Real villains keeping Ireland offline are not the Usual Suspects

bealtine

Sunday Tribune
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Real villains keeping Ireland of"ine are not the Usual Suspects
Conor Brophy

INCREDIBLY, using the internet became a majority sport in Ireland for the first time this year, according to a shocking study released by ComReg last week. Why did it take Ireland so much longer . . . the US reached this milestone seven years ago . . . to adopt a technology that other parts of the world have long taken for granted?

Usually, Eircom gets the blame. Usually, that's where the analysis stops. But other factors . . . from traffic congestion to a lack of credit cards . . . may be even more to blame than the dreaded former monopoly.

According to Limerickborn John Herlihy, Google's top man in Ireland, the ability to buy things on Amazon. com and other ecommerce websites lured many Americans online. In order to make Amazon work, however, there needed to be efficient systems to pay for items and to have them delivered quickly.

The US had a high proportion of people with computers, credit cards that made payment possible and secure, services like FederalExpress or UPS able to deliver faster than the postal service, and a road network that allow them to reach their recipients the next day. Amazon even offered to pay the shipping for orders costing more than $50.

Ireland is behind not just because Eircom has been slow to offer the high-speed pipes to the internet or let other companies do so, but because the other infrastructure deficits meant there were fewer reasons to want to be connected in the first place.

That may help explain what is surely the most surprising finding of the survey, carried out by consultants Amarach for Comreg. Asked why they didn't use the internet, more than 40% of those questioned said they simply had "no need for it".

Eircom spokesman Paul Bradley said more needed to be done both by industry and the government to raise awareness of the benefits to be derived from internet services. "We do see the need to continue to push relevance and demonstrate to people the value of it, " he said.

One Eircom initiative is the introduction of pay-as-yougo kiosks in shopping centres and other public locations.

So far it has installed 120 of these coin-operated machines at 51 locations around the country, which it hopes will entice users who don't yet have internet connections at home and, in some cases, may not have computers.

"At the end of the day there is still only 50% PC penetration. If only half the homes have PCs that's going to affect your [internet] penetration, " said Bradley.

"That is the key issue, " agreed Peter Evans, BT Ireland's product director. He believes that a lack of awareness of technology and a lack of adequate training in the use of PCs put a lot of Irish people off buying computers.

"It's definitely not a price thing. You can buy a computer for as little as 350. It's just fear of technology and lack of awareness of technology, " he said.

Evans said government has a role to play in alleviating that fear by investing more in community-based training programmes and trying to boost overall IT literacy, particularly among older people who were not exposed to computers or the internet during their formal education.

For younger people, weaned on social networking sites such as Bebo and Myspace and seduced by the power of the web to deliver music downloads and entertainment, the appeal is obvious. Bebo, for instance, claims to have over 800,000 Irish users, most of them under the age of 25.

Attracting internet users above "a certain age" has been more difficult in Ireland, a fact borne out by the research. It shows that 72% of under-24s using the internet, while less than half (44%) of those between 25 and 64 are internet users, and only 11% of people over retirement age.

Gary Power of advertising agency Saor Communications said the market for what are known as "silver surfers" remains untapped.

"They have no mortgages they don't have to work any more. They're pensionable and they are doing a hell of a lot more travel, " he said.

Power said a host of online businesses had much to gain from targeting the over-50s, provided of course that they can be convinced to connect in the first place. Power said services such as home-delivery shopping and online travel sites were obvious starting points.

For the businesses providing such services, however, there are inherent difficulties in operating in Ireland.

The lack of broadband internet services outside the main cities, and often even within them, continues to be a problem.

Indeed the Amarach survey, compiled from over 1,000 interviews with Irish consumers, indicates that one in three home internet users who have dial-up internet connections have applied for broadband and have been told by the company they contacted . . . in most Eircom . . . that it was not available in their area.

For internet-based businesses operating in Ireland there are more fundamental issues to deal with.

"The postal service, let's be frank, just isn't good enough and the prices are not competitive, " said John McElligott, managing director of Ebay Ireland.

He said that for an Ebay user to send a four-kilogramme package from Dundalk to Manchester would cost 33 through An Post. If the person were willing to travel across the border to Newry, though, it would cost just £7.50 ( 11.15). "A lot of our customers take a weekly trip, " he said.

John Herlihy, European director of online sales and operations for Google, said logistics in general are a huge challenge for e-commerce in Ireland. Herlihy said much of the debate around internet usage has centred on broadband availability but, for online retailers and other ecommerce businesses, there were more fundamental issues to worry about.

"I see other areas such as the ability to distribute goods efficiently and cheaply, particularly of Dublin, as a much bigger barrier to e-commerce. You can build advantages such as free shipping into offers in the US , where you have bigger population and scale, but it's much harder to do it in a market the size of Ireland, " he said.

THE UNUSUAL SUSPECTS:

Who's really to blame for Ireland being on the wrong side of the digital divide?

1. TRAFFIC It takes longer and so costs more to ship and deliver down Ireland's overcrowded roads, making e-commerce less attractive. In a survey out by an international shipping firm, Dublin ranked 19th out of 20 international cities, just ahead of Calcutta. It took 57 minutes to move a 5kg package five kilometres through Dublin traffic.

2. COMPUTERS Surprisingly, just over half of Irish people have a computer at home.

3 AN POST Shipping from the Republic can be three times as expensive as shipping from Northern Ireland. That's "not competitive", according to Ebay Ireland managing director John McElligott, another factor that has hindered the development of e-commerce.

4. ADDICTION TO CASH Cash usage in Ireland is more than double the European average, according to the Irish Payment Services Organisation, and credit card penetration is low. You can't use cash on the internet.

5. THE BANKS Irish banks make it harder to shop online by failing to offer debit cards that use the universally accepted Visa or Mastercard systems. Bank of Scotland will be the first, to be launched next year.

6. GOD We're an island. As Google's John Herlihy points out, building infrastructure such as distribution centres to support e-commerce operations is not viable for large players such as Amazon in a small market such as Ireland.

7. THE BRITS The fact that you have to convert from euro to sterling is a pain for many, and Britain looks unlikely to join the eurozone any time soon.

The currency exchange was cited in recent Amarach research as a barrier to Irish consumers buying goods from the UK, the nearest distribution hub for many e-tailers.

8. THIEVES Fraud continues to be a concern for many Irish consumers in their online endeavours. In a survey carried out as part of the Department of Communications' IT security campaign, only 39% of Irish consumers said they felt confident about using their credit cards online.

9 THE GOVERNMENT The migration of government services online has been ad-hoc.

Services such as the Revenue Online Service have been hugely successful. Others, such as the ongoing project to digitise land records in the land registry, have not been delivered as speedily as could have been hoped for. When 42% of non-internet users say they see "no need" for using the internet, clearly part of the reason has to be the lack of services that would benefit them.

10. THE LAWYERS Sorting out rights issues for music, video and other online entertainment content has proven unusually tricky in Ireland .

Apple's iTunes music download service, for instance, launched in the US in 2003, across Europe in 2004 but was not available in Ireland until 2005 because of a dispute over royalties with the Irish record industry. It could be worse; iTunes still isn't available in New Zealand.

Urban Weigl

I thought about this when the Irish government decided to introduce a €40 yearly stamp duty on credit cards. What better way to ensure more people get them? And that was shortly after the government was talking about getting credit card ownership up.

mike65

7. THE BRITS The fact that you have to convert from euro to sterling is a pain for many, and Britain looks unlikely to join the eurozone any time soon.

The currency exchange was cited in recent Amarach research as a barrier to Irish consumers buying goods from the UK, the nearest distribution hub for many e-tailers.

Is nonsense. The exchange rate with the euro has barely moved for months and has never moved nearly as much as against the dollar ($0.87c/$1.36c).

The critique of lack of credit cards and An Post pricing certainly has more credibility.

Mike.

damien

They forgot OJ Simpson.

watty

I recently saved 45% postage by getting a ebay package from England sent to N.I. instead of Republic. But the stamps & labels on th box showed it came via Dublin.

Indeed there is a very poor Internet infrastructure. So for example PCWorld/Currys/Dixons close Dixons in UK but not Ireland citing Internet access.

Hosting is more expensive for Irish business here than in UK or USA.

Amazon won't ship many items here due to WEEE.

US packages seem to go into Limbo for 7 weeks.

GLS trys to charge extra VAT, clearance and Customs charges.

A priority couriered package from US spends 3 days at shannon Airport.

Yes. Internet access is appalling, but there is also a real issue of what buiness and govermentment services will actually work via Internet here.

We order Pizza by phone. It should be easier, more accurate and faster by Internet. Tesco is online, but a poor experience and inaccurate product range compared with real shop. Also Potatoes might be on top of the lettuce or bread.


The currency thing is annoying, but not a major issue. I suspect that put in on principle. The UK should be reminded at every occasion on the stupidity of staying outside Euro. The Euro is hugely more successful than "naysayers" claimed.

wiredup

I would agree with much of the above but we must not be too hard on Ireland. Massive change has come to this country over the last 10 to 15 years but she still has a long way to go.

Some basic things need to be done and done first.
Firstly, split Eircom up and get braodband to 90% coverage.
Bring in Post Codes.
Build better transport links to the west of Ireland. A moterway from Dublin to Galway is the kinda thing.
Certainly drop the creditcard stamp duty. While I understand the reasons behind it, it's essential for online retail and no offense but the Laser thing is crap, go visa/master card debit.
Whip the banks into line. The banks here are ****.

bk

Oh, to add recently Customs has decided to stop all packages coming from Jersey/Guernsey/Isle of Man (effects the likes of play.com), looking for import duty, €5 admin fee and delaying packages for weeks.

watty

It might be GLS, rather than actually customs.

Ronan|Raven

Oh it is the Customs who are stopping all the packages.

Blaster99

Oh no, evil ol' GLS or customs enforcing customs legislation so that companies outside of EU don't get an unfair advantage. How dare they.

I bought something online in the US the other day. It arrived four days later with bog standard post. Anything I've gotten shipped with FedEx arrives the next day, which is quite impressive.

The problem with e-commerce in Europe is that it's very difficult to get decent shipping rates between countries. You need to get serious volume going before the shipping companies will give you a reasonable rate. In the US, for instance, this is not a problem.

Carbon Blob

bealtine wrote:

Sunday Tribune
5. THE BANKS Irish banks make it harder to shop online by failing to offer debit cards that use the universally accepted Visa or Mastercard systems. Bank of Scotland will be the first, to be launched next year.

I've tried searching but come up empty, does anyone have any further info on this? A MC/Visa debit card would make me seriously consider a switch to Bank of Scotland. I was in the states over the summer, and Wachovia handed me a Visa debit card straight off, no questions asked, when I opened a bank account, unlike here where you have to apply for a comparatively useless Laser (a couple of mates of mine have been refused ).

The ease with which you can get your hands on an MC/Visa debit card in the states has to be a definate booster to e-commerce, basically anyone with a bank account can start buying stuff online. Credit cards have a bit of a stigma attached to them in my opinion, so the lack of these debit cards is really hurting e-commerce in Ireland. It's a barrier to consumers, and an unnecessary one. You have to go out of their way to get something which you may not want in order to shop online, as opposed to the bank taking care of things and your ATM card having a little VISA mark on it allowing you to shop online. Laser is only used on a few websites, for the most part it's completely useless online.

It's really frustrating, online shopping is a great thing and as long as the market in Ireland is so small there will be hardly any stores catering to us, it's the chicken and the egg. People complain about rip-off Ireland a lot, and online shopping is a really good antidote to our sky high retail prices. Komplett is a good example, they're generally much cheaper than retail stores here but how many people just go to Dixons or PC World to get ripped off on computer hardware because they just don't know or care about online shopping? CDWow most of the time are cheaper than retail stores, and I can order DVD boxsets from the states and get them cheaper than I could in Dublin (shipping included).

Easily available MC/Visa debit cards, an agressive marketing campaign from Amazon.co.uk (or an Amazon.ie would do nicely) and free shipping for orders over a certain amount would do wonders for Irish internet penetration. Why does Laser even exist anyway, why didn't the banks just go with MC/Visa from the start?

Edit: I started off asking a question and ended up ranting a lot, sorry about that.

watty

Blaster99 wrote:

Oh no, evil ol' GLS or customs enforcing customs legislation so that companies outside of EU don't get an unfair advantage. How dare they.

I bought something online in the US the other day. It arrived four days later with bog standard post. Anything I've gotten shipped with FedEx arrives the next day, which is quite impressive.

The problem with e-commerce in Europe is that it's very difficult to get decent shipping rates between countries. You need to get serious volume going before the shipping companies will give you a reasonable rate. In the US, for instance, this is not a problem.

My experience is that ordering from Hong Kong, anywhere in Europe, Austrialia all faster than US mail, only Courier or express air mail post (both very expensive) work. US contacts complain the USPS is "broken".

GLS consistantly tries to charge customs clearance on intra EU and also duty on things that do not require duty. They are over zealous.

ON banks, it is nearly impossible to get an Irish bank to agree Mail order credit card when starting a small buisness and impossible for Internet eCommerce unless you are established.

So they hurt the consumer (lack of Visa style debit card) and the eShop (lack of ANYTHING).

joe_chicken

No. Eircom and Comreg are still the biggest culprits.

Just because our traffic infrastructure is crap doesn't mean we can take the blame off our crap Telecoms infrastructure

Blaster99

It's unlikely shipping costs matter as the main drivers are gambling, porn, and gaming. It's also unlikely demand is a problem. When it's all said and done there's an awful lot of English-language content on the Internet, so I don't think that excuse really works.

dahamsta

I blame IrelandOffline meself. Lazy shower of bastards.

thebman

That may help explain what is surely the most surprising finding of the survey, carried out by consultants Amarach for Comreg. Asked why they didn't use the internet, more than 40% of those questioned said they simply had "no need for it".

Heres what gets me. The I have no need for it excuse. So they run ads that say you can use broadband to download music and movies.

Why they hell aren't they advertising online shopping more and actually promoting that you can information about travel destinations and book everything online?

I mean I went to LA earlier this year and booked everything on expedia. I checked out what I'd do when I got there by checking out travel.yahoo.com which has user reviews of everything in LA pretty much including accomodation.

None of this is advertised, you can use it for music and movies. What idiot made that ad? That is useful but you can buy music and movies in shops so there is no need for the Internet for that. It is a little bit handier and probably cheaper (which they also never mentioned) but it can be done in shops.

You can't access a free online encyclopedia like Wikipedia or others without the Internet and you can't get that kind of detail on travel destinations very easily without the Internet. Also the revenue's site is good and being able to use that should be advertised more.

For older people how about the ability to buy your Tesco shopping online and delivered to your door now that the local shop has closed down because it couldn't compete? Or being able to deal with the banks online?

Urban Weigl

I second brim4brim's post. That ads about being able to "download music online" always struck me as being rather misdirected as well, as you can buy it in a shop, or indeed buy it on your 3G phone, without any need of the internet. No wonder so many people say they have "no need for it".

damien

Ah c'mon lads. It was a ComReg survey remember? The one that failed to ask any good questions. Would you honestly think that the numbers were that high?

lucernarian

Portugal has better broadband penetration or whatever yet there are language barriers for the Portugese to use the internet, along with having a rather small, for the E.U., domestic market. Delivery may be an issue in Portugal too, though I'd only guess at any differences there are between the two countries and in any case the article is highly focused on one agenda, if you will.

Any number of factors can be speculated on and targeted and guessed at, but you can only properly change the empirical things in the matter. I wouldn't trust a survey from ComReg, given what they are wont to do with surveys too. I'd like to see internet usage if computers were integrated properly into our education system. Most students in this country learn more about the internet from Bebo than they do from the computer class (if there is one).

And for every problem there is with transport hindering internet development, there is another aspect encouraging internet usage (teleworking, ease of use, avoiding cost of travel, paying the often higher price etc.).

Altreab

watty wrote:

Amazon won't ship many items here due to WEEE.

This article in TheRegister.co.uk regarding WEEE and how its been implemented here in Ireland

1huge1

wow interesting read
but the main ones you have to admit are eircom and being poor for so long so older people not used to change (something along those lines)

jwt

Like any problem there isn't one single cause but a multitude. The key item is to identify the largest issues and tackle them rather that waste time fixing an issue that contributes 1% to the cause.

IMHO the table of causes would look something like this

percent issue
45% GOV (DCMNR, Comreg, Competition Auth. etc)
35% Eircom - Note 2 years ago this would have been top of the list and about 80%
10% Education (schools, ads etc)
5% cost
5% ecommerce, shipping etc


Funny how Google located in Dublin because of comms issues specifically they were worried that in a more rural area say Tullamore, their staff wouldn't be able to remote into work. I wonder did they misread the commute issue?

I've noticed a few times that Google has deliberately shied away from blaming any Gov departments for anything. Do no evil? Or don't rock the Corporation Tax Boat?

eBay are located in Blanchardstown, again they refused to locate away from Dublin.

uncle_sam_ie

jwt wrote:

Funny how Google located in Dublin because of comms issues specifically they were worried that in a more rural area say Tullamore, their staff wouldn't be able to remote into work. I wonder did they misread the commute issue?

I've noticed a few times that Google has deliberately shied away from blaming any Gov departments for anything. Do no evil? Or don't rock the Corporation Tax Boat?

eBay are located in Blanchardstown, again they refused to locate away from Dublin.

I wonder if anyone applying to any of these companies for a job would be at a disadvantage if they were unable to avail of BB at home.

Marshie

bealtine wrote:

"The postal service, let's be frank, just isn't good enough and the prices are not competitive, " said John McElligott, managing director of Ebay Ireland.

He said that for an Ebay user to send a four-kilogramme package from Dundalk to Manchester would cost 33 through An Post. If the person were to travel across the border to Newry, though, it would cost just £7.50 ( 11.15). "A lot of our customers take a weekly trip, " he said.

What is this idiot ranting on about? Why compare the cost of sending a package from Dundalk to Manchester with the cost of sending a package from Newry to Manchester? Without wanting to start a political debate Newry and Manchester are both part of Britian. So the mail is taken care of by the same Post Office i.e. the Royal Mail. They cannot charge more for mail from Northern Ireland so it the same price to send a package from Newry to Manchester as it is from Manchester to Manchester. In other words those sending packages long distances within the country are subsidised by those sending packages short distances.

It costs the same to send a package from MAnchester to Dundalk as it does the other way. In fact Mr. McElligott would find that if he tried to send a 4kg package from Manchester to Dundalk via Royal Mail he wouldn't be able to unless it was printed material. The Royal Mail won't deliver packages over 2kg. However An Post place no limits.

Having lived in the US for a number of years I would say that An Post is far superior to the US Postal Service. And An Posts prices are the same as the Royal Mail so why does Mr. McElligott feel that the prices aren't competitive?

As for service not being good enough Mr. McElligott should take a long look at PayPal before throwing stones.

thebman

Well I don't know why An Post has come up again in Ireland Offline (postcodes thread).

I think An Post do provide a good service and I've never had any problems with them. I'm sure there are people who have. I'm also sure and aware that they have problems behind the scenes that could do with sorting out but as a customer of An Post, I have to say I've always found the service good and affordable.

Altreab

Originally Posted by jwt wrote:

Funny how Google located in Dublin because of comms issues specifically they were worried that in a more rural area say Tullamore, their staff wouldn't be able to remote into work. I wonder did they misread the commute issue?

I've noticed a few times that Google has deliberately shied away from blaming any Gov departments for anything. Do no evil? Or don't rock the Corporation Tax Boat?

eBay are located in Blanchardstown, again they refused to locate away from Dublin.

Some OffTopic Stuff
They would also have been concerned about things like international access via airports and the quality of the electricity supply. The entire Electricity supply in Ireland is under a LOT of pressure with more than one major town very very close to blackout every winter. Signs of this is in loads of "mini blackouts" lasting from a few seconds to a couple of minutes such as has been happening to parts of Galway city recently.
In fact ESB have admitted that in some parts of the country the electricty supply is so poor that they wouldnt be able to guarantee power to "modern industries" like Telesales and Serverfarm operations. They have named West Galway and Donegal as 2 such areas. Until services like Electricity, Communications, Roads and airports are of equal standards nationwide most of the companies like Google E-Bay Paypal ect will ALWAYS move into the Dublin area, and if i was a director of those companies i have to say i would too.
Thankfully the roads situation is been sorted slowly but surely. This will open up the options of business using airports like Shannon and Knock Airports a lot more.
But the Electricity and Communications is not been dealt with properly at the moment. Comreg was and is a disgrace. ESB is working to improve but the planning process is killing every attempt they are making to improve the situation along the west coast.
Rant mode OFF

watty

The roads have had a lot of mispent money, and west of MountRath they are not sorted. M50 is nighmare because of bad planning creating situation of more local traffic (Blachardstown Liffyvalley etc) for something supposed to be a bypass. It was on the radio this morning: No evidence of Cost/Benefit analysis on Road Expenditure.

So:
1) Maybe 1/2 the money on roads wasted.
2) 1/10th of what is wasted would completely give universal Broadband access.
3) Even Luas money might have been better spent on more buses (contentious).
4) Still no decent public transport outside Dublin.

thebman

Soon (or probably more correct, now) we are a high cost economy (for wages, services etc..) with crap services and no infastructure. Its a miracle the economy is growing IMO.

Foxwood

Marshie wrote:

What is this idiot ranting on about? Why compare the cost of sending a package from Dundalk to Manchester with the cost of sending a package from Newry to Manchester?

If you want to set up your own business selling goods online, do you think you'll make more profit from the 30 million people online in the UK, or from the 1 million online in Ireland (totally off the top of my head numbers, but the proportions probably aren't that far off)?

The cost of shipping goods to customers is higher from Dundalk than it is from Newry, simply because far more of the customers are in the UK than in Ireland - especially for the eBay "single market" model, which tends to blur geographical distinctions (despite the existence of .ie and .co.uk sites).

The sad part about this article is that it has generated rather more comment that most threads in this forum, despite the fact that none of this should come as a surprise to anyone who reflects on the state of anything 'net related in Ireland. (I seem to recall making many of these points 10 years ago in posts on usenet, before bords.ie existed).