying competition. Significant private investment has been made in DSL, wireless broadband, cable and satellite broadband, which will also increase competition between different types of cable, wireless and DSL providers. All these platforms are expanding.

The other arm of the Government’s telecoms policy, regulation, is also driving competition into the telecoms market. You are all aware that DSL, with three-quarters of the market, is the largest access mode. It is essential that competition is increased within the DSL platform, as well as between different infrastructures. Government policy is clear on this – it is implementation of full local loop unbundling. I am disappointed that BT have withdrawn from these negotiations. I intend to address competition issues in the forthcoming communications miscellaneous provisions bill.

From the consumer’s perspective, it should be a relatively smooth and seamless process of switching between broadband service providers. The way to hold customers is to provide a superior service that exceeds their expectations.

Consumers have benefited from being able to switch mortgage providers, banks, health insurance providers and mobile phone companies. I am determined to see broadband consumers enjoy the same convenience and benefits.

And what about the future of broadband in Ireland? On the demand side, my Department recently ran a public consultation on broadband seeking views on the issue of take up and demand stimulation. I believe that this is another area where current efforts need to be augmented if we want to push our patterns of take up beyond that which is considered ‘normal’.

I am ambitious of Ireland, for this economy, and the roll out of broadband infrastructure and services is a key component of moving Ireland to the forefront of knowledge-based economies in the world. Broadband connects. It enables collaboration, a central pillar of the knowledge economy. It spreads valuable information throughout the economy connecting us all.

Today, you will be discussing the use of broadband. I believe that broadband will have enormous impact on small and medium business in terms of improving efficiency and competitiveness. Greater efficiency can be achieved, for example, through controlling operational costs and supply-chain management using broadband. Similarly, broadband can impact on competitiveness by providing a new and far-reaching sales channel and improved customer relationship management. This is a particular segment of the market, which requires a new focus, particularly in relation to migration of current narrowband SME users to broadband products.

In the area of health services alone, the synergies that broadband could release could save hundreds of lives a year and improve the overall effectiveness of our health service. For example, in the UK BT has implemented the teleradiology solution, BT Radworks, which enables connected hospitals to share each other’s consultant radiologists. This has resulted in the time taken for an on-call consultant to view an x-ray image from 18 minutes to a mere five or six minutes- a reduction of some 66 per cent

In addition, there is a need to demonstrate the applications of broadband and raise awareness with the domestic sector as well. I am happy to report that progress has been made with this segment of the market with broadband take up by households now estimated at over 20%. We should recognise this achievement, but we should not be complacent. It is for this reason that my Department along ComReg will be hosting an event in the autumn aimed at raising awareness of broadband and some of its practical applications.

Broadband will also have an impact on how citizens live their lives. My Department and the Department of Education are working in partnership with the Telecommunications and Internet Federation to bring broadband into every school in the country. Already, we have enabled over 3,200 schools, in one of the largest IT rollout projects in the State, and I expect the final batch to be enabled shortly. Broadband in the school has the potential to equip a new generation of workers, researchers and innovators for the future.

Each time I visit the Digital Hub I am astounded by the innovations that I see in the digital media market place. It is one of the most exciting areas in the entire ICT sector. The Hub is currently going through a large development phase, valued at almost €120 million, to accommodate the rapidly growing digital media cluster.

In this increasingly connected but competitive global economy we should not loose sight of what it takes to stay ahead. I firmly believe we should acknowledge the significant progress made to date. Equally, we also need to accelerate and deepen efforts in key areas where ground needs to be made up. We need to keep up, not just catch up!

I thank you for this opportunity and wish you an engaging and enjoyable conference on the uses of broadband.

ENDS