Eircom BB penetration is 80%???

watty

I was half asleep at 7:15 or so this morning h Nov 2004 listening to Eircom spokes man on RTE radio news.

Did I hear a figure of 80% BB avaliability?

Was he lying, talking about the future or some other country.

Anyone moore awake and clarify what was said?

vinnyfitz

This was an interview with Phil Nolan in the RTE Business News on the occasion of the (poor) Eircom half year results. The link to the audio file will be up a bit later on the RTE site.

He was proud of their 100,000 broadband connections and made a range of dodgy sounding claims about the importance of this success including that it was 6 weeks ahead of schedule!
He announced a new target of 500,000 sometime in 2007 and tried to make this sound like cutting edge.
He failed to respond when Robert Short of RTE asked about people "a stones throw from Stephens Green" not able to get broadband.

Leaving aside the usual moans about Eircom statistic abuse, what struck me about this interview is that the critics (that's us) have seized the agenda. Basically he was trying to respond to the analysis IOFFL offers. This is a very good thing.

damien

(See eircom's news release in the other thread.)

At the IT@Cork conference I noticed that eircom didn't say how good they are more than defend themselves on how poor they are. The same was happening at the eircom AGM. Sir Dr Mr Tony was defending himself and his company when it came to broadband.

damien

Dr. Phil on Morning Ireland this morning:

PRESENTER – JOHN MURRAY

I’m here actually at Eircom headquarters, Richard. The company’s interim results just published. The results show a pre-tax profit of nine million euro for the six months to the end of September. The company says the operating profit before restructuring costs and exceptional operating costs were up fifty-two percent to one hundred and twenty-eight million euro. And it says an interim dividend of five cent will be paid on seventeenth of December.

Chief Executive of Eircom, Philip Nolan, joins me now. Philip Nolan your assessment of these results?

PHILIP NOLAN – CHIEF EXECUTIVE – EIRCOM

I think another good solid set of results from Eircom. We’re delivering to plan that we set ourselves at the IPO. Profitability measures increasing. Quarter on quarter operating profit up twenty-nine percent. On the half year operating profit up fifty-two percent, so that’s good solid performance of the targets that we set ourselves on the IPO?

JOHN MURRAY

Not spectacular though?


PHILIP NOLAN

No, but the spectacular thing about these results is the fact that we set a broadband target of a hundred thousand customers, which we’ve reached six weeks early and that is a spectacular performance from a very low base and we’ve set a new target which we hope to reach in 2007 of five hundred thousand broadband customers and that really will transform the broadband landscape in Ireland. That would be… on a penetration of about thirty percent based on the per line measure that everybody uses, which we believe would put it at about the EU average.

On DSL penetration that would put us ahead of the EU average and, you know, Eircom’s going to deliver this, if other people deliver we can beat the EU average.

JOHN MURRAY

But how realistic is it? I mean there are probably houses a stones throw from here that… that don’t have the broadband capability.

PHILIP NOLAN

Well I don’t know about houses a stones throw from here that don’t have it, but we have said we have coverage of just over seventy percent of the country. We have said that that coverage ratio will go up to ninety percent of the country. I think if we work in… in partnership with the government we can push that to practically a hundred percent coverage. And you know these penetration figures, the big limiting factor here is if we get this penetration it will be about thirty percent of… of lines, but it’ll be around forty percent of households. And remember, PC penetration stands at just about mid forty percent, so the real thing to push this about is get PC penetration out there and push broadband.

JOHN MURRAY

Now that’s broadband. When is Eircom going to enter the mobile phone market?


PHILIP NOLAN

Well as we said mobile phone… mobile is a crucial part of our strategy, we’re committed to entering it. The timing, well that depends on how we can do deals with others, it’s not all in our own hands, but we are committed to entering it and we’re committed to building Eircom as turning it from a telephone company into a digital communication company of the future.

JOHN MURRAY

Is it a question of “piggy backing” on one of the existing networks, the Vodafone or O2 network? Or are you interested in buying a smaller operation like Meteor?

PHILIP NOLAN

Well I wouldn’t rule anything out. We’re interested in entering the mobile market. We think we can deliver choice and value to mobile customers and, you know, we won’t rule any option out.

JOHN MURRAY

Now the big revolution in the telephone business in recent times, in the fixed line business, has been the introduction of single billing and it’s estimated that Eircom has lost fifty thousand customers in the few months that it’s been in. Isn’t this a worrying trend?

PHILIP NOLAN

Well I mean… it’s not a trend that we’re happy about. But having said that with the introduction of… of competition we expected this and you know it’s not unexpected that people who are on CPS and have moved for their calls would follow that by moving their line for the single bill, after all that was the purpose behind introducing this thing, so I think it would be… it would be surprising if that didn’t happen.


JOHN MURRAY

But are people not voting with their feet to… to leave Eircom in their droves because they’re looking at the competitors offering and they’re saying its cheaper and don’t you have to respond to that?

PHILIP NOLAN

Well look I think … two ways of looking at everything… the vast majority of people don’t vote with their feet, the vast majority of people stay with Eircom and we deliver value to those customers and we’ll continue to do so.

JOHN MURRAY

Okay, Philip Nolan, Chief Executive of Eircom, thank you for joining us.

spongebob

damien.m wrote:

Dr. Phil on Morning Ireland this morning:

Dr. Phil "we set a broadband target of a hundred thousand customers, which we’ve reached six weeks early "

That is actually correct. Phil announced it around August 2003 and was proved correct........from an Eircom Wholesale point of view of course

Little pat on the back there Phil. Much more to do . I think that Phil has been looking at the future and greatly fears what he sees by 2007 ....especially 802.16e and 802.20 wot with no line rental and all that

M

jwt

Wireless, wimax, VoiP etc. Its' all nasty revenue cutting stuff.

Add to that people dropping landlines in favour of mobiles and VoIP when it takes off and remember we adopt new technologies fast here, and eircom's revenue streams start to look a bit pinched.

Throw in top of that the possibility of FIA forcing massive expenditure on the network (and they've already used that up as an excuse to get a line rent increase) and the situation starts to look a bit grim.

However if they suddenly saw the light and blitzed Ireland with ADSL everywhere, given Irish consumers reluctance to change, they could corner a significant share of the bb market.

Otherwise people will be forced to move over to wireless etc.

LLU, exhange acccess, leased lines etc will remain, but for how long?



John

seamus

Interesting how everything hinges on the action of others. Their pathetic "target" is reachable by 2007 "if other people deliver we can beat the EU average.", and as for entering the mobile market, "that depends on how we can do deals with others, it’s not all in our own hands". So despite eircom being in control of the infrastructure, somehow the success of broadband depends on others.

This one is full of holes. By 2007, their target will be well below the EU average in 2007, and their products will be blown out of the water by already emerging technologies. As far as I can see, it's a fluff soundbyte, because even eircom, incompetent as they are, can't possibly beleive this strategy is good for their bottom line.

mike65

http://www.rte.ie/rams/radio/latest/rte-morningireland.smil

Mike.

damien

Noel Dempsey and Bill Murphy are meant to be on 5-7 live in a few mins.

eircomtribunal

Dismal.
How can the minister of the DCMNR praise Eircom for this?
Muck, you were probably right about the man.

P.

SkepticOne

jwt wrote:

Wireless, wimax, VoiP etc. Its' all nasty revenue cutting stuff.

Add to that people dropping landlines in favour of mobiles and VoIP when it takes off and remember we adopt new technologies fast here, and eircom's revenue streams start to look a bit pinched.

This is why they are keen to increase their coverage. The last upgrade programme was announced shortly after the 3.5 gig licences were announced. So it looks like another 200 or so exchanges will be upgraded. By 90% "coverage", they don't mean that 90% of the population will be able to get broadband, but rather that 90% of people will be off exchanges that has a DSLAM. This is the way they have been using the word "coverage" recently (see the McRedmond interview of a few weeks ago).

This will be up from the 80% "coverage" or or so after they finish their current upgrade programme. If 30% fail normally on upgraded exchanges, then the announcement really means that about 7% more people will get DSL when the finish these new exchanges.

This may or may not be enough to prevent competing services but should be a major deterrent.

There is no point in Eircom themselves upgrading the remaining 1000 (I can't remember the exact figure) exchanges as this would cost a huge amount of money and would only increase their monopoly by a relatively small amount. However they have allowed the government to come in and fund them to do this:

I think if we work in… in partnership with the government we can push that to practically a hundred percent coverage.

Note that they are still using the word "coverage" here. This means that there will still be the 30% failure rate so we are talking of about 70% availability should the Goverment step in to prop up the Eircom monopoly.

This would not be a problem for Eircom. Remember they make much the same from an Internet user whether or not they provide broadband to them. The purpose is to deter competition. If they can deter competition, then they don't need to continually improve their services year after year and those that fail the DSL test can continue to pay them for ISDN and dial-up. This is the problem facing incumbents in countries like Sweden and Belgium. They are forced to provide more and more to the consumer. Eircom will obviously try to make sure that doesn't happen.

Throw in top of that the possibility of FIA forcing massive expenditure on the network (and they've already used that up as an excuse to get a line rent increase) and the situation starts to look a bit grim.

They wouldn't like this as it would mean improving infrastructure across the board rather than simply in areas where they are meeting competition.

But 7% more people able to get DSL. This is a good thing for the consumer in the short term.

spongebob

SkepticOne wrote:

By 90% "coverage", they don't mean that 90% of the population will be able to get broadband, but rather that 90% of people will be off exchanges that has a DSLAM. This is the way they have been using the word "coverage" recently (see the McRedmond interview of a few weeks ago).

See my comments about 80% below but remember that the smallest 500 exchanges in Ireland serve about 300,000 people combined. Comreg will tell yiz on friday.

SkepticOne wrote:

This will be up from the 80% "coverage" or or so after they finish their current upgrade programme. If 30% fail normally on upgraded exchanges, then the announcement really means that about 7% more people will get DSL when the finish these new exchanges.

80% , either now or in March 2005 at the end of the current upgrade program, is Absolutely Impossible . 80% of Irish people do not live within 4.5km of a DSL exchange ....of which there are 200. Peter showed this clearly in a post a month or two back . Only 60% of the population live in towns of over 1500 persons. The CSO calls these aggregate town areas when calculating the urban population of the state and they were exactly what was upgraded in the DSL rollout to date. A few small towns were added but their combined population would have been 10,000 persons max or 0.25% of the population . A slghtly clearer version of the same data can be found Here
and indicates that the 'next category ' is towns of 1000-1500 which will be the minimum announcement in the next round of Eircom upgrades. The next category again is towns of 500-1000 persons. Combined there are c.300-350 of these two categories. However, 1,300,000 persons Do Not Live In a Town with a Population of Over 500 Persons. . Some can undoubtedly be reached with a UK type line test out to 10km but not on our rotten decrepit overpriced copper they cant .

SkepticOne wrote:

This may or may not be enough to prevent competing services but should be a major deterrent.

The CDMA450 consultation is on and will lead to licences next year . 3.5Ghz is starting to motor. NTL has over 8% market penetration where they have upgraded their cable to support BB , frequently the phone line is scrapped at the same time. Dublin, Waterford and Galway are the NTL Cable areas and also produce much of Eircoms profit. Wimax will be finalised shortly. 100's of Mhz of spectrum is to be liberalised shortly between 5Ghz and 5.8Ghz . MANS clip off the top end. The government will no longer tender their services in a way that suits Eircom and produces wodges of profit. The EU commission is looking at the FIA situation already. I would worry about all this and move to counter it .

The publicans though the price of drink would just go up as they felt like it, they finally broke the camels back and sent turnover into a spiral ...... a lagged spiral. Eircom have noticed that there is a strong resistance to 'having a phone line' and that their rental income will go into the spiral stage very shortly.......but Why are they now offering free ISDN connections and free POTS connections and cheap PRI ISDN conections.....all of a sudden ?

SkepticOne wrote:

There is no point in Eircom themselves upgrading the remaining 1000 (I can't remember the exact figure) exchanges as this would cost a huge amount of money and would only increase their monopoly by a relatively small amount.

The uneconomic ones (now) are the ones with c.300 lines or less. They can do the rest and make their money back in about 2 years max. I cannot remember exactly how many have 300 lines or less but I think it is 500 or 600 . The other 500-600 (out of 1100) are unquestionably economic of which 200 are done. The next phase may be as many as 400 exchanges but is likely to be c.350 as I indicated above.

Do remember that ALL exchanges were uneconomic...according to Eircom....as late as 1999 . It is a moving target ....downwards and slowly moving downwards .

M

jwt

Muck wrote:

Why are they now offering free ISDN connections and free POTS connections and cheap PRI ISDN conections.....all of a sudden ?



M

Are they?

Missed that one, where did that come up?


John

spongebob

jwt wrote:

Are they?

Missed that one, where did that come up?

all over the homepage on www.eircom.ie at present.

Pots Promotion Flagged Here

http://www.boards.ie/vbulletin/showthread.php?t=196212&highlight=free+connection

ISDN Promotion Flagged Here

http://www.boards.ie/vbulletin/showthread.php?t=192149&highlight=isdn

M

jwt

Sorry Muck

Misunderstood completely

Thought you meant connections as in call connections.

Already have ISDN so none of it is any use to me


Thanks


John

vinnyfitz

From RTE this evening:

Dempsey won't divert broadband money
November 24, 2004 19:46

Communication Minister Noel Dempsey has said he is not willing to divert money from existing schemes to help Eircom to reach 100% broadband coverage.

Eircom had earlier said it could provide broadband availability to 90% of the country by March 2007, but it wants the Government to intervene to bring the final 10%, thinly populated rural areas, into the broadband picture.

Minister Dempsey told RTE radio, however, that he was willing to talk to the telecoms industry about a partnership arrangement for the last 10%.

He was speaking after Eircom set what it claimed was an aggressive target of having 500,000 broadband connections into Irish homes and businesses by the end of 2007.

Last month Minister Dempsey said the industry should reach the 500,000 customer target by the end of 2006.

Tonight, he said he welcomed any commitment from the industry, though Eircom's target was not as ambitious as the one he set.

Eircom this morning reported a 3% increase in first half core earnings and said it had signed up 83,000 broadband customers by the end of September - beating its target figure six weeks early.

Eircom said its adjusted earnings before interest, tax, depreciation and amortisation for the six months to the end of September came to €309m, compared to €300m the same time last year. Pre-tax profits were €25m, after a €3m loss a year earlier.

Operating profit, before restructuring programme costs and exceptional operating costs, rose by 52% to €128m in the six month period. An interim dividend of five cent has been declared.

Turnover for the six month period was down 3% at €802m, but Eircom said it had boosted operating profits due to lower costs. It took a once-off charge of €54m as headcount was reduced by 416 in the first half of the year.

Eircom said capital investment in the six month period amounted to €98m. It said this reaffirmed its target of €200m for the year.

Eircom had said in August that it was confident of meeting its target for 100,000 broadband internet customers by December. It said today that it had reached the 83,000 mark by the end of September and the number of broadband customers now stood at about 102,000.

'Today we are announcing a new target of 500,000 broadband customers by December 2007,' said Eircom's Chief Executive Philip Nolan. 'This is an ambitious target by any measure, but given our current momentum and with the appropriate support from Government and the Regulator it is achievable,' he said.

He said the company's determination to re-enter the mobile market remains undiminished.

Eircom shares closed up two cent to €1.69 in Dublin.

SkepticOne

Muck wrote:

See my comments about 80% below but remember that the smallest 500 exchanges in Ireland serve about 300,000 people combined. Comreg will tell yiz on friday.

80% , either now or in March 2005 at the end of the current upgrade program, is Absolutely Impossible . 80% of Irish people do not live within 4.5km of a DSL exchange ....of which there are 200. Peter showed this clearly in a post a month or two back . Only 60% of the population live in towns of over 1500 persons. The CSO calls these aggregate town areas when calculating the urban population of the state and they were exactly what was upgraded in the DSL rollout to date. A few small towns were added but their combined population would have been 10,000 persons max or 0.25% of the population .

I think you have grasped the point. Eircom's use of the word 'coverage' is misleading here. When they say coverage they mean the percentage of people with lines off an enabled exchange, NOT the percentage that can get DSL. In fact the figure, when they have completed their upgrade programme will be about 70% of 80% which is just over 50%. Eircom have admitted this When they talk about '90% coverage' they mean 70% of 90% total availability.

The CDMA450 consultation is on and will lead to licences next year . 3.5Ghz is starting to motor. NTL has over 8% market penetration where they have upgraded their cable to support BB , frequently the phone line is scrapped at the same time. Dublin, Waterford and Galway are the NTL Cable areas and also produce much of Eircoms profit. Wimax will be finalised shortly. 100's of Mhz of spectrum is to be liberalised shortly between 5Ghz and 5.8Ghz . MANS clip off the top end. The government will no longer tender their services in a way that suits Eircom and produces wodges of profit.

I think the importance of competition is begining to sink in. All these are great things. As JWT said earlier, these are what are driving further expansion of Eircom's DSL.

What Eircom are trying to do is get in their first so they can try to prevent such services taking off in as many areas as possible. This was the point I was making earlier, but thanks for illustrating it further.

Zith

Muck wrote:

Why are they now offering free ISDN connections and free POTS connections and cheap PRI ISDN conections.....all of a sudden ?

Perhaps to lock the poor souls into a 12 month contract during which time wireless\cable\etc become more available. So they keep them from the competition.

/Zith

eircomtribunal

Zith wrote:

Perhaps to lock the poor souls into a 12 month contract during which time wireless\cable\etc become more available. So they keep them from the competition.

/Zith

This is an important and often overlooked issue. 12 month is too long. One of the reason for the current high bb uptake is certainly the trial period of 2 or 3 month. In Germany the incumbent has a minimum contract length on its bb of 30 days. 12 month makes it very difficult for competitors in a market that is already legendary for the degree of immobility.
When Eircom opens an exchange for bb all the early adopters still their pent-up hunger for bb and are tied up for a year with the incumbent.

P.