eamonn o raghallaigh the wi fi market in the republic of ireland2

Eamonn O’Raghallaigh MSc 1

Consultancy Report

The Wi Fi Market in the Republic of Ireland

Executive Summary

Wi-Fi is the popularised brand name for the wireless technologies used in home networking, corporate environments, handheld devices and mobile phones. Wi-Fi hotspots can be now found in locations as diverse as cafes, airports, hotels, urban centres and more recently in Ireland, are being rolled out on public transport. These advances have transformed the way business is carried out, allowing consumers the mobility and flexibility to work and access the internet anywhere they have access to a Wi-Fi hotspot.

According to The Commission for Communications Regulation (ComReg), the total number of broadband subscribers in Ireland at the end of June 2008 was 1,054,920. This represents an Irish broadband penetration rate, including mobile broadband, of 24.3%. There is still a considerable percentage of the population which does not subscribe to broadband services and there is a potential gap in the market to service these consumers. The number of Wi-Fi Access Points has increased by 33% between Q2 2007 and Q2 2008

The Wi-Fi market in Ireland is comprised of three major players including the public limited companies Eircom and BT Ireland and the privately held BitBuzz Ltd. There are a number of competing technologies to Wi-Fi, including Fixed Wireless (FWALA), 3G and WiMAX. All competitors have their own merits and advantages. In the future, strong competition is expected from WiMax and 4G.

The current Wi-Fi market in Ireland is currently saturated with strong competitors. There is little opportunity to enter this market as a competitor as the infrastructure costs compared to ROI are too high. Furthermore, the niche Wi-Fi market is also awash with companies providing tenders for Wi-Fi on public transport, libraries, hospitals, hotels and airports. There are few potential opportunities for a move into a niche area.

However, there is one niche vertical market which seems to be unexplored. The tourist industry is a significant source of revenue to the Irish economy. I propose that we tender to the government and to Bórd Failte for the roll out a system where all major tourism sites in Ireland are enabled with wireless technologies and that tourists can connect wirelessly to the Bórd Failte WAN and view information about the particular site they are visiting on their Wi-Fi enabled phone or PDA. This would add to the tourists experience significantly during their visit to particular sites.

However, the emergence of substitute products (3G/4G and WiMAX technologies) may pose significant threats to the future feasibility of the business, hence caution is advised and moving forward is dependent on the securitization of government tenders.


Table of Contents

Introduction ............................................................................................................................................................. 3

Current State of the Market ................................................................................................................................ 3

Major Competitors ................................................................................................................................................ 5

Eircom Plc ............................................................................................................................................................. 5BT Ireland Openzone .......................................................................................................................................... 5

BitBuzz Ltd ............................................................................................................................................................ 6

Emerging Competitors ........................................................................................................................................ 6

Competing Technologies .................................................................................................................................... 6

Fixed Wireless Access Local Area (FWALA) ................................................................................................. 63rd Generation Mobile Broadband (3G) ........................................................................................................... 6

WiMAX ................................................................................................................................................................... 7

Technical Advances and Future Trends ........................................................................................................ 8

Recommendations ................................................................................................................................................ 8

Conclusions ............................................................................................................................................................ 9

References ............................................................................................................................................................ 10


Introduction

Wi-Fi is the popularised brand name for the wireless technologies used in home networking,

corporate environments, handheld devices and mobile phones. These technologies primarily

consist of the IEEE (The Institute of Electrical and Electronics Engineers) 802.11

communication standards, including 802.11b, 802.11g and 802.11n, amongst others

(Wikipedia.org, 2008b). These technologies have transformed accessibility to the internet

and ushered in a new wave of data connectivity to the populous.

Wi-Fi hotspots can be now found in locations as diverse as cafes, airports, hotels, urban

centres and more recently in Ireland, are being rolled out on public transport. These

advances have transformed the way business is carried out, allowing consumers the mobility

and flexibility to work and access the internet anywhere they have access to a Wi-Fi hotspot.

Current State of the Market

Internet hotspots are typically public wireless access points where a computer, usually a

laptop, or other portable device (PDA, Smartphone) can connect to the internet. A Wi-Fi

hotspot can be made up of one or more Wi-Fi access points. Wi-Fi hotspots tend to be found

in airports, hotel lobbies, cafés and restaurants. In most cases, the user pays for high-speed

internet access at an access point, based either on a once-off payment for a specific amount

of time online or a recurring monthly subscription. There are a number of providers of these

services in Ireland including BitBuzz, Eircom and BT Ireland.

According to The Commission for Communications Regulation (ComReg), the total number

of broadband subscribers in Ireland at the end of June 2008 was 1,054,920. This represents

an Irish broadband penetration rate, including mobile broadband, of 24.3% (Butler, 2008c).

There is still a considerable percentage of the population which does not subscribe to

broadband services and there is a potential gap in the market to service these consumers.

The Wi-Fi Hotspot/Access Point market has flourished in light of this potential revenue

opportunity. The number of Wi-Fi Access Points has increased by 33% between Q2 2007

and Q2 2008 (Comreg.ie, 2008).


Figure 1: Wi-Fi Hotspots and Access Points in the Republic of Ireland

Source: Quarterly Key Data Report.(Comreg.ie, 2008)

Table 2 shows a comparison of public WLAN hotspots among 15 European countries.

Ireland has the most public Wi-Fi hotspots per capita among the countries analysed.

Figure 2: European Public WLAN Hotspots Q1 2008

Source: Quarterly Key Data Report (Comreg.ie, 2008)

Although the potential growth in the Wi-Fi markets seems like a considerable business

opportunity, the business community seems to be moving away from the Wi-Fi model

towards the mobile broadband (3G) model. In a business survey of the telecommunications

needs of large Corporate firms and Small and Medium Enterprises (SMEs) by ComReg,

adoption of mobile broadband, via laptops using data cards and modems, is very strong

among both SMEs (16%) and large corporate entities (55%) (Butler, 2008a).


Novel approaches to providing Wi-Fi access to niche segments of the market are also a

strong growth area for Wi-Fi in Ireland. One initiative is to roll out Wi-Fi infrastructure in all

public libraries in the Republic of Ireland. Each of the 353 branch libraries will provide a

service to enable library users to have Internet access either using their own laptops or the

libraries' public access computers or laptops (Environ.ie, 2007). Another novel strategy is the

implementation of Wi-Fi in public hospitals in Ireland. The first service was installed in St

John's Hospital in Limerick, Ireland, which enabled the doctors to access the records of

patients at the bedside. The network empowered the hospital staff to use mobile picture

archiving and communication systems, which allows X-rays and ultrasounds to be read

anywhere in the hospital (Thomson, 2008). There are also plans in place to roll out Wi-Fi on

major public transport services, notably Dublin Bus, which is seen as a major step forward in

Ireland’s development as a major knowledge centre globally (O'Raghallaigh and Wildgust,

2008).

Major Competitors

The Wi-Fi market in Ireland is comprised of three major players including the public limited

companies Eircom and BT Ireland and the privately held BitBuzz Ltd. These companies

have invested heavily in infrastructure over the last number of years and are only now

gaining a strategic foothold in the wireless broadband market. Each competitor has a

different strategy (outlined below) which it hopes will give them a competitive advantage.

Eircom Plc

Eircom is the largest telecommunications operator of the three based in the Republic of

Ireland and its current market strategy is to offer free access to its 1100 Wi-Fi access points

nationwide to all new and existing Eircom broadband customers (Shanbhag, 2007).

BT Ireland Openzone

BT Ireland’s strategy has differed from that of Eircom, targeting strategic partnerships with

companies such as Maxol and Nintendo. Following a deal between BT and Nintendo, Irish

users of the console are able to enjoy free Wi-Fi access at any one of the 270 BT Openzone

locations across Ireland. Secondly, Nintendo will be installing BT Openzone Wi-Fi hotspots

in major video game retailers such as HMV, Game, Smyths Toys and GamesStop (Kennedy,

2006).


BitBuzz Ltd

Wireless hotspot provider BitBuzz has reported that it has reached a total of 113,478

registered users at the end of its 2008 second quarter. Deals announced with O2 (to service

the new iPhone market exclusive to o2) and Travelodge Hotel Group in the second quarter

have contributed significantly to the company’s strong growth. The number of BitBuzz Wi-Fi

hotspots across the country currently total 173 (Kennedy, 2008).

Emerging Competitors

One emerging player in the Wi-Fi market in Ireland is E|net, the first operator to offer open

access Wi-Fi network in Carlow town, in a joint operation with Carlow County Council. The

network is being delivered almost three years ahead of Dublin’s proposed Wi-Fi network,

according to the project partners, and covers 50% of the businesses and 10% of residences

in Carlow town. The network is deployed on the Carlow fibre optic Metropolitan Area

Network (MAN), leveraging Government investment in the MAN Programme. Homes and

businesses in the town have access to a world-class municipal Wi-Fi mesh infrastructure.

E|net have plans, with appropriate funding, to replicate the Carlow service in all 27 MAN

towns by 2010 (Techcentral.ie, 2007).

Competing Technologies

Fixed Wireless Access Local Area (FWALA)

One major emerging competing technology to Wi-Fi is Fixed Wireless Broadband. This

technology comprises base transmitters placed on tall buildings and masts which deliver

wireless broadband across the local area. Customers connect to the network using a small

antenna on their roof. One major drawback of this technology is that the customer’s antenna

must be within line of sight of a base transmitter. Unlike mobile phone signals, the signals

cannot penetrate walls. There is now in excess of 121,000 customers in Ireland and the roll

out of FWALA has been a key driver in the take-up of broadband services in rural Ireland

(Butler, 2008b).

3rd Generation Mobile Broadband (3G)

3G is the third generation of mobile phone standards and technology, superseding 2.5G. 3G

networks enable network operators to offer users a wider range of more advanced services

while achieving greater network capacity through improved spectral efficiency. HSPDA data

transmission capabilities are able to deliver speeds of up to 14.4 Mbit/s on the downlink and

5.8 Mbit/s on the uplink. Currently in Ireland, all the major mobile telecommunications


providers (o2, Vodafone and Three) offer 3G broadband services to customers, with

downlink speeds of up to 7.2 Mbit/s. Unlike Wi-Fi networks, 3G networks are wide-area

cellular telephone networks that evolved to incorporate high-speed Internet access and

video telephony. IEEE 802.11 networks are short range, high-bandwidth networks primarily

developed for data (Wikipedia.org, 2008a).

WiMAX

WiMAX (Worldwide Interoperability for Microwave Access) is a standards-based wireless

digital communications system, also known as Wireless MAN or the Air Interface Standard,

IEEE 802.16. The IEEE 802.16d standard was developed to deliver non-line-of-sight (NLoS)

connectivity at a fixed location between a subscriber station and base station, using a point

to multipoint architecture. The major WiMAX player in Ireland is Irish Broadband and it is the

third most popular broadband service in Ireland, after Eircom and BT, with some 50,000

residential and business customers (Comreg.ie, 2008).

Figure 3: Comparison of different wireless technologies

Source: (Wikipedia.org, 2008a)

Figure 3 shows the different wireless technologies found in Ireland. As noted form the graph,

WiMAX is strategically placed on the graph to deliver optimum speed and mobility. This is a

major competitive advantage of WiMAX over the other technologies.


Technical Advances and Future Trends

One long awaited future trend is the introduction of Mobile WiMAX, the next generation of

WiMAX. This will improve significantly on existing fixed wireless broadband technologies.

This advanced wireless network is capable of delivering high speed data, including

streaming video and voice services (VoIP). Mobile WiMAX is a technology now primed and

ready for its clearly defined market. The standard is in place, components are available, and

regulatory conditions are favourable (researchandmarkets.com, 2008).

Another eagerly awaited future technology is 4G - fourth generation. 4G will offer a total

revolution in wireless communications and will allow users to get voice, data and multimedia

whenever they want it, wherever they are and at far higher streaming or transfer rates than

ever experienced before. It’s expected to be working commercially by 2015, as the 3G

networks are anticipated by then to be fully congested. 4G is expected to be entirely IP

based, and will be able to provide speeds between 100Mbit/s and 1 Gbit/s, absolutely

anywhere - of the highest quality, and with superior security attached. 4G technologies are

expected to compete feverously with existing technologies and gain a competitive advantage

based on mobility, speed and security.

Recommendations

The current Wi-Fi market in Ireland is currently saturated with strong competitors. The main

players in the Wi-Fi arena are Eircom, BT Ireland and BitBuzz. There is little opportunity to

enter this market as a competitor as the infrastructure costs compared to ROI are too high.

Furthermore, the niche Wi-Fi market is also awash with companies providing tenders for Wi-

Fi on public transport, libraries, hospitals, hotels and airports. There are few potential

opportunities for a move into a niche area.

Competing technologies also reduce the feasibility of a successful move into the market

space. WiMAX, fixed wireless and 3G broadband technologies are fairly new to the market

and are expected to gain a greater market share as technology advances, thus reducing any

potential opportunity in the Wi-Fi market.

However, there is one niche vertical market which seems to be unexplored. The tourist

industry is a significant source of revenue to the Irish economy. I propose that we tender to

the government and to Bórd Failte for the roll out a system where all major tourism sites in


Ireland are enabled with wireless technologies and that tourists can connect wirelessly to the

Bórd Failte WAN and view information about the particular site they are visiting on their Wi-Fi

enabled phone or PDA. This would add to the end users experience significantly during their

visit to particular sites. This will save on the need for printed guides at each heritage site.

There would be a significant controversy regarding the location of transmitters in areas of

natural beauty, but green and carbon-neutral policies combined with clever camouflage of

the transmitters should appease any objections in light of potential benefits. The areas in

question would be visitor centres, national heritage sites and other areas where a large

proportion of tourists visit.

When the user enters the site they are informed that a Wi-Fi network is available and once

they connect their device to the network the mobile page regarding the specific site they are

visiting is brought up automatically. The user can then view information regarding the site,

view rich media including a video guide and listen to a recorded commentary regarding the

site on their PDA or Wi-Fi enabled phone. With the availability of Wi-Fi enabled handsets

increasing and many tourists bringing their devices with them on holiday, this offers a

potentially untapped vertical market.

Conclusions

Based upon elements discussed in this document, our conclusions are that the Wi-Fi market

in Ireland is saturated with competitors and there are significant barriers to entry for new

entrants. There would be considerable financial outlay for capital equipment and the

predicted return on investment may make a move into the general Wi-Fi market unfeasible.

We recommend that the company positions itself in a niche vertical market within the general

industry and to gain tenders from state bodies for implementation. As discussed, the tourism

industry has been generally overlooked in the implementation of Wi-Fi infrastructure, apart

from hotels and accommodation. We believe that the provision of high quality Wi-Fi services

in tourist hotspots, combined with a web-based platform for disseminating guide information

would work well in the current context.

However, the emergence of substitute products (3G/4G and WiMAX technologies) may pose

significant threats to the future feasibility of the business, hence caution is advised and

moving forward is dependent on the securitization of government tenders.


References

BUTLER, T. (2008a) ComReg Business Survey reveals that adoption of mobile broadband is

strong. Commission for Communications Regulation.

BUTLER, T. (2008b) ComReg makes additional Spectrum available for Fixed Wireless

Broadband Services. Commission for Communications Regulation.

BUTLER, T. (2008c) ComReg’s latest Quarterly Report shows over a million broadband

connections in Ireland. Commission for Communications Regulation.

COMREG.IE (2008) Quarterly Key Data Report. Commission for Communications

Regulation, 08/75.

ENVIRON.IE (2007) Roche makes €700,000 available for provision of Wi-Fi Access in Public

Libraries. Department of the Environment.

KENNEDY, J. (2006) Free Wi-Fi for Irish Nintendo gamers. SiliconRepublic.com.

KENNEDY, J. (2008) What’s the buzz about hotspot provider BitBuzz? SiliconRepublic.com.

O'RAGHALLAIGH, E. & WILDGUST, R. (2008) How well is Dublin doing in attracting the

best workers in the world? Sunday Business Post 10/02/08

RESEARCHANDMARKETS.COM (2008) Wireless Broadband Technology Trends Report

Spring 2008. Research and Markets.

SHANBHAG, R. (2007) Eircom Offers free access to almost 1,100 Wi-Fi Hotspots in Ireland

TMCnet.com.

TECHCENTRAL.IE (2007) First open access Wi-Fi network launched in Carlow.

THOMSON, R. (2008) St John's Hospital saves staff time with wireless access to patient

data. Computer Weekly, 42-42.

WIKIPEDIA.ORG (2008a) 3G Technologies.

WIKIPEDIA.ORG (2008b) Wi-Fi.

eamonn o raghallaigh the wi fi market in the republic of ireland2

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