Thank you all for taking the time to attend this morning’s conference. This event, the commencement of the procurement process for a “National Broadband Scheme” is crucially important, not just in terms of broadband availability, but also from both economic and social policy perspectives.
We in Ireland are experiencing remarkable growth in broadband. A recent report from the ECTA (European Competitive Telecoms Association) shows that the rate of growth in broadband in Ireland was running at 105% per annum. This is 3 times faster than the EU-25 average.
Indeed, ComReg’s latest official figures highlight the speed at which we are growing. The last quarter of 2006 saw the highest number of new subscribers added in any single period since the launch of broadband services in Ireland. Almost 81,000 new subscriptions were added in the three months to the end of the year. This growth is indeed extraordinary.
While the average number of subscribers per 100 of population in the EU-25 stands at 15.7, we in Ireland stood at 12.9 at the end of 2006. Today, the industry estimates that we have more than 14 subscribers per 100 of population. Based on these estimates, Ireland is on course to pass the EU-25 average by the end of the year. But we must not stop there. We must build on our good work and that is what this event is about.
Milestones achieved
The commencement of this procurement process is another milestone for Ireland’s knowledge economy.
Significant investments have been made in international connectivity, in backhaul infrastructure, and in Metropolitan Area Networks. These investments will allow Ireland to continue to attract foreign direct investment, a key ingredient for economic success.
We have also invested in smaller Group Broadband Schemes, and, with the assistance of industry, we have connected almost every primary and post primary school to a high speed internet service.
These infrastructure interventions have resulted in more competition and greater choice in the telecoms market. Competition and choice give rise to better value for money and increased innovation. This is all good for customers.
I am aware that detailed discussions are ongoing between the Service Providers and ComReg on the issue of LLU and while some progress has been made on this issue, more must be done. Significantly, the Oireachtas has recently given enhanced enforcement powers to ComReg in order to foster more LLU and more competition. The Act has also provided the Regulator with concurrent competition powers which I expect will have a positive impact in the near future.
National Broadband Scheme
But today is about broadband and ensuring the service is provided throughout the country. Recently, I outlined my policy principles governing the development of Next Generation Networks in Ireland.
Balanced regional development is a key priority for this Government and to achieve it everyone, irrespective of where they are, should have access to high bandwidth services. The knowledge worker cannot be confined by geographic location and should be free to live and work outside of the cities and towns.
Our future should require networks to follow the knowledge worker rather than the other way around. Rural development is also a high priority for Government.
It must be underpinned by the availability of high bandwidth networks throughout the country. Without doubt, this National Broadband Scheme will underpin rural and regional development.
So what can we expect from the new scheme – the NBS? Well for a start, it will provide broadband services to the unserved areas of Ireland. The successful bidders will provide a broadband service to all reasonable requests in the defined target areas.
As you can see behind me, an indicative map has been prepared which illustrates the areas that are currently served by broadband, areas that Service Providers plan to serve in the short to medium terms and the remaining areas that are unlikely ever to be provided with a broadband service. It is these unserved areas that will be targeted by the NBS.
On the advice of the technical consultants engaged on the project, a single national tender is proposed primarily because of Ireland’s spatial population distribution.
As service providers are constantly innovating and rolling out new services- this map will be updated on a regular basis.
It is envisaged that the Retail Product provided under the scheme will be an always on service of a minimum of1Mbit/s down and 128kbits/s up. The service must support Virtual Private Networks (VPN) for businesses and VoIP applications and devices for home business purposes.
Latency must be sufficient in order to allow standard applications such as VoIP and online gaming- to be run without significant degradation of service from a consumer perspective. The retail pricing for the service will reflect prevailing average prices.
The scheme will have a wholesale product requirement with an associated Service Level Agreement (SLA) for so that alternative Service Providers can also offer services. Although the finer details have yet to be finalised, a bitstream type product is envisaged with an associated reference offer and SLA.
The scheme is technology neutral. Given this neutrality, I expect that the winning Service Provider or consortium of Service Providers will use various technologies to meet the scheme’s requirements.
The winning Service Providers will be required to provide a service as soon as possible.
On the wholesale side, supplier performance will be a key requirement for the scheme and appropriate Service Level Agreements, and regular reporting on Key Performance Indicators and other metrics will be crucial.
A claw back clause will also be put in place to ensure any unanticipated profits- are shared between the exchequer and the Service Providers.
Full steam ahead
I would like to acknowledge the tremendous work of ComReg, Analysys Mason Group and McCann Fitzgerald for their expert input into the development of this scheme. This phase of the procurement process will finish on the 5th of July. At that stage we will have a short list of candidates who will participate in a competitive dialogue process. I look forward to a winning bidder being appointed by the end of the year and services being rolled out as quickly as possible thereafter.
Thank you.