Esat BT's chief eyes broad band of opportunities in 2003

viking

Article in the Indo of all places *gasp*....

LIKE many telecommunications executives, Esat BT chief executive Bill Murphy has a lot on his mind and a busy year ahead of him.

Not alone does he have to contend with the unyielding force of incumbent Eircom and regulatory issues from the Commission for Communications Regulation (ComReg), he also has a March deadline looming where Esat BT must be earnings before interest tax and depreciation (EBITDA) positive.

Mr Murphy, who took up the reins at Esat BT in April 2002, has already been credited with taking the company out of one of the darkest periods of its history, a legacy from the previous management style at the group.

And while Esat BT might not be out of the woods yet, Mr Murphy is cautiously confident of the future of the business.

"We're on track to be EBITDA positive in March," he said, although he warned that Esat BT's cost base is always being monitored.

The company still employs about 900 people following on from a strict rationalisation programme last year.

"While the company is in a much better position than last year, there could be room for changes," he said.

"The situation will be assessed coming up to the March deadline," he added.

According to the last figures for the second quarter ended September 2002, Esat BT was EBITDA positive to the tune of €2.1m, compared to a negative €7.6m in the same period of 2001.

Turnover for the quarter was €59.4m, compared with a figure of €69.3m in the same period the previous year.

But there are other fish to fry outside the walls of Esat BT.

And Mr Murphy is passionate that he will oversee the introduction of FRIACO and broadband while at Esat BT and is willing to fight against the likes of Eircom for that to happen.

He feels that broadband is the natural progression from a flat rate internet access call origination (FRIACO) service which the Communications Minister, Dermot Ahern, is currently insisting that Eircom concedes.

"Once we have a two-pronged strategy, Ireland's competitiveness will improve no end and I think Mr Ahern is aware of this," he said.

He added that once FRIACO is available, it figures that people will then want a faster service.

"We have already seen this happen with AOL in the US and Freeserve in Britain," Mr Murphy said.

But he warned that Ireland Inc can't wait two or three years for an effective, affordable broadband or FRIACO service and that every minute we're without one, our competitiveness is being damaged.

In addition, the danger is that the longer we are left without these services, internet access and PC usage will continue to slip below our already minimalist levels compared with our European peers.

He is critical of Eircom's stance on FRIACO, despite Mr Ahern's recent demand that the incumbent provide a wholesale service to other operators like Esat BT.

"I'm disappointed that FRIACO had to be mandated," he said. "But it's also frustrating that things are still not moving on that front."

He added that the move to mandate FRIACO was a bold one on the part of Mr Ahern, whose target to have a full FRIACO service available for consumers is June of this year.

"The Commission for Telecommunications Regulation (ComReg) also pushed hard but I know that from an Esat BT perspective the technology will be there when the time comes," he said.

He added that Ireland is now five years behind both the US and Britain in the provision of a service.

Now, though, he wants 2003 to be the year of broadband. Essentially, broadband is about speedy delivery of information over a wide band of frequencies.

Because of the wide band of frequencies being used, information can be multiplexed and sent on many different channels, in the same way that more lanes on a dual carriageway allow more cars to travel on it at the same time.

Currently a limited broadband service, through Digital Subscriber Line (DSL) technology, is available from both Esat BT and Eircom, but Mr Murphy admits that it's too expensive.

According to him, Esat BT wants to be able to provide a less expensive service, but more pressure will have to be put on Eircom to reduce its cost stack.

The cost stack is the way Eircom builds up its charges to other operators to use its network, etc.

"At the moment, it's too high to provide a competitive broadband price," he said.

For example, taking average figures from Ireland Offline, a broadband service is available in Estonia for €37 a month for a 512k/128k line, while in Ireland it costs €110 a month for the same service.

He added that the same entry level service in Northern Ireland costs stg£29.99 per month.

The subject of Northern Ireland and synergies with the southern part of the country are also on his agenda.

Last August, Mr Murphy's remit at BT Ignite, Esat BT's parent, was extended to the position of managing director BT Regions, which includes the Northern Irish operations.

And despite the fact that different cultures and regulatory and legal frameworks exist in Northern Ireland and south of the border, he believes there are synergies between the regions. "There is scope for an all-Ireland agenda," he said. "It's good for business, for customers and for ourselves."

He added that the company is currently looking at common directories in areas such as customer services and account management, for example.

Looking forward, for Murphy, it's business as usual in the fight for a permanent spot on the Irish telecommunications map, despite the unbending competition.

Ailish O'Hora

MDR

The cost stack is the way Eircom builds up its charges to other operators to use its network, etc.

"At the moment, it's too high to provide a competitive broadband price," he said.

Thats not what COMREG says.

ando

"I'm disappointed that FRIACO had to be mandated," he said. "But it's also frustrating that things are still not moving on that front."

not moving, eh?

MDR

Our own information suggests that they are in a tough part of the negotations ... but things are moving forward.

LoBo

Originally posted by MDR
a tough part of the negotations

EIRCOM: No one is forced to negotiate with us, they choose to negotiate with us.

dahamsta

Article in the Indo of all places *gasp*....

I wonder who rang who. That is, I wonder if the Indo rang Esat to dig themselves out of a hole, or Esat rang the Indo after spotting the opportunity.

Anyone here watch Spin City?

adam

neverhappen

The cost stack is the way Eircom builds up its charges to other operators to use its network, etc.

"At the moment, it's too high to provide a competitive broadband price," he said.

Could be wrong, but I thought that Esat provide DSL via LLU and that the ODTR set the LLU price per line payable by Esat to Eircom at the european average... If that is the case how can Esat blame Eircom for their DLS price ?

thegills

Surely the fibre connections required from the Esat switch into the eircom exchange plays a major role in Esat's DSL prices?

spongebob

Originally posted by thegills
Surely the fibre connections required from the Esat switch into the eircom exchange plays a major role in Esat's DSL prices?

The government gave them a load of wonga towards same fibre in the form of a grant. ISTR it was £25 Million (punts yes) but cannot check the detail as the 'database' is 'available' in January 20003 Here . Norcontel has nuthin either.

This is a perfect example of what Mary Hanafin is good at.

You cannot get the hard facts but there are guidlines on using the Logo in there for ^*(&^( sake.

M

neverhappen

Originally posted by thegills
Surely the fibre connections required from the Esat switch into the eircom exchange plays a major role in Esat's DSL prices?

IS this a charge to Esat from Eircom ? If so, are there any regulatory controls on the price ?

I don't know the technical details of LLU, but it seems to me that if the ODTR can set the LLU price at the euro average but - because of other Eircom "cost stack" elements - the retail price of services on those unbundled lines ends up unerringly close to Eircoms own retail prices, then theres something wrong with the LLU regulations/price controls...

PiE

"Cost Stack" - Another good phrase from the monkeys.

What a load of rubbish. Esat are charging so much for DSL because they want to and because they can.

pork99

Originally posted by Muck

This is a perfect example of what Mary Hanafin is good at.

Sorry don't understand you there Muck - I was not aware that she had any useful purpose whatsoever

sceptre

Originally posted by pork99
Sorry don't understand you there Muck - I was not aware that she had any useful purpose whatsoever

Damage deflection

If you spend long enough throwing dirt at anything made out of teflon (even a Taoiseach) it'll at least block the view when the pile of dirt falling off gets high enough.

highlight

The LLU charges depend on which variant Esat take - it's either 16.81 or 9 euro

vinnyfitz

What, apart from the price, is the difference?
Thanks.

highlight

For the full line, it's 16.81. For a shared line (i.e. just the higher frequencies so the voice can continue to go over the rest of the line) it's 9

neverhappen

Originally posted by highlight
For the full line, it's 16.81. For a shared line (i.e. just the higher frequencies so the voice can continue to go over the rest of the line) it's 9

Are there other charges levied by eircom on an unbundled line on top of the 9e that can justify murphy's remarks about eircoms "cost stack" ?

vinnyfitz

If I was ESAT and only wanted to offer flat rate internet access to punters who also bought their voice calls from me I'd go the whole hog and pay Eircom 16.81?
If I wanted to offer an intenet product while allowing punters stick with Eircom for voice I'd just pay eircom €9.

Or have I completely misunderstood this?

leeroybrown

You can rarely glean a true impression of a company from a statement from it's CEO or MD. They are just dealing in press release talk and sound bytes.

Dustaz

Would the co-location fee be included in this Cost Stack then?