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Eircom Eyes Return to mobile market

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  • 04-03-2004 1:09pm
    #1
    Mr_Man
    Registered Users Posts: 638 ✭✭✭


    On the RTE website is an article about Eircom's possible return to the mobile market. One paragraph makes interesting reading

    The flotation document also lists a number of potential risks to the company, including increasing competition, the slowdown in fixed-line growth and the possible need for substantial investment. It also warns about the risks from decisions made by the regulator.

    I would have thought that any decent company would have looked at investment as part of the cost of doing business and not a risk. As for any adverse impact of decisions made by the regulator, unless they plan to operate in the UK they don't have too much to worry about on that score.

    M.


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    #2
    crawler
    Registered Users Posts: 1,660 ✭✭✭crawler


    Hmmm...

    Their status has been downgraded to Junk bond status
    A recent report says they are the most vulnerable telco in Europe

    On a return to mobiles - always on the cards once the non-compete clause ended - MVNO or maybe a purchase........

    They are worried about the competition on the Broadband front too - and I dont blame them....

    IF the IPO does not go well ( strange that has not come up before?? ) for them , I would worry for the future.

    As for the comments on regulation - what would you expect coming up to an IPO :) They dont want any nasty surprises coming up to that!


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    #3
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    According to newspaper reports, Valentia have been marketing Eircom to potential investors as a 'utility' with fairly secure revenue streams. They can point to the fact that they have a near monopoly on line rental and despite this, were able to get regulatory approval push to double the EU average through a series of hikes.

    However, this sort of thing would not go down well in Ireland. I suspect they are feeding the more cautious aspects of their prospectus to the media here.


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    #4
    DMT
    Closed Accounts Posts: 1,669 ✭✭✭DMT


    Please excuse my ignorance of business studies, but suppose eircon were to go belly-up - would that be a good time for the government to renationalise it or at least the part that owns the exchanges, local loops etc?


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    #5
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    Originally posted by DMT
    Please excuse my ignorance of business studies, but suppose eircon were to go belly-up - would that be a good time for the government to renationalise it or at least the part that owns the exchanges, local loops etc?
    It would be a good time definitely to do it, but whether it would happen would be iffy.
    More than likely the retail arm would be torn apart and sold for scrap, but the wholesale arm would be sold to the highest bidder/biggest brown envelope, with infrastructure intact. Without the infrastructure, the wholesale arm cannot exist.

    Tbh, that would be a case where the Government could not win. If they bought it back, there'd be millions of tax payers complaining about the Government paying for it twice. If they let someone else buy it, there'd be millions of tax payers complaining about Government inaction.


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    #6
    crawler
    Registered Users Posts: 1,660 ✭✭✭crawler


    Absolutely correct Seamus - it would not be good for Government or the tax payer.

    But that said the Government would protect the Company , for obvious economic reasons and I dont think anyone would argue with that :)

    eircom will pin hopes on fixed revenues - there will be a steady decrease in fixed line telco revenues to mobile and VoIP providers..

    What would scare me if I were an investor would be :-

    The high cost of line rental - for a line with a decreased real value ( mobiles etc )
    and related to this the increased competition in Broadband.

    They may dump wholesale in favour of a MVNO or something like that but as there is no model to follow here that is also a risk....look at how hard Meteor has found it to gain market share as a full operator.

    I dunno - only guessing here!


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    #7
    Da Man
    Closed Accounts Posts: 193 ✭✭Da Man


    On the other hand, Eircom can keep prices a lot higher in this country than similar companies can in other countries, so it would be a relatively good investment you'd think.

    I would guess that their line rental hikes will do them more damage than good though, because there comes a time when people just cancel their line and Eircom not only loses line rental revenue but also call revenue. If I were the government I would negotiate a deal with a mobile company so these vunerable people who's line rental they pay get a pay-as-you-go mobile phone that costs €10 over 6 months or whatever it is these things cost. The next few weeks would be a great time to make noises about that...

    Those of you harping on about nationalisation obviously never experienced Telecom Eireann. Governments should never run businesses, they just become overbloated and unionised/inefficient. The solution is a proper regulator and/or cable companies or WISP's that are able to deliver services. The mobile companies could also offer fixed telephony over GSM at a competitive cost if they wanted to.


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    #8
    Mr_Man
    Registered Users Posts: 638 ✭✭✭Mr_Man


    I believe that the Government have agreed that people who are entitled to support for phones can use it for either mobile or fixed line. This was announced a few weeks back but I'm not sure what the details are, or if it is actually working yet.

    M.


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    #9
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by DMT
    Please excuse my ignorance of business studies, but suppose eircon were to go belly-up - would that be a good time for the government to renationalise it or at least the part that owns the exchanges, local loops etc?
    This would be the best time, but the wrong thing for the Government to do. Eircom was just as crap under Government control.

    What is needed is the ending of Eircom's near monopoly situation. If the Government bought Eircom it would then be against their interest to have this situation come about.

    Almost all Eircom's value lies in its continuing monopoly. Replacing that monopoly with today's technology would cost far less than buying Eircom's rusty wires and would render Eircom worthless.


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    #10
    shoegirl
    Registered Users Posts: 2,018 ✭✭✭shoegirl


    Originally posted by seamus
    It would be a good time definitely to do it, but whether it would happen would be iffy.
    More than likely the retail arm would be torn apart and sold for scrap, but the wholesale arm would be sold to the highest bidder/biggest brown envelope, with infrastructure intact. Without the infrastructure, the wholesale arm cannot exist.

    Tbh, that would be a case where the Government could not win. If they bought it back, there'd be millions of tax payers complaining about the Government paying for it twice. If they let someone else buy it, there'd be millions of tax payers complaining about Government inaction.

    Not entirely true. Look at the example of Railtrack in the UK. Investors were badly burned there too, not to mention the knock on effect of years of mismanagement onto other rail operators and subsequently commuters. Eircom's total monopoly is a huge problem - you cannot get more than a 100% market share and particularly in the line rental market they have everything to lose. I think Valentia are disposing of eircom at a profit before it becomes a big liability.

    As for broadband Global Crossing, ESB etc also have broadband interests. Also if rental works out for some of the smaller operators (which it more than likely will) they will enter the market. Energis and C&W have Irish presences too.


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    #11
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Originally posted by shoegirl
    As for broadband Global Crossing, ESB etc also have broadband interests. Also if rental works out for some of the smaller operators (which it more than likely will) they will enter the market. Energis and C&W have Irish presences too.

    Which is all fine and dandy, but that doesn't resolve the main problem we have had in Ireland for years - eircom's strangehold of the local loop. Personally, I also remain entirely unconvinced of the capability of wireless local loop technology as a replacement for eircoms network for a number of reasons both technical and other.

    Dismissing eircoms network of 'rusty wires' is dismissing our best hope for widespread decent broadband coverage. Wireless should ideally be a complementary service that picks up for the relatively few people where broadband can't be provisioned over the phone network due to distance from exchanges or poor lines. It shouldn't be the other way around as wireless technology alone simply wouldnt be able to cope with widespread take-up of broadband around the country.


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    #12
    BigEejit
    Registered Users Posts: 3,739 ✭✭✭BigEejit


    If a WISP did a deal with a mobile phone company so that customers could get broadband wirelessly and a mobile phone with one bill to pay for it all people would flock to them ....
    Didnt I read that over in the UK there is a system that allows you to make calls on your mobile cheaply (similar to fixed line rates) if you are in your house but at normal rates elsewhere? ... I think that a product like that would sell like hot cakes...


    But even as it is, a lot of people will go for wireless broadband if its cheap enough - and then people will be questioning that ~€50 bill every two months for the same bit of copper that they paid for in taxes to be put there in the first place .... as has been said, get a cheapo ready to go mobile and throw some credit at it once in a while and you get the same use as the landline for a fraction of the cost (provided that you dont normally make a load of phonecalls)


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    #13
    spongebob
    Closed Accounts Posts: 6,143 ✭✭✭spongebob


    Originally posted by BigEejit
    But even as it is, a lot of people will go for wireless broadband if its cheap enough - and then people will be questioning that ~€50 bill every two months for the same bit of copper that they paid for in taxes to be put there in the first place .... as has been said, get a cheapo ready to go mobile and throw some credit at it once in a while and you get the same use as the landline for a fraction of the cost (provided that you dont normally make a load of phonecalls)

    About 30% of customers pay more in line rental that than they do in calls. Thats a lot of recurring revenue if they dump their landlines.

    M


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    #14
    BigEejit
    Registered Users Posts: 3,739 ✭✭✭BigEejit


    Normally my calls always amount to less than €10, sometimes less than €5 ..... thats more than whats allowable for the vunerable user scheme isnt it? .... the main reason that I have a landline is for my broadband ... both me and the missus have mobiles and we make ALL long distance with CPS to a different carrier ... a couple of local and national calls (and to be fair, the only reason we use the landline for that is because of the speakerphone we have, very convenient) ...
    All in all, I feel EXTREMELY annoyed every time I see that light blue fucking envelope :mad:, I get the "BOLLIX, I've just been diddled out of money" feeling pretty bad .....


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    #15
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by Moriarty
    Dismissing eircoms network of 'rusty wires' is dismissing our best hope for widespread decent broadband coverage. Wireless should ideally be a complementary service that picks up for the relatively few people where broadband can't be provisioned over the phone network due to distance from exchanges or poor lines. It shouldn't be the other way around as wireless technology alone simply wouldnt be able to cope with widespread take-up of broadband around the country.
    I think behind this post there's the underlying assumption that one entity has to make all the technology decisions for a countries communications needs e.g. "dsl for built up areas, wireless for remote areas", etc.

    In fact, the big problem has been this one entity situation. It doesn't matter whether it is Eircom, the government, the regulator. The reason it is a problem is that, at the end of the day, these entities will always be looking out for themselves, not the user of the services.

    We have seen already Eircom under government control. It was just as crap as the current one. There is no going back to that situation.

    None of the current problems with Eircom would have occurred if people had the opportunity to completely ditch Eircom. The government should be active in bringing this situation about.


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    #16
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Originally posted by SkepticOne
    I think behind this post there's the underlying assumption that one entity has to make all the technology decisions for a countries communications needs e.g. "dsl for built up areas, wireless for remote areas", etc.

    In fact, the big problem has been this one entity situation. It doesn't matter whether it is Eircom, the government, the regulator. The reason it is a problem is that, at the end of the day, these entities will always be looking out for themselves, not the user of the services.

    We have seen already Eircom under government control. It was just as crap as the current one. There is no going back to that situation.

    None of the current problems with Eircom would have occurred if people had the opportunity to completely ditch Eircom. The government should be active in bringing this situation about.

    Perhaps i was unclear, apologies. There wasn't any underlying assumption, I was just saying things like i see them. I think that if people have the choice of the exact same broadband product delivered either (a) over dsl/cable or (b) over wireless that >90% will jump for the wired option for the simple fact that it's easier and cheaper to install. There will be the minority where dsl/cable isn't suitable for a range of reasons, so wireless could be another option for them.

    True none (most) of the current problems with eircom would have occured if people had the chance to switch infrastructure, but I think that you're putting too much faith in wireless technology. It's beset by as many problems as wired solutions and isnt anywhere near as scalable a solution as a physical local network can be.

    Due to the nature of wireless it also inevitably leads to one of two situations. (1) Spectrum is allocated by the likes of comreg to a select few operators, which introduces another sector ripe for cartel-style behaviour due to the 'local loop' once again being held in a small group of private hands. (2) Spectrum is opened up entirely so that anyone can use it for anything within reason, alà the 2.4ghz and 5.2ghz ISM bands at present. The problem here is that - as has been seen with numerous users of IrishBroadBands services - severe disruption to their services happens, without the ISP having any recourse. When its an open frequency band, the ISPs have to accept any interference that occurs - guarenteed minimum service levels simply cannot ever be guarenteed. Your connection might work fine for months but all of a sudden it could be totally useless and no isp will be able to do anything more than shrug their collective shoulders.


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    #17
    shoegirl
    Registered Users Posts: 2,018 ✭✭✭shoegirl


    I think the main problem with eircom was that it was privatised before unbundling took place - this has been the cause of so much grief with regard to BB, flatrate etc.

    Its not that long since eircom deliberately witheld ALL DSL services in protest at not being permitted to deliver other digital services over it. The problem for eircom now is that its locked into a permanent state of lose-lose as it has to have its hand forced to do anything by Comreg as they have everything to lose.

    Even in the UK Mercury were operating alternative lines and also some cable operators long ago. The government really should have split up eircom into constituent and/or regional companies.


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    #18
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by Moriarty
    True none (most) of the current problems with eircom would have occured if people had the chance to switch infrastructure, but I think that you're putting too much faith in wireless technology. It's beset by as many problems as wired solutions and isnt anywhere near as scalable a solution as a physical local network can be.
    But no matter what you do, you have to spend more money as things scale up. Eircom's local loop, if anything, suffers from the biggest scalability problem of all. What happens when you want to increase the speed significantly. You will run into the barrier of the signal carrying capicity of the wire. The only way to get around this is to either rip out and replace the old wires or put DSLAMs on every corner.

    There is no way, if you were starting from scratch, that you would lay individual copper wires out to homes. Eircom's network was designed when no technology existed to do otherwise.

    I'll now move on to your remaining concerns:
    Due to the nature of wireless it also inevitably leads to one of two situations. (1) Spectrum is allocated by the likes of comreg to a select few operators, which introduces another sector ripe for cartel-style behaviour due to the 'local loop' once again being held in a small group of private hands.
    If this was the case, why did the first WISPs in Ireland seriously undercut Eircom, why didn't they go into a cartel with them?

    If you feel that spectrum can only be allocated to a select few, then look at the other mainstream broadband technologies. Why aren't you worried about cartels forming over Eircom's bitstream? Isn't cable even worse - only one operator in any given area?

    And where are you getting the "select few" from? 11 operators applied for the 3.5 gig licences, some of whom had only a very minor presence in Ireland. And 3.5 gHz is only one of many potential bands.
    (2) Spectrum is opened up entirely so that anyone can use it for anything within reason, alà the 2.4ghz and 5.2ghz ISM bands at present. The problem here is that - as has been seen with numerous users of IrishBroadBands services - severe disruption to their services happens, without the ISP having any recourse. When its an open frequency band, the ISPs have to accept any interference that occurs - guarenteed minimum service levels simply cannot ever be guarenteed. Your connection might work fine for months but all of a sudden it could be totally useless and no isp will be able to do anything more than shrug their collective shoulders.
    This is a bit of a "straw man" argument. The only reason operators used this shared band is because it was available and equipment was fairly cheap for the band. You are using a particular circumstance in an attempt to prove a general point.

    If no shared bands had been allocated you would not be able to use this in your argument, yet the fundamental advantages and disadvantages of wireless would be unchanged.


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    #19
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Originally posted by SkepticOne
    But no matter what you do, you have to spend more money as things scale up. Eircom's local loop, if anything, suffers from the biggest scalability problem of all. What happens when you want to increase the speed significantly. You will run into the barrier of the signal carrying capicity of the wire. The only way to get around this is to either rip out and replace the old wires or put DSLAMs on every corner.

    To upgrade every exchange to offer 2mbit dsl would cost very little. To build out the infrastructure to offer everyone covered by the phone network 2mbit over wireless would cost an absolute fortune. You also forget to mention that wireless has much more of a problem wrt signal capacity than a wired network does.

    True once you want to increase speed past a few mbit youll start to need to upgrade/replace parts of the phone network, but this is going to be done at some point in the future anyway. Fibre is future proof, it only needs to be laid once.
    Originally posted by SkepticOne
    There is no way, if you were starting from scratch, that you would lay individual copper wires out to homes. Eircom's network was designed when no technology existed to do otherwise.

    Copper, probably not. Fibre, quite possibly. A physical infrastructure is the ideal solution to providing comms services, wireless isn't.
    Originally posted by SkepticOne
    I'll now move on to your remaining concerns:If this was the case, why did the first WISPs in Ireland seriously undercut Eircom, why didn't they go into a cartel with them?
    Your memory seems to be failing you, the first WISPs did. Leap priced their services very similarly to eircom's dsl prices of the time. Only IrishBroadBand have significantly lowered prices.
    Originally posted by SkepticOne
    If you feel that spectrum can only be allocated to a select few, then look at the other mainstream broadband technologies. Why aren't you worried about cartels forming over Eircom's bitstream? Isn't cable even worse - only one operator in any given area?

    Eircom's bitstream dsl network is provided on a national basis, with any telco allowed to gain access to the entire network if they have the cash. It's not the ideal solution by a long shot, but it's getting there. Cable is far worse but then again it's more or less irrelevant in Ireland, there are only a handful of people that can access broadband services in the first place over their cable connections.
    Originally posted by SkepticOne
    And where are you getting the "select few" from?

    A max of 4 companies in any particular area were given 3.5ghz spectrum. One of these spectrum allocations is worthless for providing broadband connections, due to the size of it. That leaves three possible companies per regional area/county that are allowed to offer services over 3.5ghz.
    Originally posted by SkepticOne
    11 operators applied for the 3.5 gig licences, some of whom had only a very minor presence in Ireland.

    Only seven of which were offered and accepted licences.
    Originally posted by SkepticOne
    And 3.5 gHz is only one of many potential bands.

    It's one of the best bands though. I don't see comreg prepairing tenders for other bands at the moment or for the forseeable future either.
    Originally posted by SkepticOne
    This is a bit of a "straw man" argument. The only reason operators used this shared band is because it was available and equipment was fairly cheap for the band. You are using a particular circumstance in an attempt to prove a general point.

    On the contrary, it's far from a straw man argument. Any future unregulated band similar to the current 2.4ghz and 5.2ghz bands will suffer from the same problems that I layed out above. The fact that WISPs have been using it - and some will continue to use it as their sole transmission medium - is entirely relevant.
    Originally posted by SkepticOne
    If no shared bands had been allocated you would not be able to use this in your argument, yet the fundamental advantages and disadvantages of wireless would be unchanged.

    These ISM bands are allocated on an international basis, that's why they have come into such widespread use. These same shared bands are what a number of WISPs are going to be relying on to supply their services over for quite some time to come, so it's entirely relevant to the provision of broadband over wireless.


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    #20
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Moriarty, before I deal with some of your points, I is worth going over some possible points of agreement.

    1. Regardless of what equipment is used, Eircom's copper network is of limited value going forward. Copper has a limited signal carrying capacity.

    2. Renationalising Eircom would not solve the basic problem of monopoly.

    3. Competition is necessary to create a dynamic market where the consumer is in charge.

    Where we differ appears to be the choice of where the Goverment, if it chooses to combat the monopoly, should put its money.

    Now to those points in detail.
    Originally posted by Moriarty
    To upgrade every exchange to offer 2mbit dsl would cost very little. To build out the infrastructure to offer everyone covered by the phone network 2mbit over wireless would cost an absolute fortune. You also forget to mention that wireless has much more of a problem wrt signal capacity than a wired network does.
    In fact, every eircom exchange is already upgraded to 2mbit speeds. The equipment in Eircom's exchanges can operate at 8mbit/sec. Eircom simply throttle the max connection speed down to 512k for the 512k service.

    Someone asked in another thread whether Eircom could, instead of halving the contention ratio on their 54 euro product, instead double the spead and keep it at 48:1. They could indeed do this and it would cost them absolutely nothing. No extra bandwidth would be required.

    There are two reasons they don't do this. One is that they have to protect their premium business market. The other is that fewer people would pass at this speed.

    In Sweden, the incumbent uses a form of DSL with a max speed of 26Mbit/sec. However the actual product they supply goes from 512k to 26Mbit/sec depending on how far you are from the exchange. You are only guaranteed a 512k basic connection speed.
    True once you want to increase speed past a few mbit youll start to need to upgrade/replace parts of the phone network, but this is going to be done at some point in the future anyway. Fibre is future proof, it only needs to be laid once.
    With regard to upgrading the phone system, you say "but this is going to be done at some point in the future anyway".

    This goes against all experience with the incumbent to date. If they were happy to have the country on extortionate metered dial-up and ISDN in the year 2002 raking in the money despite its effect on the economic welfare of the country, what makes you think they will happily spend a fortune ripping out the existing infrastructure to replace it with fibre, effectively giving everyone a fibre leased line?
    Copper, probably not. Fibre, quite possibly. A physical infrastructure is the ideal solution to providing comms services, wireless isn't.
    Maybe. This is the point you are trying to argue.
    Your memory seems to be failing you, the first WISPs did. Leap priced their services very similarly to eircom's dsl prices of the time. Only IrishBroadBand have significantly lowered prices.
    Leap, however, do provide a symetrical lower contention product than Eircom and unlike Eircom's entry level DSL (at the time) with which it was similarly priced, had no cap.
    Eircom's bitstream dsl network is provided on a national basis, with any telco allowed to gain access to the entire network if they have the cash. It's not the ideal solution by a long shot, but it's getting there.
    The problem is that its not getting there. Other countries are moving ahead rapidly. We're still stuck in 512k land (for those lucky enough to get it).

    The reason for this problem is that although plenty of companies can pay Eircom to provide DSL on their behalf, Eircom retains a monopoly over speeds and contention ratios and the wholesale price. Although these other companies can shop around for international bandwidth, they are forced to limit what they can provide in terms of speed and contention to that deemed appropriate by the monopolist. Although, strictly speaking, it is not a cartel, to the consumer, the effect is pretty much the same. A bunch of companies with undifferentiated products at similar prices.

    Outside competition is necessary to deal with this situation.
    Cable is far worse but then again it's more or less irrelevant in Ireland, there are only a handful of people that can access broadband services in the first place over their cable connections.
    I agree that cable is an unlikely source of future competition in Ireland. We must look elsewhere.
    A max of 4 companies in any particular area were given 3.5ghz spectrum. One of these spectrum allocations is worthless for providing broadband connections, due to the size of it. That leaves three possible companies per regional area/county that are allowed to offer services over 3.5ghz.
    However if they do enter the market, Eircom will experience a level of competition unprecedented in their history.
    It's one of the best bands though. I don't see comreg prepairing tenders for other bands at the moment or for the forseeable future either.
    You may be correct, however you may like to provide some evidence to support this. Did you forsee their granting of the 3.5 gig licences in the first place?
    [On the 2.4 gig band being irrelevant to the general feasibility of wireless]On the contrary, it's far from a straw man argument. Any future unregulated band similar to the current 2.4ghz and 5.2ghz bands will suffer from the same problems that I layed out above. The fact that WISPs have been using it - and some will continue to use it as their sole transmission medium - is entirely relevant.

    These ISM bands are allocated on an international basis, that's why they have come into such widespread use. These same shared bands are what a number of WISPs are going to be relying on to supply their services over for quite some time to come, so it's entirely relevant to the provision of broadband over wireless.
    It is a staw man argument for this reason. It doesn't matter who allocated these bands, the Pope could have decreed them. The point is that they were initially created to facilitate WiFi devices as a substitute for internal wired networks. Consequently they have strict power limits to prevent one installation from interfering with another. These power limits intentially prohibit the ability of Wisps to provide decent services in order that internal WiFi devices work in the way they are intended.

    It is disengenuous, therefore, to use this as an argument against wireless broadband in general.

    Now, returning to an earlier points you made about fibre. You said that, since we will need fibre at some point in the future, why not do it now rather than later.

    The thing you left out here is the astronomical cost of fibre to the home. Unless an economical case can be made for doing it now can be made, there is no point in campaigning for it. Otherwise it is far cheaper to do it when it is needed rather than before.


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    #21
    BigEejit
    Registered Users Posts: 3,739 ✭✭✭BigEejit


    That was a bit of a mouthful .... War and Peace springs to mind .....

    I agree with SkepticOne that Irelands phone network is absolute shite and that pumping more money into phone lines and exchanges and fibre to those exchanges is a waste of resources .... for example: putting €100 million into phone lines might upgrade all of Leitrims phone lines (if you were using crap phone lines for example :rolleyes:)(I have no basis at all for this price, but rolling out phone lines is an expensive business in the countryside) .... putting that same €100 million into wireless would put in infrastructure all over the country (using microwave links for backhaul to the ESB network or the MANs) that would be carrier independent and any local group could supply their local users with multi-megabit connections .... areas where €ircom will never supply even a decent POTS line for dialup.....


    But I think Moriarty was talking about fibre to the exchanges instead of FTTH, because lets face it, FTTH is NOT going to happen..EVER.. and if Moriarty thinks that it will I have some dried frog pills here that will soon bring him back to reality


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    #22
    bminish
    Registered Users Posts: 480 ✭✭bminish


    Originally posted by SkepticOne
    The point is that they were initially created to facilitate WiFi devices as a substitute for internal wired networks. Consequently they have strict power limits to prevent one installation from interfering with another. These power limits intentially prohibit the ability of Wisps to provide decent services in order that internal WiFi devices work in the way they are intended.


    Actually the power limits predate wisps by many years, In any case extra EIRP (power) is simply an arms race and will not get us very far in the long term, since if I use more power I also create more interference to others, others then have to use more power to overcome the extra interference and so it goes on.

    The real answer to increasing capacity on ISM Spectrum (or anywhere else for that matter) is to make the cell sizes smaller.
    The Mobile operators had to do this (after much grumbling about costs ..)
    Yes making the cell sizes smaller costs more but any WISP taking a longer term view on ISM bands HAS to factor this into their business model since it's one of the costs of doing business on shared spectrum, or they are going to get into trouble.

    In the early days of the 088 Phones Eircell just had a cell up on 3 rock, it gave great citywide coverage to the 8w carphones of the day but could not support many users, these days microcells are used in busy areas just to cover one end of the street.

    Capacity on the 2.4 and 5.8 bands may not be enough on it's own and I am fully in favour of using licensed spectrum where available but there IS enough capacity to go around (especially with 10.5 Ghz and 26 Ghz for future expansion in the longer term when we need 100 Mbs + speeds)
    Spectrum is a scarce resource, let's be smart not greedy

    .Brendan


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    #23
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by bminish
    Spectrum is a scarce resource, let's be smart not greedy
    What I would advocate is an intelligent "Use it or lose it"geographical approach to spectrum management. We have to avoid the fiasco of the national licences awarded a few years ago to Chorus, Eircom et al.


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    #24
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Originally posted by SkepticOne
    Moriarty, before I deal with some of your points, I is worth going over some possible points of agreement.

    1. Regardless of what equipment is used, Eircom's copper network is of limited value going forward. Copper has a limited signal carrying capacity.

    It may be of limited value, but it's not worthless. Vast numbers of people in this country have phone lines that can support pretty decent DSL connections. xDSL is a worthwhile proven technology to pursue for the medium term. Most of the infrastructure is already in place for this, it most definitely shouldn't be ignored or sidelined.
    Originally posted by SkepticOne
    2. Renationalising Eircom would not solve the basic problem of monopoly.

    3. Competition is necessary to create a dynamic market where the consumer is in charge.

    Agreed.
    Originally posted by SkepticOne
    Where we differ appears to be the choice of where the Goverment, if it chooses to combat the monopoly, should put its money.

    That's probably a fair assesment.
    Originally posted by SkepticOne
    In fact, every eircom exchange is already upgraded to 2mbit speeds. The equipment in Eircom's exchanges can operate at 8mbit/sec. Eircom simply throttle the max connection speed down to 512k for the 512k service.

    Someone asked in another thread whether Eircom could, instead of halving the contention ratio on their 54 euro product, instead double the spead and keep it at 48:1. They could indeed do this and it would cost them absolutely nothing. No extra bandwidth would be required.

    I presume by this that you mean every DSL enabled exchange is already capable of 2mbit speeds, which is of course vastly different than saying 'every exchange' is already upgraded for 2mbit dsl.

    I already knew this, I wasn't contesting it. What I was contesting was that a 2mbit broadband connection could be rolled out to a large number of people across the country with a very small investment in upgrading every eircom exchange to provide DSL services. The same can't be said for building out a new wireless infrastructure.
    Originally posted by SkepticOne
    There are two reasons they don't do this. One is that they have to protect their premium business market. The other is that fewer people would pass at this speed.

    Maybe I'm being thick, but where does the problem lie with fewer peoples lines passing for a 2mbit connection? If it doesnt pass, they just get something their line can sustain. How would this dissuade eircom from offering the services in the first place? As you said yourself, it effectively costs them nothing more to offer them.
    Originally posted by SkepticOne
    In Sweden, the incumbent uses a form of DSL with a max speed of 26Mbit/sec. However the actual product they supply goes from 512k to 26Mbit/sec depending on how far you are from the exchange. You are only guaranteed a 512k basic connection speed.

    Indeed, but what's the point you're trying to make?

    Originally posted by SkepticOne
    With regard to upgrading the phone system, you say "but this is going to be done at some point in the future anyway".

    This goes against all experience with the incumbent to date. If they were happy to have the country on extortionate metered dial-up and ISDN in the year 2002 raking in the money despite its effect on the economic welfare of the country, what makes you think they will happily spend a fortune ripping out the existing infrastructure to replace it with fibre, effectively giving everyone a fibre leased line?

    It's only a matter of time, it's the next logical step for eircom (or any incumbent telco) to take to keep themselves relevant. Whether it'll take 5 years or 20 for them to actually grab the nettle and begin an upgrade program is another story of course.
    Originally posted by SkepticOne
    Maybe. This is the point you are trying to argue.

    There isn't a maybe to it. Physical infrastructure will always beat wireless infrastructure in such a massive network on performance and scalability. Whether people will pay for the quality is another question.
    Originally posted by SkepticOne
    Leap, however, do provide a symetrical lower contention product than Eircom and unlike Eircom's entry level DSL (at the time) with which it was similarly priced, had no cap.

    It was still well over the odds for the service they were charging. It's like saying Esat/BT is real competition for eircom. You had the choice of bad or worse.
    Originally posted by SkepticOne
    The problem is that its not getting there. Other countries are moving ahead rapidly. We're still stuck in 512k land (for those lucky enough to get it).
    We're moving, which is a lot more than we were doing 3 years ago. Entry level dsl pricing here is now hovering on fairly reasonable. Exchanges are continuing to be upgraded and trigger levels have been set on a number of others. With the UK two year gap I predict 100% broadband coverage by eircom some time in 2008 ;)
    Originally posted by SkepticOne
    The reason for this problem is that although plenty of companies can pay Eircom to provide DSL on their behalf, Eircom retains a monopoly over speeds and contention ratios and the wholesale price. Although these other companies can shop around for international bandwidth, they are forced to limit what they can provide in terms of speed and contention to that deemed appropriate by the monopolist. Although, strictly speaking, it is not a cartel, to the consumer, the effect is pretty much the same. A bunch of companies with undifferentiated products at similar prices.

    I fully agree.
    Originally posted by SkepticOne
    Outside competition is necessary to deal with this situation.

    .. but here's where we differ. A much more effective and cost-efficent way of solving the above problem is to get the government to scrap comreg and start again from the begining. They give the regulator a water-tight legal backbone and teeth sharp enough that the telcos won't want to be flashed them, never mind feel them. The government then lay out specific goals that they want to be achieved and tell the regulator to make it happen. No more should be needed - no investment in wireless infrastructure that will need to be replaced every few years to keep pace with technology and no further costly investment in a duplicate data network. Complete and effective LLU is brought through to completion enabling other telcos to offer any services they can dream up. Complete and true competition, without the needless waste on an alternative and ultimately inferior wireless network.

    Along with this there could be other cheap and effective measures brought in like the standardisation of decent ducting along all new and majorly repaired roads similar to the current MAN projects. Over time eircom or any other telco will see the demand for FTTC/FTTH style services and be able to provide them.

    That's just one example of the way forward thinking and planning will be a lot cheaper and more effective than throwing money at it and hoping the problem will go away - which incidently is what I equate the vision of a national wireless telecomunications infrastructure to.
    Originally posted by SkepticOne
    However if they do enter the market, Eircom will experience a level of competition unprecedented in their history.

    Perhaps, but as we all know, unprecedented compeition for eircom does not necessarly equate to the offering of internationally competitive services.
    Originally posted by SkepticOne
    You may be correct, however you may like to provide some evidence to support this. Did you forsee their granting of the 3.5 gig licences in the first place?

    From what I remember the 3.5ghz licences have been up in the air for the past long number of years. Comreg only started to give a rats ass about them when the US/EU/ITU decided that the 3.5ghz band was suitable for FWA style services and that it should be pursued as a matter of haste.

    Comreg generally don't do squat without a directive from the EU about spectrum changes or management. From memory theres vague talk in the ITU about one or two further bands in the 10ghz+ spectrum they're thinking of assigning to FWA-style use, but it won't be of relevance for a number of years. bminish would I'm sure have more specific information on this, or can tell me I'm wrong if I'm just dreaming it up. In any case we basically wait on what the FCC in the US decide upon, as that's where the lions share of manufacturers want to sell their equipment. Without cost effective equipment to use, a spectrum allocation is rather useless.

    <continued next post..>


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    #25
    Moriarty
    Registered Users Posts: 6,007 ✭✭✭Moriarty


    Originally posted by SkepticOne
    It is a staw man argument for this reason. It doesn't matter who allocated these bands, the Pope could have decreed them. The point is that they were initially created to facilitate WiFi devices as a substitute for internal wired networks. Consequently they have strict power limits to prevent one installation from interfering with another. These power limits intentially prohibit the ability of Wisps to provide decent services in order that internal WiFi devices work in the way they are intended.

    It is disengenuous, therefore, to use this as an argument against wireless broadband in general.

    As bminish has pointed out, the ISM bands were there long before 802.11b came around. The power limits are there so that numerous devices can operate in close proximity to each other successfully. Increasing the trasmission power just ends up increasing the noise floor for everyone else - and guess what happens when somone sees an increased noise floor.. they increase their transmission power even more which interferes with the other devices.. continue ad infinitum.

    The ISM bands were expressly not created for the purpose of long-distance communication, quite the contrary infact. They aren't really suitable for WISP use.
    Originally posted by SkepticOne
    Now, returning to an earlier points you made about fibre. You said that, since we will need fibre at some point in the future, why not do it now rather than later.

    The thing you left out here is the astronomical cost of fibre to the home. Unless an economical case can be made for doing it now can be made, there is no point in campaigning for it. Otherwise it is far cheaper to do it when it is needed rather than before.

    I'm not campaigning for FTTH/etc as such. I'm trying to explain that the current infrastructre will do for now. One of the reasons you gave for promoting wireless is that at some point in the future we will want much larger bandwidth connections. I'm saying that its pretty much inevitable that at some point in the future the decision will be made in many countrys to begin upgrading their phone networks from copper to fibre. That may take fifteen, twenty or twenty five years but it will happen. Laying a phone network is, at the end of the day, not the most expensive thing a country will set its mind to. It's already been done across the world once, it will be done again.


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    #26
    BigEejit
    Registered Users Posts: 3,739 ✭✭✭BigEejit


    I dont think that anyone could argue that for very high speed rollouts (>5mbit) wired is usually better than wireless (dependent on how many nodes). But while it is desirable to have nice fast wires coming into your house/premises it may not be a viable proposition for the telco ...
    To give a grounding to this discussion we need to know how much the average cost is to roll out wires or fibre ....what do eircom say it costs now to roll out a copper pair to a new house for example? (and I dont mean the charge to the customer)... how much would that be when they actually decide to roll out FTTC or FTTH? ... multiply that figure by 1,000,000 ... do you still think eircom (a private company making quite a good living thank-you-very-much just from renting out lines) will pay that "for the good of the people"?

    [edit]
    Do you think the government will foot the bill with their previous track record?

    But I do agree that the idiots in Comreg need to get the boot and new legislation needs to be passed so that their successor can kick the telcos/ISP's/etc in the arse to get things moving ... and above all - protect the consumer and not the companies providing services.
    [/edit]


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    #27
    bminish
    Registered Users Posts: 480 ✭✭bminish


    Originally posted by BigEejit
    I dont think that anyone could argue that for very high speed rollouts (>5mbit) wired is usually better than wireless (dependent on how many nodes).

    Whilst not trying to argue wireless is better in all cases, systems like LMDS have plenty of potential, if we don't do what the US did and flog all the available LMDS spectrum to the highest Bidders.

    LMDS can go to around 1200 Mbs although Customer deployments are usually a lot lower than this.
    E.g 250 Users at 5Mbs uncontended, 25 Users at 50 Mbs or a mix of user rates.
    Range is typically up to 5Km from a Cell site

    I am absolutely sure that LMDS isn't cheap but building new wired telecoms infrastructure isn't cheap either, especially if the new network is to be capable of handling very high rates in the future.


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    #28
    oscarBravo
    Technology & Internet Moderators Posts: 28,792 Mod ✭✭✭✭oscarBravo


    Originally posted by Moriarty
    No more should be needed - no investment in wireless infrastructure that will need to be replaced every few years to keep pace with technology and no further costly investment in a duplicate data network.
    I'm having trouble following your logic here. I grant you that both ends of a wireless link will have to be replaced periodically to keep pace with technology, but the fact remains that that's all there is to it: two ends. Plug out, plug in.

    The only way to avoid the same problem with a wired link is to replace it with a totally future-proof solution, for which we assume fibre will be sufficient. Here's my problem: I don't see anyone ever running fibre to my house. Ever. And I'm in a relatively built-up rural area.

    In the meantime, we have tin-cans-and-string that won't carry ISDN, never mind broadband. What are we supposed to do while we're waiting for universal FTTH? I can assure you that an alternative wireless last mile infrastructure doesn't look wasteful from where I'm sitting.


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    #29
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by Moriarty
    [On the future value of xDSL technology]It may be of limited value, but it's not worthless. Vast numbers of people in this country have phone lines that can support pretty decent DSL connections. xDSL is a worthwhile proven technology to pursue for the medium term. Most of the infrastructure is already in place for this, it most definitely shouldn't be ignored or sidelined.
    No, its got a limited lifespan due to the fact that it is forced to use decaying wiring. Even if these lines were maintained properly at huge cost, the fundamental limits would remain. Better to spend that same money on newer technology.
    I presume by this that you mean every DSL enabled exchange is already capable of 2mbit speeds, which is of course vastly different than saying 'every exchange' is already upgraded for 2mbit dsl.
    Hmmm. Sounds pretty much the same to me.
    I already knew this, I wasn't contesting it. What I was contesting was that a 2mbit broadband connection could be rolled out to a large number of people across the country with a very small investment in upgrading every eircom exchange to provide DSL services. The same can't be said for building out a new wireless infrastructure.
    The trouble is that from an exchange point of view, 2mbit DSL is already rolled out. It is just that being forced to use Eircom's rusty copper, most people will never get it.
    Maybe I'm being thick, but where does the problem lie with fewer peoples lines passing for a 2mbit connection? If it doesnt pass, they just get something their line can sustain. How would this dissuade eircom from offering the services in the first place? As you said yourself, it effectively costs them nothing more to offer them.
    It is not a problem if this is what you are happy with going forward. If you want something better, you need to look elsewhere.
    [on Sweden's DSL offering a max of 26mbit/sec but dropping down to 512k] Indeed, but what's the point you're trying to make?
    You were trying to argue about the great scaleability of telephone wire DSL technology. The Sweden example shows that even using the best technology, you are forced to drop down significantly when you get further from the exchange. The only option is to build more exchanges and run the wires through them.
    It's only a matter of time, it's the next logical step for eircom (or any incumbent telco) to take to keep themselves relevant. Whether it'll take 5 years or 20 for them to actually grab the nettle and begin an upgrade program is another story of course.
    Hang on there a second. You used the words "logic" and "Eircom" in the same sentence. I claim my 5 euros.

    What is logical from the consumer and technological point of view is not necessarily logical from an incumbent monopolist's point of view. The only logic at work here is financial logic. As the monopolist, it does not really matter what makes technically the most sense. What they are concerned with is simply how long they can continue milking whatever infrastructure they happen to have. They will only upgrade that infrastructure if they think they can make significantly more money. If people are paying good money for crappy xDSL, where is the incentive to upgrade to fibre at a cost of billions.

    This was exactly the same problem faced by the country when Eircom weren't providing any sort of broadband. There used to be threads on here with people complaining about the money they paid on dial-up. For them it did not make any sense not to have broadband, but for Eircom, it made perfect sense. Milk the existing infrastructure all the while talking about lack of demand for broadband.
    There isn't a maybe to it. Physical infrastructure will always beat wireless infrastructure in such a massive network on performance and scalability. Whether people will pay for the quality is another question.
    This is not true in general. It depends on which physical infrastructure you are talking about. If you are talking about Eircom's physical infrastructure [which I think you are] then it is quite easy to bypass it with wireless.
    We're moving, which is a lot more than we were doing 3 years ago. Entry level dsl pricing here is now hovering on fairly reasonable.
    Why do you think that is? The only reason things are moving is because they can't milk metered dial-up and ISDN anymore. However this is a one-off push. It's effect will wear off soon. I believe part of the reason for the last lowering of prices was so that they could position themselves against the threat of the 3.5 gig licences.
    Exchanges are continuing to be upgraded and trigger levels have been set on a number of others. With the UK two year gap I predict 100% broadband coverage by eircom some time in 2008 ;)
    As Urban Weigl pointed out, these trigger levels are just so that they can say they are doing something. Eircom are probably hoping in vein that people will organise begging4broadband groups and act as unpaid pimps on their behalf.
    .. but here's where we differ. A much more effective and cost-efficent way of solving the above problem is to get the government to scrap comreg and start again from the begining. They give the regulator a water-tight legal backbone and teeth sharp enough that the telcos won't want to be flashed them, never mind feel them. The government then lay out specific goals that they want to be achieved and tell the regulator to make it happen. No more should be needed - no investment in wireless infrastructure that will need to be replaced every few years to keep pace with technology and no further costly investment in a duplicate data network. Complete and effective LLU is brought through to completion enabling other telcos to offer any services they can dream up. Complete and true competition, without the needless waste on an alternative and ultimately inferior wireless network.
    Unfortunately this is unrealistic. Eircom will always have the right to challenge decisions in the court.

    Even if you could overcome this, you would then be left with a regulator essentially running Eircom. We already have experience of Eircom supposedly being run in the national interest. And remember, you would still have powerful lobbies within Eircom acting against such things as LLU. The CWU campaigned strongly in Brussels against LLU while Eircom was still a semi-state.

    All the forces that held things back over the years would still be in place.
    Along with this there could be other cheap and effective measures brought in like the standardisation of decent ducting along all new and majorly repaired roads similar to the current MAN projects. Over time eircom or any other telco will see the demand for FTTC/FTTH style services and be able to provide them.
    I'm very much in favour of measures such as common ducting as this enables last mile competition to Eircom. However, only for that reason. If it doesn't lead to last mile competion, then whatever the demand, Eircom don't have any incentive to pass the savings on. In I think 1998, the Government subsidised a fibre ring for Donegal town. In 1999 after the completion of the ring a company complained about the 5 year lead time they were quoted on a leased line from Eircom.
    That's just one example of the way forward thinking and planning will be a lot cheaper and more effective than throwing money at it and hoping the problem will go away - which incidently is what I equate the vision of a national wireless telecomunications infrastructure to.
    Perhaps, but as we all know, unprecedented compeition for eircom does not necessarly equate to the offering of internationally competitive services.
    Hang on. When has there been significant competition for Eircom? You admitted yourself that if there had been, most of the current problems would not be occuring. When NTL pulled out of their upgrade programme for cable internet, a programme that would have led to significant competition for the first time against Eircom, Eircom responded by pulling out of their DSL which they had been sitting on since 1998. They also pulled out of a regional subsidised DSL programme. When they eventually launched DSL in late 2001, it was the most expensive in the world at entry level.


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    #30
    DMT
    Closed Accounts Posts: 1,669 ✭✭✭DMT


    Originally posted by SkepticOne
    No, its got a limited lifespan due to the fact that it is forced to use decaying wiring.
    Optical fibre only has a lifespan of about 40 years.


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    #31
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Originally posted by Moriarty
    As bminish has pointed out, the ISM bands were there long before 802.11b came around. The power limits are there so that numerous devices can operate in close proximity to each other successfully. Increasing the trasmission power just ends up increasing the noise floor for everyone else - and guess what happens when somone sees an increased noise floor.. they increase their transmission power even more which interferes with the other devices.. continue ad infinitum.

    The ISM bands were expressly not created for the purpose of long-distance communication, quite the contrary infact. They aren't really suitable for WISP use.
    I know. This is the point I was making. What I said was
    Consequently they have strict power limits to prevent one installation from interfering with another. Consequently they have strict power limits to prevent one installation from interfering with another. These power limits intentially prohibit the ability of Wisps to provide decent services in order that internal WiFi devices work in the way they are intended.
    Brendan Minish said the bands were designed before WISPS for the express purpose of facilitating short range devices.

    My point that you are trying to twist around by picking on minor technical details is that since they weren't designed for Wisps but rather short range devices, that they can't be used as an argument against WISPS in general. It doesn't matter whether we are talking about WiFi, baby alarms, etc., the key is short range.

    If you had said that WISPs had problems of interference in the very bands designed to facilitate them, then you may have had a point.
    I'm not campaigning for FTTH/etc as such. I'm trying to explain that the current infrastructre will do for now. One of the reasons you gave for promoting wireless is that at some point in the future we will want much larger bandwidth connections. I'm saying that its pretty much inevitable that at some point in the future the decision will be made in many countrys to begin upgrading their phone networks from copper to fibre. That may take fifteen, twenty or twenty five years but it will happen. Laying a phone network is, at the end of the day, not the most expensive thing a country will set its mind to. It's already been done across the world once, it will be done again.
    Please see the other thread here entitled "Eircom's network shambles". The point I and others are trying to make is that for the cost of fixing this up, far more could be done with other technogies. The 1 billion quoted could be spent far more effectively elsewhere. BTW, Eircom in their submission to ComReg quoted 2 million to bring everyone up to a basic dial-up, a figure that ComReg saw fit to repeat.


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