NTL to spend £200m on upgraded network

NTL Ireland last night promised to roll out rapidly a new £200 million (€254 million) network to Cablelink customers, with the company's managing director, Mr Owen Lamont, saying: "I can't wait."

In an interview with The Irish Times, Mr Lamont predicted greatly reduced telephone charges for customers and promised to create "hundreds" of new jobs.

"It's really exciting for us, it's really exciting for Ireland. To compete in the new millennium, what we need is an architecture that can handle fast Internet access. So the network that we will be rolling out will be principally doing three things: very fast Internet access, a complete alternative telephone service, and multi-channel television," Mr Lamont said.

He said no technology had taken off like the Internet, with demand for capacity doubling every 100 days. But that expansion had created online delays and bottlenecks, especially for domestic users.

"So when we have reengineered the network, customers, both residential and business, will be able to compete on a world stage," he added. "The second thing is that not only residential customers but business customers will have an alternative to Telecom Eireann. And I think the residential customers will find that particularly attractive."

In Northern Ireland, where NTL, operating as Cabletel, is rolling out a network and already has 63,000 customers, telephone calls between customers are unmetered and have just a "set-up fee" of 31/2p at off-peak times and for all weekends.

Mr Lamont said the company planned a similar move in Dublin: "I wouldn't want you to commit me to it, but you could draw that comparison. There are interconnection issues and switching issues, but I have every hope and expectation that we will do exactly the same in the Dublin area."

NTL has promised to invest £600 million in its infrastructure in Northern Ireland; Mr Lamont said it now had 63,000 subscribers north of the Border, and that this figure was rising at around 2,000 a month.

"Customers in the North have a choice of about 50 television channels, a brand-new, state-of-the-art telecommunications network, and high-speed Internet access," he said. "We can roll out ISDN speeds over our telecoms network, but the really interesting thing is that we roll out cable modems and digital cable to the television, remember, not some £2,000 computer that is out of date 10 minutes after you've bought it. You couldn't compare the speed to a 28.8 Kbps modem - it will be in megabits rather than kilobits per second."

He said NTL would roll out its network in Dublin aggressively, and that the investment would cost at least £200 million. Most if not all of Cablelink's existing copper pipeline would have to be replaced, he said.

"This is an asset that hasn't seen investment - and that is understandable. Why would Telecom Eireann invest in an alternative telephone company to compete with themselves?" he said. "Cablelink does not have a local switch, it does not have any telecoms infrastructure, so you are starting from scratch. We'll be placing orders pretty quickly for the stuff that we need, but six months from now we should start to see a really aggressive roll-out."

He would not comment on whether NTL would be interested in buying other cable companies, such as two that failed in their bids for Cablelink, Princes Holdings and Cable Management Ireland.

NTL also plans to create hundreds of new jobs, he added.

"We will be hiring people very aggressively. There are 260 people in Cablelink. With only 63,000 customers in the North, we have 400 people, so you can see that telecommunications adds a huge complexity to the business. There will be a requirement of - well, I don't know what the number is but it is certainly hundreds, and very quickly."

NTL would be recruiting workers with experience in designing and constructing networks, more general telecommunications experience, and call-centre and customer care staff, he said.

From a business point of view, he said, the figure NTL paid for Cablelink - believed to be £535 million - was reasonable.

"This is a truly exciting opportunity. Yeah, if you want a business to pay back in 10 minutes, then you wouldn't invest in the type of businesses that we're looking at. We're investing in businesses that are utility businesses, that have a lifetime in front of them."

He said the Internet, digital and multi-channel television, and the telephone represented three high-growth residential businesses. The construction of its own network put NTL in a strong market position.

"So yes, this [the payment for Cablelink] is a huge number, but it positions us as the second carrier in Ireland, in a slam dunk," he added. "The real question isn't why we paid so much, it's why the others bid so little and then bitched about it."