It’s all about connections as Irish users take the digital lead

We have better web access, more devices and are spending more online as the digital economy takes off


How much is your internet connection worth to you? According to a new study, the average person would have to be given €130 to compensate for giving up their broadband at home. That’s about €100 more than the average monthly broadband bill, giving a general idea of how important the technology has become to us.

Work, leisure, education, spending – it’s all done online. Businesses can be more productive and are becoming more positive as a result.

Retail sector

Ecommerce is revolutionising the retail sector. Mobile services are offering increasingly higher data speeds too as next-generation mobile services are rolled out throughout Ireland. And as smartphones and tablets become increasingly popular and our lives ever more linked online, the value people put on their broadband connection is probably going to increase.

It’s all happened in relatively quickly. Less than 15 years ago, most Irish households were stuck with dial-up internet connections, with “always on” broadband a far-off dream. When broadband services arrived, they were expensive for the average consumer and limited in where they were available.

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But a report this week by entertainment and communications company UPC on Ireland's digital future shows just how far we have come.

It’s the second time UPC has issued such a report; the initial research was unveiled in 2012. That report made a number of predictions – some that were probably obvious conclusions – including the increase in online spending and a pick up in broadband speeds.

“Internet usage in Ireland is growing rapidly. Consumer bandwidth and content requirements are growing constantly. Ireland ranks highly among the world’s most digitally advanced economies,” said UPC Ireland’s chief executive Magnus Ternsjo.

“The country performs well within the average standards in Europe for internet adoption and well beyond the average standards for higher internet speeds.”

It seems that things have changed at a slightly faster pace than anticipated, particularly when it comes to how much the internet can benefit Ireland and its economic growth.

UPC’s latest report shows that Ireland’s digital economy is set to be worth €21.1 billion by 2020, up from a projected €8.4 billion this year. The latest figures, almost double what the sector was worth to the economy two years ago, show that the digital economy is on track to reach the €11.3 billion that the previous UPC report estimated it would be worth by 2016.

Consumer spend

Back in 2012, UPC’s initial report predicted that consumer spending online would reach €5.7 billion by 2016. The updated research shows that we have already breached that figure two years ahead of schedule.

Consumers will spend €12.7 billion online by 2020, up from €5.9 billion this year. And that will create 150,000 jobs, either directly or indirectly, which is good news for the economy too.

“Since our 2012 report, we have seen real progress as Irish consumers, entrepreneurs, investors, the private and the public sector respond to the new opportunities that are presented by digital technologies,” UPC said in its report.

Part of that could be attributed to how the infrastructure has developed in the intervening years. Broadband speeds in particular have taken a leap in the past couple of years.

More than 44 per cent of Irish homes can now get broadband with a top speed of 200Mbps, up from 50Mbps in 2012, according to the report, and 68 per cent of people are happy with their broadband service.

The popularity of video-streaming services such as Netflix and on-demand video services from pay TV providers, such as Sky and UPC, is providing impetus for this.

Investment from operators over the past few years has yielded benefits. Not only does UPC offer its own "fibre powered" broadband to the home, but Eircom has also got in on the act. That added infrastructure has allowed the telecoms incumbent to offer its own TV service, eVision, which it launched last October.

Quad play

That made Eircom the first operator to offer quad-play service – broadband, landline, mobile and TV – to Irish consumers, although UPC is set to follow suit when it launches its anticipated mobile service in the near future.

ESB, meanwhile, is set to start rolling out its own fibre infrastructure, which will bring fibre directly to the home, instead of just to the cabinet.

It was revealed last July that ESB was planning the network, which will involve a €400 million investment, and in February, Vodafone was named as its preferred partner to roll it out.

We have yet to see any definite deals, but with ESB intending to operate the network on a wholesale basis, the potential benefits for internet access around the State are huge.

Irish users intend, it seems, to make the most of those high-speed connections. When it comes to internet-enabled devices, Irish users are outstripping the competition, with an average of 4.7 devices connected to their home network. That compares with an average of 2.6 devices in Germany.

Improved connection speeds make us more generous, it seems, and the faster our internet connection is, the more likely we are to share our wifi password with friends and family when they come to visit.

It’s interesting to note that rather than be a follower, Ireland has already moved ahead of the rest of Europe in some aspects of the digital economy – at least, according to UPC’s research.

Thirty per cent of Irish adults now have access to broadband speeds of more than 30Mbps. That’s above the EU average of 18.2 per cent, and up from 10 per cent here in 2012. “The landscape is more competitive as more broadband providers have now entered the market providing consumers with a wider range of choice of providers and services,” UPC said.

‘Digital future’

Things are picking up pace, but there are still some things of which we need to be aware. “While Ireland’s economic fortune has turned a corner for the better in the past two years, we cannot afford to take anything for granted,” UPC said. “We have to plan and work for the future that we want. The same is true for our digital future.”

Online shopping, for example, still goes outside the country, with only 40 per cent of web shopping kept here. And half of shoppers still do their research in real-world stores but pick up products cheaper online.

Although that has come down from 58 per cent in 2012, it’s a still worrying trend for retailers who are losing out to suppliers abroad.

But it’s not just the digital economy that is being affected by digital devices.

“Family life has been transformed by the emergence of multi-screen patterns of behaviour,” UPC said. “Meanwhile our working lives have witnessed a blurring of the boundaries between business and personal spaces, in terms of time use, location and even devices.”

Work-life balance

Although most people view that as a positive thing – they can work from home to a greater degree than before, with half saying their work-life balance had been improved – there is still a minority that feel it has affected them negatively.

About 15 per cent said they disagreed that technology had been positive for their work-life balance. How many times have you checked your email at home, or been sucked into working late hours because an important email just had to be dealt with straight away?

There are other things to consider too. Privacy has become a hot topic, fuelled by revelations of government spying programmes and intelligence agencies taking advantage of a society more willing to put information out in public.

People are rowing back on what they are willing to divulge as they realise their digital footprint is not only something that can be easily accessed, but could follow them around for some time.

The recent European Court of Justice ruling in a case against Google on the right to be forgotten may go some way to assuaging those fears, but with the information still available online, its impact can only be limited.

But overall, the shift to a more digital life is being viewed as a positive thing. “The more that a society is exposed to, and the more it uses, digital technologies and services, then the more concerned that society will be about becoming increasingly digital,” the report said. “It is a virtuous circle that can contribute to improved levels of growth, prosperity and wellbeing for society and the economy.”