Ireland’s Broadband Performance and Policy ActionsJanuary 2010

Contents

1. Current Broadband Performance

- Broadband penetration (fixed and mobile)

- Cost and speed of available services for business and residential customers

- Next generation networks

2. Market Developments

– Core and Access Networks

3. Policy Recommendations

1. Strong Growth in Broadband Take-Up… but we are not yet converging on leading countries

0

5

10

15

20

25

30

35

40

45

Netherlands Denmark UK US OECD Ireland

Broadband Subscribers per 100 inhabitants, 2002-2009

Source: OECD, Broadband Statistics

While mobile subscriptions are high in Ireland, overall penetration rate remains average

37.0 31.6

38.1

21.8

28.9

31.3

29.3

29.1

26.4

21.4

21.4 17.0

19.8

20.8

18.1

16.8

17.0 11.3

12.6

7.6 12.7

13.1

4.9

3.2 4.1

1.6

8.3

10.8

4.7

3.2

3.2 3.8 1.6

4.7

0

5

10

15

20

25

30

35

40

45

50

Fixed Mobile

Source: OECD Broadband Statistics (fixed) and European Commission (mobile)

Fixed and Mobile Broadband Penetration per 100 Inhabitants, July 2009

Geography Does Not Help Roll-Out of Advanced Services

Source: OECD, Broadband Statistics; World Bank, World Development Indicators

Broadband subscribers per 100 inhabitants and Urban Population, June 2009

Denmark

Netherlands

Norway

Switzerland

South Korea

Sweden

Finland

Canada

UK

France

Germany

US

Australia

Japan

OECD-28

New Zealand

Austria

Spain

Ireland

Italy

Hungary

Poland

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

10 15 20 25 30 35 40

Urb

an

Po

pu

lati

on

as

% o

f T

ota

l Po

pu

lati

on

Broadband Subscribers per 100 Inhabitants

Low Penetration, High Urbanisation High Penetration, High Urbanisation

Low Penetration, Low Urbanisation High Penetration, Low Urbanisation

Download speeds in Ireland remain below the fastest speeds in other OECD countries

Fixed Broadband Lines by Speed, July 2009

16%

5%

66%

58%

19%

38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

>10 MB/s 2-10 MB/s <2 MB/s

Source: European Commission Working Document: Broadband access in the EU 1 July 2009.

Business Products are Improving (speed/costs) - but the most widely available service still offers

relatively slow speedsFastest DSL Connection offered by the incumbent and Annual € Cost

Australia Belgium

Canada

Denmark

EU-14

FinlandFrance

Germany

Greece Ireland (Limited Areas)

Ireland (Widely Available)

Italy

Japan

Luxembourg

Netherlands

New Zealand

Norway Poland

Portugal Sweden

UK

US

0

10

20

30

40

50

€0 €200 €400 €600 €800 €1,000 €1,200 €1,400 €1,600 €1,800

Fa

ste

st D

ow

nlo

ad

Sp

ee

d A

va

ilab

le (

MB

/s)

Annual Cost € Excluding VAT

Low Cost, High Speed High Cost, High Speed

Low Cost, Low Speed High Cost, Low Speed

Source: Teligen, September 2009

Ireland compares poorly with leading countries in terms of the fastest speed available to residential customers

Netherlands

France South Korea

Spain DenmarkEU-15 NorwayUK

Japan

GermanyAustriaPoland Portugal

FinlandBelgiumGreece

IrelandItaly

SloveniaLuxembourg Canada

0

20

40

60

80

100

120

140

€100 €300 €500 €700

Fa

ste

st D

ow

nlo

ad S

pe

ed (M

B/s

)

Annual Cost € Excluding VAT

Low Cost, High Speed High Cost, High Speed

Low Cost, Low Speed High Cost, Low Speed

Source: Teligen, September 2009

Fastest Residential DSL/Cable Connection and Annual Cost

Ireland remains behind leading regions in upgrading the local access network to fibre

0%

10%

20%

30%

40%

50%

60%

December 2008 J une 2009

Source: OECD, Broadband Statistics

Fibre Connections as a Percentage of Total Broadband Connections, June 2009

Ireland lags competitors as an increasing number of countries develop the capability to support next generation telecoms services

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20

30

40

50

60

70

80

So

uth

Ko

rea

Jap

an

Sw

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en

Ne

the

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nd

s

De

nm

ark

Sw

itze

rla

nd

Fra

nce

Fin

lan

d

US

Hu

ng

ary

Ge

rma

ny

Ca

na

da

UK

Au

stra

lia

Sp

ain

Po

lan

d

Ne

w

Ze

ala

nd

Ire

lan

d

Italy

Lu

xem

bo

urg

Tomorrow's Applications BQS Threshold: 50

Today's Applications BQS Threshold: 30

CISCO/Saïd Business School, University of Oxford, September 2009

Readiness to Support Next Generation Broadband Services, 2009

2. Market Developments

► International connectivity is strong

► Major improvements in the ‘core’ network

• Investment by telecommunications operators strong

• State-driven developments have played a strong role – ESB, BGE, CIE, Local Authorities - Metropolitan Area Networks, etc.

► Investment in Upgrading Access Networks Disappointing (from the national/ regional network to the customer premises)

• Eircom – some trials but no investment plan

• UPC investing significantly – potential speeds of 120 Mb/s in areas where it is active

• Recent launch of WiMax service in key cities (offering 8Mb)

• Trials of advanced mobile services (Long-Term Evolution) likely in next two years

3. Immediate Policy Requirements► Greater investment in telecommunications

infrastructure is essential if Ireland is to converge towards leading OECD countries in terms of high quality services

The report outlines action to:

► 3.1 Facilitate the Necessary Investment by Private Telecommunications Operators

► 3.2 Utilise Existing State Investments and Regulations

3.1 We Need to Facilitate Private Investment in Risky Network Upgrades► Ensure an appropriate return on investment to

incentivise investment in Next Generation Networks

► Examine the potential for infrastructure sharing while maintaining competition in the market

► Make spectrum available for wireless options – switching off analogue TV is key – update the 1926 Wireless Act

► Ensure wholesale access to a range of advanced products

► Reduce the cost of network rollout – minimise costs and onerous planning rules, and fragmentation across local authorities

3.2 Role of State Investment and Regulation► Progress the ‘one-stop-shop’ and the mandatory provision of ducting in building regulations

► Progress on local loop unbundling – competition spurs investment in fibre

► Mainstream the Provision of Access Infrastructure into Existing State Investment Plans

• Water distribution networks and metering, Smart Electricity Metering, Sewers, Roads, etc.

• Can Local Authorities play a more proactive role in developing open access infrastructure?

► Extend MANs in Cork and Waterford

► Potential to build additional MANs in 5 towns

► Demand for Broadband

• Progress on eGovernment, eHealth, ICT in Schools etc.

Conclusions

► Ireland needs to be among the leaders in Europe in the provision of advanced telecommunications infrastructure, access and services by 2012

► Broadband speeds available are currently higher in other countries and take-up of fibre is growing rapidly

► Investments being made currently are necessary but are not sufficient to achieve a leadership position

► Competitiveness threat for Irish firms as significantly faster speeds become widespread in other countries?

► Role for State Provision of Access Infrastructure?

• Some countries have developed more active programmes to roll out next generation networks

Thank You

To view the full report see http://www.forfas.ie/publications/2010/title,5376,en.php