A survey has found that high-speed uptake continues to be slow and that one in five firms with Net connections do not even understand what broadband is, writes Karlin Lillington.
One of the most comprehensive surveys of the use of telecommunications technologies by companies in the State has reaffirmed that Irish companies are broadband internet laggards and that telecoms market competition continues to stagnate.
Broadband uptake in the Republic not only continues to be slow, but one in five companies with internet connections do not even understand what broadband is, according to the extensive report by analysts IDC Ireland.
In a survey of information technology managers at 327 organisations in the Republic, IDC found that 20 per cent of companies that said they had a broadband internet connection actually had a dial-up connection, while 23 per cent of those with ISDN connections also believed they had broadband.
ISDN is a dial-up technology that is speedier than regular modem-based dial-up access but far slower than broadband access methods like DSL, cable modems, or leased lines.
The study also revealed that, despite increased focus on the need for greater competition in the telecommunications market, the vast majority of Government organisations now use incumbent Eircom as their provider - 91 per cent. A year ago, the total was 67 per cent.
"Irish companies tend to be behind the curve," said Mr John Gilsenan, IDC Ireland analyst and author of the report. He said the lack of awareness of what broadband is was "even more disheartening" as it showed that Government support for the use of broadband was "a message that isn't getting through". A whopping 49 per cent of Irish companies surveyed still use either dial-up (19 per cent) or ISDN internet access (30 per cent).
Only a third of users in each category expected to switch to a different access method in the coming year.
Some 29 per cent of companies use a leased line connection, 8 per cent use some form of DSL, with cable modems or wireless access the choice of just 1 per cent each. A handful of other methods completes the picture.
The survey follows on the heels of a Chambers of Commerce Ireland study which revealed that two in five small to medium-sized companies that tried to upgrade internet connections in the past year could not, due either to cost factors or lack of the desired service in their area.
Esat/BT managing director Mr Bill Murphy said he believed the high cost of wholesale DSL - the price other operators pay to Eircom to use their network exchanges to offer their own retail DSL service - was retarding competition in the Irish market.
"If you look at what is happening in the Northern Irish market, there are 55 operators offering broadband in addition to BT," he said, because BT's wholesale price is £12.50. In the Republic, where Eircom charges €27 for wholesale DSL, there are effectively two - Eircom and Esat/BT.
Technology industry figures who have pushed for the need for speedy broadband growth in the State expressed disappointment at the findings of the studies.
Dr Chris Horn, co-founder and chief executive of Iona Technologies, was "surprised and disappointed" at the low knowledge levels about broadband, especially as it did not bode well for turning the State into a knowledge-based economy.
"It's difficult to lay the blame. Of course, the situation can be addressed but it does need leadership, and right now, it's all just so bleak," he says. "We need leadership not just with broadband but across a range of [technology infrastructure] issues for creating sustainable growth. Right now, it's very difficult to see where new jobs are going to come from."
"We have a broadband blight," says Mr Rory Ardagh, managing director of LEAP Broadband, a wireless broadband provider. LEAP is going after the corporate leased line market, hoping to woo companies off leased lines to less expensive wireless access.
Mr Ardagh says the high cost of wholesale DSL, the desire of incumbents to hold on to dial-up traffic income, the high cost of "backhaul" - the domestic network that competing operators must pay Eircom and BT/Esat to use - and a reluctance by either Eircom or BT/Esat to lose a lucrative leased line business to DSL or wireless access has stalled competition.
He also pointed to the "disjointed campaign" in the Republic to encourage companies to move to broadband. "It's interesting that people don't seem to have copped on that broadband can save you money, for example."
The Chambers of Commerce Ireland study estimates that 60 per cent of businesses would save cash by moving to a broadband connection. In contrast, Invest Northern Ireland runs a broad media campaign across print, television and radio to educate companies, he said.
Mr Gilsenan noted that the figures from the IDC study revealed the need for an educational programme targeting Irish businesses, which he believes should be undertaken by Government and industry.
Eircom managing director Mr Philip Nolan complained to an Oireachtas committee earlier this year that the State had not promoted broadband adequately or created enough services online that would help promote its use. These circumstances made it difficult for Eircom to make a case for broadband to consumers or businesses, he said.
Esat/BT's Mr Murphy acknowledges that, in the wake of IDC's findings, industry as well as Government needed to work to educate businesses and consumers about broadband.
But he says that both telecoms regulator ComReg and the Department of Communications had further work to do in opening up the market to competition.
The listlessness in the broadband market "raises a whole host of issues," says Mr Gilsenan. "You've got the uptake problem and you've got an educational problem. At least Government and industry can immediately address one of those: education."
And that needs to happen fast in order to promote uptake, says Mr Ardagh.
