€2.6bn cost for next-generation telecoms network, says Tif

BUILDING A next-generation telecoms network will cost up to €2.6 billion, but the work must be done quickly so that Ireland is not left behind other countries, the Telecommunications and Internet Federation (Tif) has said.

The industry body, which is part of employers’ group Ibec, said a next-generation network had the potential to spur an economic recovery, but that the high cost of deploying the networks in Ireland “poses a significant challenge”.

Ireland’s competitors have accelerated their investment in next-generation networks, which typically consist of multiple platforms, including fibre connections, cable and fourth-generation (4G) wireless broadband.

A new report by Tif cites a study by consultants Analysys Mason, which estimates that the cost of a next-generation fibre network in Ireland would be around 50 per cent more expensive than BT’s next-generation broadband plan in the UK.

Ireland’s rural population spread makes the business case for widespread fixed access to next-generation networks less attractive than in other countries. This means wireless access is likely to be used to fill in the gaps.

Using a mixture of fibre and wireless access would cost €2.59 billion, according to Analysys Mason. Civil engineering work will be the main driver of the expense, with dig costs representing 65 per cent of the total.

However, flat average-revenue-per-user figures in the global telecoms market indicates that “the major investment needed to provide a step change in broadband capacity may not generate sufficient revenues to justify the expense”, its report notes.

“There is currently no indication that the Irish market will be any different,” it says.

“If the investment is to be made, which we believe it must, it is essential that network operators work together with content providers, the Government and the regulator to find a way to reduce and share the costs and risks,” said Tif chairman John McKeon, director of wholesale at Eircom.

Peter Evans, a product director at BT, who is also the vice-chairman of Tif’s next-generation broadband group, said there were other challenges that needed to be considered, including “aligning the business strategies of multiple operators in the market, competition challenges, declining revenues and the pace of technological changes”.