Formus hopes for speedy expansion of Internet access

As far as Formus Communications' chief executive Mr Osmo Hautanen is concerned, the infamous "last mile" - in telecommunications industry jargon, the network link between your home or business and a telecommunication provider's exchange - is little more than an unpaved, pot-holed access road to the information superhighway.

At the moment, he said, the big networks are getting faster and more efficient as high quality fibreoptic cabling takes over from yesterday's aging copper-wire telephone networks. But few businesses have seen fibre come to their front door and, given the cost, the rest of us are unlikely to any time soon.

"We're in a situation where we have a 10-lane highway ending in a dirt road," said the Finn, in Dublin last week to meet the Taoiseach and the growing team at Formus Communications Ireland. The company, a joint venture between Formus and Dublin-based European Access Providers (EAP), last month won one of the government licences to deliver broadband wireless Internet access initially to businesses but, they hope, eventually to consumers.

Formus is a small but feisty player in the rapidly-consolidating international telecommunications market, and aims to grow by moving fast and supplying networks using whatever technology suits a given market at a given time.

The four-year-old telecommunications company is going after what it described as "selected global markets" for its broadband data networks - telecommunications networks that transfer large volumes of data, including images, sound and video, at high speed. At present that means Europe and Latin America, and most recently, Ireland. Formus recently shed its US division because stepping away from the crowded US telecommunications market "allowed us to focus on Europe," said Mr Hautanen.

"Why Europe? Because that's where the business is."

Pointing out the 12 to 18-month developmental time lag between the US and Europe, he believes now is the time to stake out territory as the demand for Internet access grows.

Intel certainly seems to agree. As part of its continuing moves into the networks space, the giant chipmaker took an undisclosed stake in Formus in September. Intel is particularly interested in Formus's positioning in the Polish market, where the company is building out broadband Internet access networks to small and medium-sized businesses (SMEs).

In the Republic Formus has a licence to offer broadband wireless access in 15 cities - initially Dublin, Cork, Galway and Limerick. Wireless Internet access, which uses radio transmissions to transfer data rather than wire or fibre, is capable of very fast transmission speeds of up to 622 megabits per second.

The advantage of wireless networks in the Irish market is that they can be up and running very quickly - in days or weeks, not months or years, because businesses only need to install a satellite dish-like antenna on their rooftops. The dish is then wired into the company's local area network and receives signals from a broadcast station. In contrast, fibre can take months to lay, and other promised technologies for broadband access, such as cable modems and ADSL (asymmetric digital subscriber line, a technique for boosting data transfer speeds on regular copper wire networks) are still off in the vague future, according to their potential providers.

Formus said it is within days of securing a lease for its central Dublin facility and determining an equipment supplier. Formus Ireland chief executive Ms Terri McNulty said the company will be testing its network in Dublin by January with a commercial rollout in spring. For businesses, the connection is charged at a flat rate and is always on.

While unwilling to talk figures, the company says its pricing will be competitive within the market. Mr Hautanen also believes the technology is "future-proof" because capacity can easily be increased if customer demand grows. And, capacity can be upped without having to dig to lay new cable, making Formus "the telecommunications company that doesn't tear up your roads". At least, not for the moment - Formus will be quick to embrace and provide other forms of broadband access if demand is there and the company has the right licence to provide them, he said.

While Mr Hautanen is greatly impressed by the pro-technology attitude in the State, two things would impress him even more - access to the "last mile" copper wire connections into households, still the domain of Eircom; and to receive a narrow-band licence as well. Both would enable Formus to bring high speed Net access to consumers rather than just SMEs, he says (narrow band broadcasting costs less for a variety of reasons).

In the meantime, Formus is clearly eager to get its own particular show on the road and expects an onslaught of bandwidth-hungry companies.

"We almost can't fail because the market is so ready," Mr McNulty said.