''the worst broadband in Europe'' - Eircoms Robert Topfer

zod

Eircom’s telecommunications network needs significant new investment as it has ‘‘the worst broadband in Europe’’, according to the new owner of the company.

Babcock & Brown (B&B) director Robert Topfer made the remarks in an interview published last week with reporter Rod Myer of leading Australian newspaper The Age.

The comments will come as an embarrassment to Eircom’s management team and its outgoing chairman Tony O’Reilly, who have repeatedly insisted that Ireland’s broadband availability is in line with its European neighbours.

See here for the full article in SB Post

jwt

And yet McRedmond can't break the habit of a lifetime and proceeds to contradict his boss while denying all.


John

DonegalMan

Similar story in today's Sunday Times with quotes from Damien Mulley and David McRedmond trying to contradict Topfer, including this classic:

McRedmond is unrepentant. “These (ECTA) tables are based on old data and we have moved on so much already. It’s not about tables anyway, it’s about customers being happy with the service and we have had excellent reaction from our product,” he said

Blaster99

Never mind McRedmond (he's supposed to lie), this has to be ComReg's worst nightmare. They've spun eircom's message for years and now some new guys are in power who have no reason to make up stuff to cover up past mistakes and this is going to make ComReg seem incompetent of the highest order.

SkepticOne

It looks to me like Topfer is pushing for a raise in line rental and/or tax-payer assistance to pay for sorting out their network. This will be easier if combined with a split between the wholesale and retail arms. A split would allow them to portray the network as a national network worthy of state funding upon which many companies (Eircom being just one) are dependent.

I think many people would be simpathetic to this view in principle although they may not be happy with the conseqences.

mike65

Another exellent article for IOFFL and Damien, once upon a time this story would have been buried away in the business section not given 2/3 of page 5 in the main news.

Mike.

Cryos

Blaster99 wrote:

Never mind McRedmond (he's supposed to lie), this has to be ComReg's worst nightmare. They've spun eircom's message for years and now some new guys are in power who have no reason to make up stuff to cover up past mistakes and this is going to make ComReg seem incompetent of the highest order.

I thought comreg make themselfs look incompetent anyway ?

Sponge Bob

McRedmond has had headhunters busy looking for somewhere to take him and B&B know this . They tried to put him in the frame for An Post but there was a surprising lack of enthusiasm everywhere for a post office with McRedmond in charge.

As his time in eircom is very limited he can say what he wants . He could be gone within a forthnight

Therefore I will not forensically dissect this particular LIE, told to the Sunday Times by McRedmond.

But David McRedmond, Eircom’s commercial director, denied Topfer’s comments highlighted a need for fresh investment from the new owners.

“Even six months ago you could argue the point, but I believe we have broken the camel’s back now,” said McRedmond. “There has been a huge investment and uptake in broadband in the past six months”

The new regime has made all the right noises to Noel Dempsey who has already put GBS3 on ice while he figures out what €€€ to give eircom before the next election .

damien

Sponge Bob wrote:

The new regime has made all the right noises to Noel Dempsey who has already put GBS3 on ice while he figures out what €€€ to give eircom before the next election .

And what a potential PR disaster that could be...

DonegalMan

damien.m wrote:

And what a potential PR disaster that could be...

Yep, I have a hunch that the Government may decide to do a deal with the 'new' eircom but I can't see it happening before the election.

probe

Now that B&B has got its hands on eircom, one wonders what Mr Topfer is going to do about it?

Eircom’s Australian equivalent (Telstra) is hardly a model – the fastest residential DSL broadband Telstra offer is 1.5 / 0.256 (d/u) Mbits sec with a 500 MB traffic limit, unless you pay extra!

“* Speeds will be slowed to 64 kbps after 10GB. Service may not be used for unauthorised purposes as set out in the acceptable use policy” – which includes online gambling.

Surely it is up to people what they use their internet connection for in a democratic country (excluding paedophilia, engaging in credit card fraud and similar matters)?

Give Ireland nationwide LLU on the same financial terms as France Telecom gives LLU in France Mr Topfer, if you want to silence critics.


probe

http://my.bigpond.com/internetplans/broadband/adsl/plans/default.jsp

1huge1

now its 85% of exchanges bb enabled :eek: what a load of bulls**t

well it seems that a lot of you will be eating your words about b&b because i remember a lot of ya saying that they were going to be even worse than eircom were

well from were im sitting it centainly dosn't seem that way

eircomtribunal

zod wrote:

Eircom’s telecommunications network needs significant new investment as it has ‘‘the worst broadband in Europe’’, according to the new owner of the company.

Mr Toepfer is simply not informed enough. Probably not reading the Irish quality newspaper, where we have the politically correct information about our broadband success:

Eircom making Broadband connection
Sunday August 6th 2006
NICK WEBB
EIRCOM is connecting 3,000 broadband customers a week, making Ireland one of the fastest-growing markets in Europe, according to new figures. Speaking after the company's second quarter results, Eircom chief executive Dr Phil Nolan said that it was on track to reach 300,000 broadband customers by the end of the month. Ireland could have as much as 25 per cent broadband penetration, when various cable, wireless andsatellite customers are added to all fixed line subscribers. Nolan is set to step down from Eircom following the completion of the company's takeover. He is "in discussions" about some other roles.

woaaa!
Our dreams got realised.25% broadband penetration!!! Mr Nolan, thank you. You've catapulted us to the top of the EU league tables! That's Ireland now on place three of the EU league tables, just behind the Netherlands and Denmark.
OECD top decile counties beware, Ireland has arrived!

P.

OSiriS

I wonder if this may be because for years Eircom insisted we didn't want broadband in Ireland.

eircomtribunal

There is another article about Toepfer going for an earlier split in the ST.

B&B's intentions with the split are quite simple. The'll intend to keep on to the safe flow of money from the network (15% profit on investment, when dealing with a gullible regulator; plus the additional and substantial regular banking/fee income B&B are renowned to integrate into the process when squeezing money from public utilities they buy up: A "separate" B&B vehicle looks after the dept/financing/advising/consulting side of the new Eircom-network and charges substantial fees from the network company. Eircom-network does not mind paying those "fees" to the other B&B entity, as it can be sure that the regulator will allow an extra 15% on the investment.)
Even a slight erosion of landline customers figures by the emerging "cellular landline" offers, of which Meteor will be one predator, does not make a difference: The regulator will allow a 15% profit on the network investment, irrespective of customer figures, leading to the high line rental, high WLR, high LLU rental staying in place or us getting even higher line rental. There were clear noises in this direction by Toepfer and Danone earlier on. (While there is a "natural" limit to further increases, the company may actually and secretly be pleased enough if the current level, one of the highest in Europe, stays in place.)

B&B can then do whatever seems most profitable with the retail including Meteor. Keep on, sell parts, sell off the lot.
P.

Sponge Bob

DonegalMan wrote:

Yep, I have a hunch that the Government may decide to do a deal with the 'new' eircom but I can't see it happening before the election.

It will have to happen before the election or Dempsey will never be a cabinet minister again. He is leading the <ahem> 'initiative' .

smellslikeshoes

Id say there is a lot of red faces in the government after that article. Admitting it is the first step now they need to do something about it.

1huge1

smellslikeshoes wrote:

Id say there is a lot of red faces in the government after that article. Admitting it is the first step now they need to do something about it.

sounds like something you'd hear from a AA meeting lol

Sponge Bob

1huge1 wrote:

sounds like something you'd hear from a AA meeting

Notg a peep out of the government about the done deal on the split either , especially the bit where Biddy gets Eircom Retail, OUTRIGHT which emerged in Oz the week before last if one recalls

I'd nearly prefer McRedmond to Con Scanlon........well nearly !

eircomtribunal

smellslikeshoes wrote:

Id say there is a lot of red faces in the government after that article. Admitting it is the first step now they need to do something about it.

Noel will have to add Mr Topfer, the new boss of eircom, to that list of enemies of the state, who damage the high tech image of Ireland abroad. We'll remember Noel's warnings: "I am concerned that some commentators overplay the so-called 'broadband failure' in Ireland. They risk unnecessarily damaging Ireland's international reputation."

P.

leoc

eircomtribunal wrote:

Noel will have to add Mr Topfer, the new boss of eircom, to that list of enemies of the state, who damage the high tech image of Ireland abroad.

Interesting, isn't it? Maybe it was just an outburst of bluff Australian honesty from Mr. Topfer. Or maybe New (New, New) Eircom have decided to drop their part of the Everything Is Fine act and shout about the awfulness of their own network to help pressure the gummint into a deal to improve things.

leoc

If B&B is quite keen on a split, why is M. Danon going around telling people it's undesirable? Is it some kind of tough cop/soft cop act, or are they having communication issues?

eircomtribunal

Nice coverage of the issue in the TMC Net website article by David Sims:

Eircom, the leading communications provider in Ireland, provides a full range of services from fixed wire and mobile telecommunications to broadband Internet. They'd do well to put as much investment into the quality of their broadband as they do their CRM, as a recent Sunday Times feature confirms that they offer "the worst broadband in Europe."

Eircom's new owners (the telecom was taken over recently) have admitted "yes, it does have the worst broadband service in Europe after all," according to the Times. That's the "considered opinion" of Robert Topfer, a senior executive with Babcock & Brown, the Australian company that has just acquired Eircom for €4 billion.

Topfer, global director of corporate finance at Babcock & Brown, was reported as saying the Irish network needed significant new investment as it had “the worst broadband in Europe."

Damien Mulley, chairman of Ireland Offline, a broadband lobby group, agrees: "This is probably Babcock & Brown sending a message to the management that are staying in Eircom,” Mulley told the Times. “I think they do have a commitment to bringing in broadband, but we’ll have to see. There needs to be a lot of investment.”

Eircom's former chairman, Cheerleader-In-Chief Sir Anthony O’Reilly, had told a recent company annual meeting of shareholders that broadband coverage in Ireland was “in line with the western European average and, unbelievably, ahead of the United States."

Unbelievable, indeed. The Times reports that the latest broadband scorecard from the European Competitive Telecommunications Association ranking western European countries according to broadband penetration levels places Ireland 14th out of the 15 old EU countries for the last quarter of 2005.

(Thank you, Greece.)

P.

eircomtribunal

Small Sunday Ttimes article on Babcock's "worst broadband" mutterings. With the correct assumption that B&B want to go for the separation, as it will suit their profits (to reap the reward for being regulated by a gullible regulator):

Splitting Eircom is a capital idea for B&B

BARELY had the keys of the house been handed over before Babcock & Brown started “dissing” former management at Eircom. Horrible wallpaper, grotty carpet, the worst broadband performer in Europe, says B&B’s Robert Topfer. Ouch.

The lads were really smarting at Eircom headquarters as the company had just posted its best figures on broadband take-up for some time.

And the irony is that Eircom’s performance in the sector was at its worst when owned by private equity. Ireland lagged behind Europe on broadband precisely because of the pace, rather than the extent, of recent investment. Unless Babcock can achieve the separation of the network and retail sides of the company, there is no great confidence that investment will increase.

Babcock says such a separation “might allow the network business to raise capital more easily to finance broadband roll-out”.

It will be easier to raise capital simply because the network will have a regulated and fixed return on investment. So it suits Babcock’s separation strategy to reinforce the idea that Ireland’s broadband is in the dark ages and the network urgently needs investmen

P.

Sponge Bob

But WHERE does this "fixed return" stuff come from??. Comreg have never reugulated on that basis and have never consulted on the principles of such regulation in Ireland.

Therefore B&B have no grounds to expect that this idea will work....or have they ??

eircomtribunal

Sponge Bob wrote:

But WHERE does this "fixed return" stuff come from??. Comreg have never reugulated on that basis and have never consulted on the principles of such regulation in Ireland.

Therefore B&B have no grounds to expect that this idea will work....or have they ??

Sponge Bob wrote:

But WHERE does this "fixed return" stuff come from??. Comreg have never reugulated on that basis and have never consulted on the principles of such regulation in Ireland.

Therefore B&B have no grounds to expect that this idea will work....or have they ??

There is a discussion of the "reasonable return through regulation" issue with regard to separation of Telstra here.
Without being able to point to any ComReg consultation, I think it is fair to say that allowing a reasonable (up to 15%, depending on gullibility of the regulator) return on investment is one of the cornerstones (of all regulators' and also) of ComReg's approach to price regulated segments. The issue is how to determine the size of the investment; there was this big dispute about Eircom's preferred calculation model and the regulator's. Ireland's exceptionally high line rental and LLU pricing are the result of this "reasonable return on investment" calculation. And the issue is how the investment is measured and about how dept ( more specifically the cost of servicing that dept) that B&B heap onto the network part is being dealt with. IMO the dept should not come into play really, as the investment is calculated as he cost of the network per se (we remember how ComReg went about to find the price of telephone poles with and without footrest etc.)
P.

Sponge Bob

But the EU framework demands analysis and regulation (if appropriate) of 18 sub markets.

These guys are trying to get Comreg to act according to broad Australian regulatory principles and in defiance of EU directives or so it seems to me.

Its not that a % figure along with certain other target metrics is not a bad idea in itself but with Comreg as regulator it will turn into a bad joke anyway like a fox dressing up as a hen everytime the henhouse is inspected by a very dopey farmer who only wants to see hens and will see hens no matter what ......even if there are no eggs being laid ever .

The other big spiel out of Oz is that all guarantees of anything from the new new new new new eircom are subject to the withdrawal of LLU , in its entireity .

1huge1

eircomtribunal wrote:

There is a discussion of the "reasonable return through regulation" issue with regard to separation of Telstra here.
Without being able to point to any ComReg consultation, I think it is fair to say that allowing a reasonable (up to 15%, depending on gullibility of the regulator) return on investment is one of the cornerstones (of all regulators' and also) of ComReg's approach to price regulated segments. The issue is how to determine the size of the investment; there was this big dispute about Eircom's preferred calculation model and the regulator's. Ireland's exceptionally high line rental and LLU pricing are the result of this "reasonable return on investment" calculation. And the issue is how the investment is measured and about how dept ( more specifically the cost of servicing that dept) that B&B heap onto the network part is being dealt with. IMO the dept should not come into play really, as the investment is calculated as he cost of the network per se (we remember how ComReg went about to find the price of telephone poles with and without footrest etc.)
P.

I thought irelands expensive line rental was down to them just simply being greedy and thinking they can get away with it, surely that plays a big part in the price no? whats the likelyhood of B&B reducing it

rogue-entity

So.. What exactly is the bottom line then?
Eircom has new owners, the same crowd that owns Telstra (telco notorious in oz for sh1te broadband *cough 1.5meg, 500Meg Limit... cough*
Eircom is going to want to push up the line rental (or at the least, keep it where it is) to invest into the network for the necessary overhaul it needs to provide better broadband and voice services) and/or do a deal with dial-up dempsey for some extra €€€.
Eircom may split into Eircom Network Wholesale and Eircom Retail. The former consisting of the network infrastructure such as it is, the latter eircoms telecoms and internet services.

Eircom network should have been treated more like the ESB national grid. A private company that is solely responsible for maintaining the local loop, their exchange equipment and their trunk lines. With no restrictions on third party operators from installing their own equipment in the exchanges for a reasonable maintainance fee, or for companies to buy the local loops to customers homes (LLU) and take over maintaince of the lines, therfore not having to pay line rental to eircom like the present situation. A fair line rental to be charged to customers for maintaining their lines and the general network to be paid to the line owner.

Okay so the above is really a pipe dream for now, but I can always hope cant I.

probe

rogue-entity wrote:

So.. What exactly is the bottom line then?
Eircom has new owners, the same crowd that owns Telstra

Babcock does not own Telstra – the Australian government does (with some external minority shareholders).

Babcock has no experience in the telecommunications industry, aside from employing someone to do a due diligence exercise on eircom!

probe

layke

I'll admit I haven't really been following this forum over the years but I do have a question to all ::

How many of you actually use Eircom? I switched to a wireless BB provider and use VOIP. No line rental, no cap, speeds could be better but still far superior to Eircom's service. I don't pay line rental and have absolutely nothing to do with the shower of ***** ever since this whole BB issue started and other companies started to muscle in on their monopoly.

The question is, do any of you really care what eircom does when in fact independent companies are expanding and will probably give a higher penitration rate.