Ireland Communication Profile 2012

Ireland’s telecom market has suffered from poor broadband take-up, underinvestment and mismanagement among some of the key operators. Falling GDP since the beginning of 2008 has been compounded by the effects of the financial crisis and recession. This has hit the incumbent operator eircom particularly hard, with its parent company facing bankruptcy and eircom itself being sold to STT in January 2010. These factors will continue to have dire implications for the government’s efforts to improve Ireland’s telecom infrastructure into 2010.

Overall telecom market revenue fell by about 12% in 2009, year-on-year, dragged down by the poorly performing fixed-line, mobile and broadcasting sectors, the effects of the recession and also the lower consumer cost derived from a plethora of bundled products. There will be little relief for operators in 2010 or 2011 as the continuing effects of the economic crisis dampen consumer spend.

Nevertheless, the sector offers some hope of resilience in coming years, aided by government investment as well as the impending auction of 1800MHz and 900MHz spectrum aimed at stimulating the mobile broadband sector. The competitive nature of Ireland’s telecom market – with some 450 licensed operators – also bodes well for consumer pricing.

Fixed-line penetration has fallen steadily in recent years while mobile penetration has increased to the degree that by early 2010 about a quarter of households had a mobile but no fixed-line telephone service.

The number of broadband subscribers continues to climb steadily, but consumers are hampered by poor delivery and some of the slowest access speeds in Europe. This has also restricted consumer uptake of high-end services such as IPTV and VoD. Few advances are to be expected during the next few years, as little commercial investment has been allocated to fibre networks, leaving the principal fibre infrastructure to lie in backhaul.

Key Highlights

• · The mobile sector share in overall revenue has fallen steadily in recent years, reaching less than 45% by early 2010. This share is likely to drop further in coming years in response to regulated measures affecting roaming and interconnection tariffs, as well as competition among the triopoly of providers and the small number of MVNOs.
• · LLU for broadband access has grown slowly compared to other markets. Shared access has generally been favoured over full LLU. This trend may reverse during 2010 following the regulator’s decision to cut shared access wholesale line charges to less than a Euro (among the cheapest in Europe).
• · In common with EC policies, the regulator hoped to rejuvenate the mobile data sector by aiming to liberalise the current 900MHz and 1800MHz bands, making them available for 3G or compatible wireless services. Two of the MNOs’ licences expire in 2011 while the third expires in 2015. New licences to be awarded on a liberalised basis will provide operators with greater flexibility in their use of spectrum.
• · Mobile broadband subscribers using operators’ HSPA networks have been the largest contributor to overall broadband growth since the beginning of 2008. By early 2010 about 15% of all mobile subscribers were on HSPA networks. Although mobile broadband has earned a place in promoting broadband access, the pricing structure of mobile data services needs to be reduced in coming years to make them more attractive to consumers.

Broadband Market - Overview, Statistics & Forecasts
Ireland's broadband market is under-developed by European standards, although government efforts to improve local loop unbundling and wholesale access has meant that growth, albeit from a relatively low base, has been strong during the last two years. Low penetration has partly been due to high wholesale costs, lack of competition, high retail prices, and limited coverage in many non-urban areas. The proposed structural separation of eircom could have been a catalyst for rapid development in this market, but the global financial crisis affecting eircom's parent company, and its sale in November 2009, suspended further progress.

Convergence - Triple Play & Digital TV
The market for converged media and applications in Ireland has been hampered by poor broadband infrastructure. The position has become brighter since 2008 as the main cable operator UPC Ireland has upgraded its network, and as the incumbent eircom has invested in its NGN and expanded its bundled services offers. Nevertheless, convergence in Ireland continues to suffer from limited fibre deployment beyond a few greenfield sites.

Key Statistics, Telecom Market & Regulatory Overviews
Ireland's telecom market has suffered from poor broadband uptake, underinvestment and mismanagement within some of the key operators. Eircom has perhaps suffered most from the financial crisis which hit the operator's parent company, as well as the government's reluctance to part-fund its network upgrade. Eircom's sale and indebtedness are compounded by recurrent difficulties at Smart Telecom. Overall telecom market revenue fell almost 12% in the year to September 2009, dragged down by a poorly performing mobile sector and continuing economic turmoil.

Mobile Market - Overview, Statistics & Forecasts
Ireland's mobile market has undergone considerable changes in recent years. The market remains dominated by a triopoly of service providers, all of which provide 3G services, but the entry of the first two MVNOs promises radical changes to market competition in coming years. Mobile broadband, on the back of expanding HSPA networks, has become very popular among consumers since the introduction of flat-rate data plans. The regulator has also announced its willingness to set aside UHF spectrum for possible use by mobile TV services from 2010.