Pat Kidney, Head of the Ireland office for telecommunications consultancy Analysys Mason, spoke to Licensed Wireless News about the future of fibre and wireless, how Irish businesses can use technology to compete, and where the demand for bandwidth will take telcos.

Q:        What technology should business invest in, to position themselves competitively?

Pat Kidney, Head of the Ireland office for Analysys Mason.

I don't think businesses care about the technology, they're only thinking about business outcomes and the services they need to support these outcomes. For example our office has 8 people, a 10 Mbps Internet connection, our voice is VoIP, and I have a Blackberry and a 3G enabled laptop, but these are just tools. What I want most is to use the time between meetings, or not to have meetings at all if possible. To this end, we use WebEx services quite a bit for meetings, because we have 12 offices in eight countries.  

Q:        Ireland relies on markets abroad for business.  How can technology position us well to compete?

If you're talking about competitiveness, a key aspect is maximising productivity and in that sense we're talking about mobile or nomadic access to services in the first instance. Cloud computing can also be an important tool as companies break into new international markets: For example, if you're doing a lot of work on both sides of the Atlantic and spending time abroad, you could have a satellite or virtual office, and have your applications hosted at home but mirrored in the data centre in that territory. That would help reduce costs and improve productivity.


Q:        What key technologies will dominate telecommunications in the next several years?

We're going to see more fibre and we're going to see more wireless, and we'll see more fibre connecting wireless 3.5G-4G base stations to the core networks and the Internet. In time fibre will replace copper, but that's a huge task, particularly in a country like Ireland which is 40% rural. The growth in wireless will depend on the amount of spectrum available and a clear articulation of a holistic spectrum policy by the government.


Q:        How are telcos going to meet the insatiable demand for bandwidth?

Bandwidth demand shows no signs of stopping, but there is a problem with the business model. The over-the-top providers like Google and YouTube who drive bandwidth usage and make a lot of money from Internet advertising don't pay for the infrastructure. This is one of the dilemmas which goes to the heart of the Net Neutrality debate.

With Net Neutrality, all traffic is treated the same. In a non-net neutral situation, you would have prioritisation of traffic which could be based on fees that are paid by the content provider. At the moment, you just publish a website and anybody can access it. The alternative situation is where the provider of a website or internet service would somehow end up paying the telecoms service provider, to give them another source of income. But how any of that would work is all completely open and the subject of a worldwide debate.

To cope with bandwidth demand most telcos are introducing data caps. Most people won't experience the data caps as a restriction now; traffic will gradually grow up to the level of the caps. These caps have to do with the fact that this business model is broken and there is a requirement to correlate (in some way) the traffic usage and the revenue.

And there's another problem with bandwidth. On the fixed side, the process of rolling out fibre is very expensive. In a study of fibre to the home (FTTH) we conducted recently, we estimated it would cost €2.5 billion to cover about 50% of homes in Ireland, and even if this was increased the final 10%, 20, 30%+ may never be reached economically with fibre -- the economics go against you every which way.

The problem on the wireless side is even more remarkable: mobile operators are not getting a return on the investment they're making in bandwidth, but to remain competitive, they've had to continuously upgrade their equipment. Ultimately that's unsustainable.
 

Q:        So there's no real answer yet, then, about how telcos are going to cope with increasing bandwidth demand?

Providers in this market and a lot of markets are being driven by competition: if a mobile operator puts bandwidth up, the other networks will, and that drives what fixed line competitors do, too. You also see mobile operators investing heavily in their brands.

You get to a stage where owning the network becomes less and less important, but brand matters. There was a famous survey in the UK asking T-Mobile and Virgin Mobile customers what they thought of the quality of the network and the experience. Virgin scored much higher on network quality -- but it's the same exact network.


Q:        Will wireless and fixed continue to co-exist?

I think so – it's horses for courses. Fixed in urban areas will satisfy certain needs, but wireless has the nomadic advantage that fixed will never have. High-bandwidth fixed in rural areas will be a long time coming, and Ireland is 40% rural. In those areas you'll see wireless becoming the predominant means of communication.

 
Q:        Do you think licensed wireless has proven itself as a robust technology?

Yes, a well engineered licensed wireless site performs as well as anything else. In terms of quality of service, I think users of licensed wireless won't notice the difference from fibre. There are quirks on licensed wireless, but many of them can be engineered out. It is possible a crane might park between your buildings and block your wireless service, but a bulldozer could just as easily dig up your fibre.