Any Hope for a new fixed line service?

GEasy

So basically, since the NBS is a load of crap. With a new government do you guys think we will see a push for something half decent?

F Eamon Ryan and his clueless decisions !

/Rant

clohamon

LakesKeane wrote: »

With a new government do you guys think we will see a push for something half decent?

Not likely. The Labour policy document goes back to 2005 and is an engineering-free zone. FineGael's NewEra (broadband section) is a bureaucratic swamp. Both are vague about what to do with Eircom.

With the possible exception of Varadkar(Fine Gael) or Quinn(Labour) I don't see anyone who is bright enough or radical enough to deal with the inertia in the Department(*); unfortunately Varadkar himself is a free-market evangelist - ie; ideologically, exactly the wrong person.

* The Assistant Secretary of the Department at the head of the Communications Section has recently moved on. If that allows for some new ideas, there's some hope.

watty

Ignoring eircom is one reasonable strategy.

Another is forcing reasonable wholesale access to copper from street cabinet to house.

Also Ducts. Effectively eircom have taken ownership of ducts paid for by others.

clohamon

watty wrote: »

Ignoring eircom is one reasonable strategy.

Another is forcing reasonable wholesale access to copper from street cabinet to house.

Also Ducts. Effectively eircom have taken ownership of ducts paid for by others.

If you assume that some kind of state investment/subsidy will be required, I don't think you can ignore Eircom. So long as they're on the pitch (as a private sector infrastructure provider), the State can't get involved.

watty

Ah but that need not actually be the case.

clohamon

watty wrote: »

Ah but that need not actually be the case.

Explain.

watty

There could be some kind of legislation giving Ducts access. There is no reason at all why eircom takes them over.

The eNet could be expanded with all the telcos/ISPs taking a share, with government having 51% and then wholesale access for all ISPs to the national FTTC/FTTH network.

There are many possibilities. The least useful one is for eircom to do it or get money to do Fibre as they asked in the past.

The cost of a national LTE rollout is equal to Universal Fibre.
The increase in Eircom's debts since privatisation is twice the cost of Universal Fibre.

The only important eircom asset for Universal Fibre are road side cabinets and the copper pair from them to the house, usually short enough to support 30Mbps to 200Mbps from a Cabinet upgraded to fibre. The copper to cabinets from Exchange and the Exchanges are of almost no value to a true Universal Fibre/National true NGN.

If Everyone had a phone line, then on average the very best Exchange to Home technology via existing copper is going to be only 1Mbps for 10% to 20%, only over 18Mbps for 10% to 15% and on average 7Mbps to 9Mbps. Also nearly 40% don't actually have a phone line now because it's so expensive!

So forget DSL and exchange upgrades.

clohamon

watty wrote: »

There are many possibilities. The least useful one is for eircom to do it or get money to do Fibre as they asked in the past.

That's not really what I meant.

The point I was trying to make is that there is no business case for the investment - no matter who invests. That seems to imply that state aid is required.

The problem with Eircom is not that you have to give the money to them, but that while they are around you can't give it to anyone else either, nor can the state itself get involved in competing with Eircom because that also distorts the market.

The simplest thing to do is buy Eircom Wholesale. That deals with all the EU state-aid issues. We know roughly how much it cost STT; its probably worth less now.

watty

It's likely to make more profit than a same cost LTE rollout.

200,000 customers @ 20 Euro pm = 40M x12 = €480M revenue a year, maybe 20Billion to 25 billion revenue in 5 years, 40 Billion to 50 billion revenue in 10 years.

Running costs a fraction of LTE or DSL + Analogue POTS phone costs.
No expensive LTE spectrum Licence.
How long is the fibre going to last? The equipment is also cheaper to service and less likely to suffer damage than LTE base stations.

The Electricity bill for Universal Fibre is a fraction of 3G, LTE or existing Phone Network.

It's lack of vision, co-ordination, Government planning and ducts legislation and lack of venture capital. I don't believe it needs a subsidy.

clohamon

watty wrote: »

It's likely to make more profit than a same cost LTE rollout.

200,000 customers @ 20 Euro pm = 40M x12 = €480M revenue a year, maybe 20Billion to 25 billion revenue in 5 years, 40 Billion to 50 billion revenue in 10 years.

Running costs a fraction of LTE or DSL + Analogue POTS phone costs.
No expensive LTE spectrum Licence.
How long is the fibre going to last? The equipment is also cheaper to service and less likely to suffer damage than LTE base stations.

The Electricity bill for Universal Fibre is a fraction of 3G, LTE or existing Phone Network.

It's lack of vision, co-ordination, Government planning and ducts legislation and lack of venture capital. I don't believe it needs a subsidy.

Vision and capital come easier if you can control the market, which is why its better if its state owned.
In practice no one else has stepped forward with a proposal (AFAIK, apart from Eircom) You'd think they would, if they thought there was money in it.

watty

No-one else expects free money.
None of them will work together unless the Governement makes it advantageous.

clohamon

watty wrote: »

No-one else expects free money.
None of them will work together unless the Governement makes it advantageous.

Working together doesn't change the overall business proposition, it just divides up the loss.


And I'm not suggesting that Eircom is given money. I'm saying the wholesale division should be bought….either with the agreement of STT or not.
€130M gets you some network assets, a trained staff and a management team. More importantly, it deals with the State aid blockages so that there is then a way forward.

But there are other advantages.

• A substantial part of the regulators office could be stood down.
  
• The MANS can be rolled into the Nationalised Eircom network or the other way around.
  
• There is no need to go around begging for access to CIE, ESB, Bord Gais, Waterways Ireland, RTE, or the NRA; each with their own agendas, commercial mandates and different departmental reporting. (ie New ERA)

watty

STT are unlikely to sell.
What about the approx €4.5Billion debt? That would pay for 2x FTTH.

clohamon

watty wrote: »

STT are unlikely to sell.
What about the approx €4.5Billion debt? That would pay for 2x FTTH.

AFAIK the net debt is now about €3.2Bn. Granted that's still huge, but the interest is being serviced from earnings.

The question then, is can the balloon payments in 2014/2015 be rescheduled. If Eircom can show that they can continue to cover the interest, I don't see why they won't be allowed to reschedule.

Then there is Eircom Retail, Meteor and even e-mobile. Each would have to take their share of the debt in a separation of the wholesale division. So the debt related to Eircom wholesale, by itself, might be quite a lot less.

STT may not agree to nationalization but I don't think they can stop it. After that, it comes down to fair compensation. They bought the whole group for €130M and have not put in anything since, so it ought to be somewhere around that, possibly less.

watty

They will wait to burn bond holders etc as much as possible, reduce costs and debts as much as possible and then invest. Better to let them do it but force a true separation of eircom retail and wholesale. Afterwards.

IMO the only bit worth anything is the 5m to 200m from house to local cabinet. The rest of it in a FTTH/FTTC world is nearly worthless. Many of the eircom ducts are unusable because they used wrong kind of pipe and the old multipair copper can't be pulled out to feed in fibre instead between Exchange and Cabinet. Also with FTTH/FTTC you don't actually need an exchange, just another cabinet!

paulm17781

watty wrote: »

Many of the eircom ducts are unusable because they used wrong kind of pipe and the old multipair copper can't be pulled out to feed in fibre instead between Exchange and Cabinet.

This interests me. Do you have any examples / sources? Could you explain in more detail? Thanks

watty

If you use cheap pipes intended for liquid with time the outer plastic of the cable "welds" to the plastic of the pipe.

clohamon

Do you know how extensive the problem is ?

watty

No.