Sunday Times - Letters Published

DonegalMan

Five letters published in today's Sunday Times in response to David Mcredmond's piece last Sunday!

Well done everyone who wrote in - publication of five different letters suggests they got a lot more and regard it as a 'hot' subject.

damien

Jaysus, Adam's letter was really edited down.

mike65

Jaysus, Adam's letter was really edited down.

Ah dont worry that standard media practice (sent an e-mail to 5 live last night re Ken Bigley and it was edited from 2 sentences to 1!).

heres the whole page

DAVID McREDMOND’S article (Eircom can’t do it all on its own, Business, last week), is a masterpiece in obfuscation.

He claims that 70% of the country is covered for broadband, yet Eircom’s own marketing proudly boasts of 1m lines being enabled, exactly half the lines in the country. He recently admitted on radio that the failure rate for lines is between 20% and 30%, which means that something less than 40% of the country can actually receive broadband from Eircom.



He accuses other companies of “doing it on the back of Eircom’s investment” — perhaps this may be influenced by the fact that Eircom’s charge for local loop unbundling is one of the highest in Europe, over three times the cost in Britain.

Irish investors have taken a hammering over Eircom, yet the dividends taken out of a debt-laden company by its shareholders in the past year alone amount to at least five times the total amount they plan to spend over three years on the network.

Eircom’s suggestion that the Irish government should now treat it as some sort of favoured partner and provide new funding is nothing less than stomach churning.

Martin Harran
Castlefinn, Co Donegal

ASSET SWEAT: Eircom may say its “obligations are to its customers” but, as McRedmond stated, it is a commercially listed plc and, by definition, is profit-driven. Its obligations are solely to its shareholders and providing them with the generous 8% dividend that has been promised. The customer comes a distant second.

McRedmond may claim that Eircom is investing in its network at a rate broadly in line with its European peers, but Eircom’s company filing with the US Securities and Exchange Commission (SEC) tells a different story. The filing states that Eircom’s “level of depreciation charges . . . currently exceeds capital expenditure and is likely to do so for the next three to four years”. This is a serious case of sweating the assets at the customer’s expense.

Eircom isn’t even maintaining the network at its current level; they’re letting it rot in the ground.

I dearly hope that our new minister for communications, Noel Dempsey, ignores the thinly veiled pleas to have funds directed into Eircom’s pocket in the guise of completing “the job of rolling out (broadband) to everybody in Ireland”. I would suggest that the minister have a read of Eircom’s SEC filing to get a real insight into its motives and why it is necessary for McRedmond to use smoke and mirrors to hide the crisis in Eircom’s communications infrastructure to prevent its share price from dropping even further.

Gareth Pelly
Kinnegad


MONOPOLY: While Eircom is not a semi-state company anymore, it is still in the position of a monopoly, as it owns nearly all of the equipment involved in the telephone network in this country. Eircom might be one of many companies in a liberated telephone market, but it alone owns the physical network. The likes of UTV pay Eircom for the use of the network — McRedmond forgot to mention this. Payment from these companies is more than enough to maintain the network.

Francis Dunne
via email


COMPETITION: If the government funds Eircom’s broadband roll-out, it reinforces the monopolistic position of a company that places shareholder value over customer value.

The government has invested considerably in alternative telecoms infrastructure. A €200m investment in Metropolitan Area Networks (MANs) and a €50m investment in ESB’s national backhaul network has transformed the competitive telecoms landscape.

If the government had gifted Eircom €250m, what would we see? Would Eircom have deployed next-generation networks to reduce the cost of telecoms to businesses and consumers? Or would it have resulted in a larger dividend to its shareholders? The government should not entertain the strengthening of Eircom’s monopoly. State investment to date has shown how much can be achieved through the creation of competition. If further government investment is to be made, it should continue the philosophy to date; alternative open networks for alternative operators.

Oisin Fanning
Chief Executive
Smart Telecom


NERVE: The piece by McRedmond was incredible. Incredible that he has the nerve to pass this guff off as his “personal view”. Even more incredible that you donate column inches to it.

Adam Beecher
Cork

Mike.

De Rebel

Good to see a cross section of letters, and especially to see a telco coming out and taking a stand in public. Well done to in particular to Oisin Fanning - makes you wonder where ESAT/BT are hiding and why they don't engage.

dahamsta

I had the mammy buy the paper for me this morning and she mentioned that it was edited down, but she didn't see the other letters. T'was great to open up the page to see that every letter was about Eircom. Up yours McRedmond!

adam /blows a big raspberry at the arrogant tosser

DonegalMan

dahamsta wrote:

T'was great to open up the page to see that every letter was about Eircom.

Bit of a breakfast spoiler for Eircom executives this morning, I'd guess

Forgot to point out that whilst McRedmond's article last week was in the Buiness section, these letters are in the main section which means more people will see/read them!

eircomtribunal

There were more nice articles in the Sunday Times
On the back of the business section a reference by Frank Fitzgibbon (known from many appearances on AGENDA) about the issue:
"Having spent much of our adult life attacking Eircom in its various corporate guises we thought the company's request to put its position to our readers on the current state of the broadband market was a reasonable one. That is not a view shared by too many people.
Allowing David McRedmond, the commercial director of Eircom, to present the company's case in these pages last week has antagonised a number of our readers who have taken the time to make their views known in no uncertain manner.
This week we publish a response to McRedmond's article in our Personal View (see page 4) and our letters page in the news section contains further comment. As British Telecom, Eircom's UK equivalent, used to say, "It's good to talk".

Here's the Personal View article by Perlico boss Ian McDonald:

P.



October 10, 2004

Personal View: Eircom is stifling the Irish economy


IT IS an accepted fact that widespread availability and adoption of broadband is an issue of national importance. It is essential to drive competitiveness, encourage foreign direct investment and maintain Ireland’s ranking as one of the world’s top economic performers.

Last week in this column Eircom argued that it is a commercial profit-making organisation that must deliver a return on investment to its shareholders.

In my opinion it is the turbo-capitalistic, short-term demands of Eircom shareholders to deliver dividends that is taking precedence over the best interests of the Irish telecom consumer.

Although 70% of the country is covered by broadband, less than 5% of people have signed up for the service. This penetration level is far below what could be achieved. As a result, Ireland Inc is being disadvantaged.

Under the terms of its licence to operate, and as custodian of the former state-owned telecom network, Eircom is required to facilitate competition and provide alternative operators with access to its network.

However, the telecoms company has yet to embrace fully the fact that competition is a necessary part of its operations. As a consequence, the wholesale price Eircom charges for access to its network, enabling other operators to deliver DSL (digital subscriber line) broadband, is too high.

The direct effect of this is that alternative operators, including my company, Perlico, have DSL broadband available now, and want to invest in marketing, but cannot do so because the sector simply does not provide a viable return.

Markets as diverse as Britain and South Korea show that the roll-out of DSL broadband technology over the incumbent operator’s network allied to the existence of true competition is essential to achieving mass adoption.

As further proof of Ireland’s unattractive competitive environment, many international DSL broadband suppliers such as AOL and Wanadoo remain absent from what is one of Europe’s top-performing economies.

If wholesale access prices were at a reasonable level that enabled alternative operators to compete, there would be more competition, more investment in educating the market about broadband, more choice for consumers, lower prices, new products and, ultimately, increased penetration of the technology over a shorter period of time.

The net effect is that few suppliers are investing in marketing the product and broadband penetration rates remain persistently low.

This low level of competition means the government’s directive to bring Ireland to European average penetration rates of 20% by mid-2005 is likely to be missed. In fact the target subscriber figure of circa 350,000 by June 2005 is likely to be underachieved by up to 50%.

This means Ireland will continue to lag behind its European counterparts unless steps are taken now to make the marketing of broadband in Ireland more attractive to other operators.

According to ComReg, the industry regulator, Eircom now retains 99% of the wholesale market for DSL broadband.

The company continues to acquire only a limited number of subscribers with little threat of competition because of high network access charges.

With regulatory and political will there is now an opportunity to decrease wholesale network access charges so as to open the market to viable competition.

Iain MacDonald
managing director, Perlico

DonegalMan

WOW!

At long last people are bieng told the real problems

dahamsta

eircomtribunal wrote:

Although 70% of the country is covered by broadband...

This is what happens when parasites like McRedmond are allowed propagandise in the popular press. The fact that Iain MacDonald is parrotting this garbage makes me sick. I certainly wouldn't buy off "Ireland's best value phone and Internet Company" if their boss is as clueless as this.

adam

damien

He got the coverage facts wrong, the rest of his letter was spot on though.

eircomtribunal

dahamsta wrote:

The fact that Iain MacDonald is parrotting this garbage makes me sick.
adam

You're attacking the wrong guy for the wrong reasons.

This 70% adsl coverage claim thing gets only questioned on boards and comwreck. All the Irish media, Doherty, Dermot have never ever questioned it. Only recently TIF's McCabe spoke of a 84% dsl coverage, on foot of figures supplied to him by Eircom.

It's our task to change that false perception, which was brought about with great skill, advertising money and bare-faced lying by Eircom's Nolan and McRedmond. We know now and can prove it, thanks to Garret's digging in the SEC filing, that Eircom were lying to the Irish public about the number of broadband capable lines.
If Nolan and Co had lied in the SEC filing, they could go to jail, that's why they preferred to lie to us.

Why can this happen? Why can they get away with it?
Eircom have very skilfully achieved and nurtured a public profile as the big and good Irish company, that is integral to Irish society. They enable the Eircom league and our weather, they sponsor the old and the handicapped, they bring us telephony and broadband.
The Irish public, represented be the media and politicians, can simply not see or notice or comprehend that director Nolan or director McRedmond of that mighty Eircom are lying about how they steal and destroy our network infrastructure and destroy Ireland's broadband future.

But the really worrying bit is that Comreg knew that Eircom did not have a 70% dsl coverage, did not have 1 million broadband lines, but it did nothing to stop the lies.

P.

dahamsta

damien.m wrote:

He got the coverage facts wrong, the rest of his letter was spot on though.

I don't disagree, and I certainly don't dispute what he says in most of the rest of the article. However let me turn this around: Would you buy off a company with a boss that didn't understand this critical aspect of the business, and swallowed the propaganda of a competitor hook, line and sinker? That's the point I was making.

Quoting that figure in that article is harmful. It shouldn't have happened, and MacDonald shouldn't have people making excuses for him, no matter how attractive his opinion. If McRedmond did the same thing, we'd tear him apart.

EDIT: Don't get me wrong, it's great to see his article and it's good for our campaign. However the people on "our side" should be subjected to the same standards as those on "their side". We can't have it both ways.

adam

eircomtribunal

dahamsta wrote:

a boss that didn't understand this critical aspect of the business, and swallowed the propaganda of a competitor hook, line and sinker?adam

The most critical aspect of the broadband issue for a competitor is the aspect Ian mentioned, namely the possibility to compete with Eircom and not to get margin-squezzed.
The 70% figure is the publicly accepted figure, of course caused by Eircom's lies, but we have to bring that part across first to the media.
Ian's 70% assumption is an indicator for us, but not a reason to attack him.
P.

spongebob

eircomtribunal wrote:

You're attacking the wrong guy for the wrong reasons.

This 70% adsl coverage claim thing gets only questioned on boards and comwreck. All the Irish media, Doherty, Dermot have never ever questioned it. Only recently TIF's McCabe spoke of a 84% dsl coverage, on foot of figures supplied to him by Eircom.

I explained in detail how it is mathematically impossible for Eircom DSL to cover more than 18.25% of the country by the end of the DSL installation program in March 2005 . That explanation is Here
.

The real figure will be slightly over 10% I make it.

McCabe probably pulled the 84% figure out of the same place that ..........:(

M

billy the squid

I see that my reference to Ireland offline was the only part of my letter which was removed,

http://www.boards.ie/vbulletin/showpost.php?p=1963416&postcount=12

still though it is a better response than I would have expected, although an article would have been nicer than just a few inches in the letters section.

Victor

Muck wrote:

I explained in detail how it is mathematically impossible for Eircom DSL to cover more than 18.25% of the country by the end of the DSL installation program in March 2005 . That explanation is Here

To be fair muck (a) it's 18.1% by area (=200*4.5*4.5*3.1415/70280) (b) he is possibly referring to 70% by population (the usual method of calculating market penetration which would of course be wrong also).