SBP Article: "'Dismal' Take-up puts DSL in crisis"

Eurorunner

In todays Sunday Business Post - computers in business supplement pg.9

For those of you who didnt get their hands on a copy this morning, article by Adrian Weckler as follows:

‘Dismal’ Take-Up Puts DSL in Crisis

The market for broadband digital subscriber lines (DSL) may be in crisis, according to the latest figures recorded by Irish telecom operators.
Less than 10 per cent of DSL-enabled lines are being used and demand is said to be “dismal” with no rapid pickup in sight. The situation is so bad that some telecom executives are contemplating the viability of the service.
Esat BT has revealed that the take-up of its DSL technology has been tiny, at less than 2,500. This represents a minuscule percentage of the 400,000 business-enabled and almost 800,000 residential telephone lines available to the company.
That figure is described as ‘dismal’ by sources in the company. Despite not giving specific figures, Eircom is believed to be in similar shape. It has a stated commitment to signing up 100,000 customers by the end of 2004.
(Two weeks ago, The Sunday Business Post reported that additional pressure to reach this target was being applied by Eircom’s banks, concerned at the perceived low take-up of DSL technology by Eircom customers. The claim is rejected strenuously by Eircom.)
Most experts blame the poor take-up on confusion about the product, apathy and a general reticence in the small business sector to substitute DSL for ISDN lines.
Price is also considered to be a factor, as Ireland has the second highest broadband prices in Europe, according to the most recent report by industry analysts Forrester.
However, others accuse the telecoms operators of being less than enthusiastic about promoting the technology to consumers and the small business sector.
“They’re not advertised the way they could be – probably because it would directly affect their revenue on other products” said Stefan Callery, technical manager with 3Com in Ireland.
Callery is talking about the telco’s existing ISDN products, which stand to lose most if DSL takes off.
“A lot of people showed interest initially, but were put off by a variety of things like the expertise needed or the rate of line failure,” he said.
The figures represent a blow to hopes of expected early broadband adoption by the small business and consumer sector. Analysts and industry observers had predicted a rush for the technology once it dropped below the €50 price barrier in April.
However, with almost 800,000 lines now DSL-enabled across more than 100 local exchanges in the country, the take-up rate is puny. Spokesmen for ESAT BT and Eircom squabble over why take-up is poor. According to Eircom, the situation is not that bad and a target of 100,000 lines will be met by the end of next year. Esat BT holds a different view.
“Wholesale price is a major factor,” said a spokesman.
“The wholesale rental price in Ireland, at €27 plus VAT is 50 per cent higher than the wholesale price in Britain. The set-up price in Ireland is €150 while set-up price in Britain is zero.
“This means that competition at the service level is minimal, with only four operators in the DSL market in Ireland versus hundreds in Britain”, said the spokesman.
The spokesman said that the retail price needs to be below €40 to see any major increase in demand, and below €30 to see a mainstream take-up. But, despite vague hints of an autumn campaign to spur demand, Eircom is slow to budge on the wholesale rate.
“Other operators are very quick to point that out, but it’s us who invested in the first place,” said the spokesman. “They always have the option of investing in their own infrastructure”.
This analysis – that rivals to Eircom should consider building their alternative local loop network – seems a little far-fetched. So why is DSL take-up facing an early crisis?
Confusion & Apathy
According to the Small Firms Association, most people have no idea what DSL is and only have a vague idea of what ‘broadband’ means.
“They know that broadband means faster internet access, but that’s about it,” a spokesman said.
This is despite Eircom spending more than €1 million advertising its i-Stream DSL product on and off over the past year.

Entrenched Interests
One of the most heated issues in the DSL take-up debate is whether the telecoms operators really want people to use DSL.
The charge is that the companies – especially Eircom – are strangling their DSL products at birth because the technology threatens their profitable ISDN business.
It has almost 350,000 enabled ISDN lines, of which just under 200,000 are especially vulnerable to a mass DSL take-up. Roughly speaking, you get up to four times as fast an internet connection with DSL as ISDN for just 50 per cent more per month.
Critics say that the telcos are not overly keen for their small business customers to do the sums on this one, especially since there are so many ISDN customers in Ireland (over 80 per cent of them belong to Eircom).
A spokesman for Eircom said: “That just doesn’t make sense. If that was the case, which it isn’t, Eircom would not have aggressively enabled 850,000 lines of broadband. It just doesn’t make commercial sense to do that and not encourage take-up of the DSL offering”.
Line Failure
Even those who know what the technology is and are prepared to pay higher than average European prices face one final obstacle – line failure.
Esat BT claims its line failure rate runs at about 15 to 20 per cent, but other industry reports suggest the figure may be as high as 50 per cent.
Eircom says the failure rate is about 30 per cent. DSL technology uses ordinary phone lines. Ordinary phone lines are made of copper.
But some ordinary phone lines – maybe as many as half of them – are in a shoddy state. If so, they’re in too poor a condition to support a DSL connection.
The responsibility for these sub-standard lines would appear to rest with Eircom, which still owns them all. (The Eircom/Esat/regulator row was over how Eircom would let other companies get access to them.)
However, line rate failure in Ireland is roughly similar to that of most countries.
High Prices
Despite reducing the price from €80 to €45 (excluding VAT), Ireland’s DSL prices are still among the most expensive in Europe.
The research agency Forrester reported two weeks ago that only Greece was more expensive, with Irish prices being over twice as dear as countries such as Belgium, Portugal and Italy. An average DSL price in Britain is about €30(excluding VAT), far cheaper than the cheapest DSL product here.
In fact, setting up the cheapest DSL package from scratch costs over €1,000, in the first year when connection fee, line rental and modem are taken into consideration.
Current prices, say critics, are still far above the ‘trigger’ level, which would encourage the mass take-up of the technology. Despite repeated calls, no spokesman for Eircom was available to comment on the issue of pricing.

shinzon

Now thats more like it Adrian, the first time anywhere in print that ive seen line failure rate listed as a contributing factor in slow DSL take up.

much more rounded article than last time around, and to be honest 50% sounds a lot more like it then the 15 to 20 that ESATBT seems to think it is

Bravo

Shin

Urban Weigl

BT in the UK has been forced to cut wholesale prices further, so now the comparison is as follows:

BT (UK and Northern Ireland): EUR 11.64
Eircom (Republic of Ireland): EUR 27.00

Also see: http://www.boards.ie/vbulletin/showthread.php?s=&threadid=113784

I can tell you with confidence that if ADSL came in at below 30 euros (inc. VAT of course as it is a consumer product), I could name few internet users who would not upgrade. Provided they passed the line test, of course (that seems to be the second hurdle right now, with many lines being in such poor condition, or being split, pair gains, and so on).

Paddy20

Eurorunner,

Many thanks for posting that. Clearly *Eircon are slowly but surely being exposed for the dirty RAT that they are and have been allowed to be for far too long.

P.:)

fisty

I would put the slow take up down to the fact that it has a cap.
Whats the difference In watching how many minutes you stay on line and how much you can download.
Its a ****ing sham, if you want people to take up broadband, you have to give them broadband, not a ****ing half-breed which equates to more worries about bills.

When are you going to take your head out of the sand and give the consumer what they want Eircom, you're looking for a quick profit from something which handled correctly could give stable growth and profit years to come.

-Greed-

dahamsta

This "800,000+ lines enabled" thing P1SSES ME OFF every time I read it. In the article, Adrian writes that Eircom have conceded a 30% failure rate, which is a disgrace in and of itself, but it's obvious to anyone with any past experience of Eircom that that figure needs to be adjusted for the Eircom Bullsh1t Factor. With adjustment, it's definitely 40%, it's more likely 50% and it's quite possible it's 60% or higher. (I've heard personally that it is in fact a lot higher, but I can't prove this.)

With that in mind, why quote such a stupid figure in the first place? It's an idiotic number, it's a number Eircom pulled out of a hat, it means nothing unless you adjust it for failure rates, and Adrian didn't even do that for the percentage Eircom admitted. You know it's bullsh1t, we know it's bullsh1t and everyone featuring in the article knows it's bullsh1t.

(I appreciate the follow-up article too. This "enabled lines" thing just ticks me off.)

adam

Eurorunner

Having been quick to point out the inadequacies in Adrians piece the other week, I just want to say thanks to him and the SBP - true to his word, Adrian has come back & balanced up the argument.

nahdoic

Current prices, say critics, are still far above the ‘trigger’ level, which would encourage the mass take-up of the technology. Despite repeated calls, no spokesman for Eircom was available to comment on the issue of pricing.

My favourite part of the whole article

You can't help but feel the IOFFL pressure coming through there.

corkie

Decision now imminent on Eircom customer ban By Gavin Daly
Eircom will find out this week if it is to be blocked from contacting customers it has lost to rivals.
The Commission for Communications Regulation (ComReg) expects to make a decision on a proposal to ban Eircom and other operators from contacting lost customers for up to 12 months.


O2 reducing costs: O2 Ireland has introduced a new roaming service called All Ireland.......

Connecting with the E-citizen By Ian Kehoe
a follow up on the June Story : All the things they promised.

Links to above available here

spongebob

....let me say well Done Adrian.

Now to explode the myth of the enabled lines. Eircon have a failure rate of 50% from what I hear. They have a database that shows the scale of the issue. How can they claim a line is enabled in these circumstances?

Why will they not remedy these failures by running clean exclusive copper Adrian? We pay the highest line rental (BY FAR) in the EU, surely we should have the best lines.

M

Krouc

A good article. Nice to see the spin (Lines, failures, price [Customers & Operators] and Greed) from Eircom didnt go un-addressed. All company spin was answered with the facts and hopefully this kind of article becomes commonplace in the Irish press. Also I was delighted with the comments on Eircoms ISDN tactics, I'm sure that will ring a few bells with some SME people.

It’s been a long time coming but as Paddy stated Eircom are finally being exposed. It’s been slow coming but then Eircom had the money and resources to see to that.

I would have to agree with Fisty. The cap is an issue albeit a small one. Most people won’t be affected but for some the cap is a contradiction. But one must see the other side, if there is a cap let it realistic and throttle rather than bill per MB/GB...

K

Mr_Man

Folks,

might be worthwhile following up with a letter to the Editor congratulating Adrian and making the points about the cap and line failure which have been mentioned above.

It would probably be best if it comes from someone who has been rejected because of a failed line test.

M.

shinzon

Sent this to Adrian, I think others should do similar


kudos adrian just read your follow up article in the SBP and am more than happy with what you did with it, speaking as someone who wants DSL and can probably never get it due to the fact of the state of the copper i am glad it was highlighted in your artcle, it is the first time ive seen anything in print about the high failure rates of the lines that are supposedly been enabled by eircom.

Its will be interesting to note the reaction if any by Eircom to this article, Irelandofline i believe is beginning to take a tougher line lately as regards Eircom propaganda and will be jumping on any inaccuracy however tiny that Eircoms spin doctors will spew out next.

Today for the first time i feel the real issues concerning broadband take-up were addresed in a very informative manner and will give people pause to think that alls not right and something must be done to equate the highest line rental price in Europe, with the poor state of the infrasturcture plus the line failure rate, the 2 sides just dont add up.

Well done again and lets hope the other papers follow suit with similar articles and we can start to put right what is obviously so wrong.

Regards
*******

Shin

unkel

Thanks Eurorunner for posting this. Was reading first few pages of the supplement in friends house today but never reached this article.

Though Adrian is much better informed now and has adjusted the tone of his argument considerably, he still misses the most important reason imho: the cap.

Adrian, if you're reading this, why didn't you spend a working day or two surfing boards.ie - that would surely have given you an all round set of arguments including this one?

I fully agree with fisty. I feel as strongly about about this, that out of principle I would refuse to sign up for any broadband with a cap as imho this defeats the whole idea of broadband. Do you all realise that 512kbps DSL reaches its 4GB cap at about 17 hours per month at full throttle. This is just over half an hour per day - nothing less than ludicrous :mad:

I consider myself very lucky given the Irish broadband environment when NTL came to Lucan. Reasonable subscription, low setup costs and ok speed which has proved to be fantastically stable so far :cool:

P.S. Hot deal in Holland at the mo: 11Mbps wireless, no setup costs (get your own 802.11b gear) for €27.99 a month including VAT. I know someone over there that has quit their contract with their cable provider (got satellite - all the same channels but subscription only €15 per year) and their contract with their telecoms provider (using voice over IP through their broadband connection). Providers in Ireland: get a bit more complacent and you will bankrupt yourselves in a few years

unkel

Oh and forgot this. At work we recently swapped Eircom leased 128kbps ISDN leased line (about €14000 per annum) with IBB 512kpbs (contention 4:1 so at worst same speed as Eircom, at best 4 times as fast) for about €1600 per annum. A saving of nearly 90% :eek:

oneweb

I read it from the paper version. An excellent, well researched report on the state of affairs. Kudos to Adrian!

I love the bit at the end of

Entrenched Interests
One of the most heated issues in the DSL take-up debate is whether the telecoms operators really want people to use DSL.
The charge is that the companies – especially Eircom – are strangling their DSL products at birth because the technology threatens their profitable ISDN business.
<snip>
Critics say that the telcos are not overly keen for their small business customers to do the sums on this one, especially since there are so many ISDN customers in Ireland (over 80 per cent of them belong to Eircom).
A spokesman for Eircom said: “That just doesn’t make sense. If that was the case, which it isn’t, Eircom would not have aggressively enabled 850,000 lines of broadband. It just doesn’t make commercial sense to do that and not encourage take-up of the DSL offering”.

The words 'pulling', 'wool' and 'eyes' come to mind. "aggressively enabled"? erm, how long did it eventually take? how many spanners did they try to throw in in the mean time? and are still trying to?

Good to see at least one reporter has a grip of the details that matter

sceptre

Originally posted by oneweb
"aggressively enabled"

It's a great phrase. Ah, but what in tarnation does it mean. I wonder if the Pat Galvin types are reading from the hymnsheets written by the Soula Evans (may she rest in Greece, please love) types.

Excellent article.

iwb

I noticed that nobody here commented on the lack of education and understanding part too much. I believe this is a huge factor in the lack of takeup. Unkel, what percentage of the population will be concerned with the cap? Come on, most punters out there are in the 'I use the internet for three hours a month camp' at the moment. Sure, there are some who would like not to have a cap but it is hardly one of the burning issues at the moment. It would be great if it was!!!!
So, what to do about the lack of education? Come on guys, isn't there any will to do something to educate the masses? Anyone want to help me do it?
iwb.

Urban Weigl

Price and availability are definitely the main issues here preventing takeup. The first must come in at under 30 euros, and it must be available to at least 75% of homes, climbing to 95%.

Paddy20

Re: Lack of Education?..

iwb,

Maybe, The Dept of Education has a role to play here. Computing, is now taught and students/pupils use computers regularly in most Schools throughout Ireland. Teachers could encourage pupils too inform or educate their parents about the issues involved about internet costs and the most economic Internet Access Provider available!. Apart from that damned Eircon and their RAT!.

P.;)

spongebob

Originally posted by Paddy20

The Dept of Education has a role to play here. Computing, is now taught and students/pupils use computers regularly in most Schools throughout Ireland.

The department of education (last week) introduced a new science syllabus in schools with no labs and no funding for labs. The ASTI is correct when they highlight this but they will get no support because they always sound like the DUP when they get going. Computing is NOT an integral part of this syllabus and will not be for 4-5 years when the next syllabus comes out.

The Dept of education will be no use at all.....trust me on that.

Teachers could encourage pupils too inform or educate their parents about the issues involved about internet costs and the most economic Internet Access Provider available!. Apart from that damned Eircon and their RAT!.

Teachers do not know the issues involved and will not be trained on them by the Department who will do nothing.

Nor will teachers encourage internet use Paddy, what would happen if a little dear went home 'encouraged' and met a pervert (or a senior Eircom manager who shall remain nameless <Cough>) in a chatroom. The legal vermin would have a field day.

M

iwb

UW, I agree that this is probably the biggest issue at the moment but I can't see that there is a lot that we can do to directly influence the price. I also think that a €30 product will guarantee much higher takeup rates but there is still the potential to increase this further with education and awareness.

Paddy20, yes, a great way to get the message out. My kids are already incredibly competent with PC's and will no doubt drive upgrading our equipment and broadband connection.
I have visited some schools, directly related to broadband. One of the schools had pulled out all the PC's and made the lab back into a classroom as the teachers didn't have the confidence to teach the kids. Also, a few of the schools didn't have the basics, like a sound building so it is hard to get them excited about broadband. There is also the problem of kids accessing sites from school that they shouldn't. It may or may not be a rational fear but nonetheless, the teachers are concerned. There is a lot of work to do in this area still but it has potential and I think that overall, the teachers are interested.

Paddy20

Muck,

All I know is that I have lost track of the number of local families here in my locality in Donegal. That have had to buy home computers precisely because their childrens homework frequently encourages them to do research using the www?.. Teachers are actively encouraging their pupils too make proper use of home computers in their education.

P.;)

Scruff

On the line failure being issue i have to say that the fact that €ircom will charge you €99 (or what ever the highway robbery is atm) to replace your line is a knock on effect of line failure and reason the take up is so low.

Happened me, line failed cause of quality and was told it would be €99 to relpace it but they couldnt garuntee it would work for ADSL. Asked if they would refund the cost of the line replacement if the replacement wasnt any better than the original and was told no.

Told them where to shove their broadband.
:mad:


<Aside>Had running arguements with the bastards sisnce we moved into the gaff. Can only ever connect at max 28,800bps on diall up. Still told there is no problem with the line and not on a splitter. How the **** can they be allowed to get away with this? "Look at all our AMAZING Internet connection options! Oh by the way we have absolutely NO OBLIGATION whats so ever as to the quality of our service for any of them!" Kuntz.>/Aside>

jbkenn

My blood is boiling. The shower of f%^&s in EsatBT

Esat BT has revealed that the take-up of its DSL technology has been tiny, at less than 2,500.

That figure is described as ‘dismal’ by sources in the company

Two of my experiences with these tossers, go to an EsatBT "Dog and Pony show" in Limerick some weeks back, full turnout of EsatBT heads. Should have known it was time to go when the first speaker "Welcomed us all to the Aer Lingus presentation, you could hear the penny dropping as he thought "No wait a minute that was last job, who am I with now?
ah yes EsatBT. Should have definitely f^&*$d off when the next gimp informed a questioner that he was not familiar with the geography of "Galway" . I had 2 clients, 1 who would benefit greatly from EsatBT Telephony package and the other needs DSL. After listening to the horse manure for 2 hours got to talk to an Account Manager , gave the contact details of my clients and assured her she would be pushing an open door, sales in the bag. I got a call next day from this twat, who basically chewed my ear off, for sending her on a wild goose chase, she had tried to sell DSL to telephony client and she left in a huff when they did'nt know what she was talking about, she then went to client 2 (who wanted DSL) took one look at their phone bill and announced that their telephony usage was'nt high enough to warrant her presence, and promptly walked out the door.

Next experience, Client in Shannon on ISDN, advise him to get DSL (heavy net usage) ask's me to organise it, get phone bill from accounts and discover they are EsatBT telephony users, note a/c no. and phone EsatBT.to be told that from the account they are commercial customers and EsatBT has not enabled Shannon for commercial DSL offering only domestic, so I say grand we''ll take that, "Sorry because you are a commercial customer we cannot install the domestic DSL offering", ok say's I what can you offer as an alternative "EsatBT Anytime or a leased line" but no DSL.

And these dickheads day takeup is "dismal" GOB****ES the lot of them

end rant

jbkenn

oscarBravo

Originally posted by Scruff
Still told there is no problem with the line and not on a splitter.

I was told that, more than once, by the 1901 biddies. This despite the fact that, at the time, I knew for a confirmed fact that there were at least two splitters on the line.

Not that it matters: the current USO requires them to provide you with a line capable of a 0bps connection. :rolleyes:

spongebob

Originally posted by jbkenn
My blood is boiling. The shower of f%^&s in EsatBT

"Sorry because you are a commercial customer we cannot install the domestic DSL offering", ok say's I what can you offer as an alternative "EsatBT Anytime or a leased line" but no DSL.

More proof of the incredible ineptitude of ESAT. I knew a guy who wanted the infamous 256k product in December 2002. He was told he was a business and could not have it as it was residential.

He wanted it as a warm backup for a 256k leased line.....not an ESAT one. He never bothered them again when the leased line came up for renewal a few months later.

ESAT will sell their commercial dsl (where available) to residential customers .

M

spongebob

Originally posted by oscarBravo
I was told that, more than once, by the 1901 biddies. This despite the fact that, at the time, I knew for a confirmed fact that there were at least two splitters on the line.

Not that it matters: the current USO requires them to provide you with a line capable of a 0bps connection. :rolleyes:

Biddy calls it a 'carrier line', a splitter is something she does her nails with!

M

oscarBravo

Originally posted by Muck
Biddy calls it a 'carrier line', a splitter is something she does her nails with!

[Hair|nail]-splitting aside, I was told I was on a full pair, which wasn't true. Never take this statement at face value, except perhaps from an engineer on the ground.

unkel

Originally posted by iwb
Unkel, what percentage of the population will be concerned with the cap?

Beg to differ m8. If you can only be online for about half an hour a day, maybe if it was 3 hours...

Originally posted by iwb
I noticed that nobody here commented on the lack of education and understanding part too much. I believe this is a huge factor in the lack of takeup

That I think is hitting the nail on the head. Product life cycle is the key here. By providing an uncapped, not even that cheap, BB product, most pioneers and early adopters will sign up provided availability is good. Delighted with the new service, they will then educate & convince friends/family/colleagues etc to take it up also. Telco's, delighted with initial takeup step up their mass-marketing campaign. At this stage the price has already come down. The masses follow on signing up and penetration of BB is high, the price low, the small group of heavy (pre-BB) users save a fortune, the large group of light or non (pre-BB) users pay a good bit more then before but get a great service that is new to them and telco's still make a reasonable profit caused by the mass takeup

This scenario has happened in the Netherlands. Where we are now, they were just over 3 years ago (we are of course the E-tub of Europe here). Only real difference: more and stronger competition right from start, especially from omnipresent cable forcing rapid availability of DSL.

Pricing until very recently was not much better than here, but didn't start of with outrageous €169 / month + VAT and €600 installation or whatever it was. This scared of a lot of even the most interested pioneers / early adopters. FRIARCO never took off in the Netherlands as BB was there first - making FRIARCO obsolete

iwb

Originally posted by unkel
Beg to differ m8. If you can only be online for about half an hour a day, maybe if it was 3 hours...

Now that is surely not what you believe, is it? I have a solo account and for several months it had a 3GB cap on it. (now 6GB) I consider myself a heavy user. I am logged into a VPN all day, I make VoIP calls, surf constantly, use a collaboration tool and do many other things online. My kids access all the kid websites and play games, my wife surfs quite a bit and we share the connection with another household where they use it quite a bit also. While I can't categorically say that we didn't exceed the 3GB, we did use counters on each PC and I doubt that we exceeded it by much ever.
We don't download movies or MP3's as a rule, or Linux ISO's but that is about it. If I had no cap on the service I might try the movies. I have that choice now if I want to change provider, although Netsource have a strange 'no cap' policy:D
Again, while I agree that there are quite a number of potential heavy users out there, I don't believe that they are the typical user. Remember, most of these guys are coming off dialup or ISDN where to get over 100MB a day downloaded, they would've had to be online for many hours.

iwb

FRIARCO never took off in the Netherlands as BB was there first - making FRIARCO obsolete [/B]

That is interesting. I always thought that FRIACO and BB of most flavours would co exist for many years. Surely there are many people out there who would want to try out the internet without the higher cost? Perhaps sign up for the €10 per month service to give 30 hours a whirl rather than commit to an install fee and contract.
Also, I guess the Netherlands is different to Ireland geographically and in deployment, it would take a huge effort to have BB coverage across the whole of Ireland. Couple that with line compatibility and distance issues and I would think there will be a fairly strong interest in FRIACO for some time to come here, regardless of the price of DSL.

Urban Weigl

Originally posted by iwb
...rather than commit to an install fee and contract...

I'm guessing what makes a big difference here is that in most European countries, there are no install or modem fees. And there are no long term contracts either.

For example I was looking at a company in the Netherlands a few days ago. The install + modem were priced at 0 euros, monthly it was 30 euros, and there was no obligation to stay with the service like you have with most services here (with Eircom for example 12 months). I think all that adds up and makes a huge difference.