Eircom and BT are on a collision course over the correct strategy for introducing next generation networks (NGN), the telecoms infrastructure upgrade that will provide consumers with video-on-demand, Voice over IP (VoIP) and other broadband-enabled services.
Eircom has embarked on a €60 million upgrade of its core network which will provide significantly increased bandwidth to its exchanges which serve more than 2,000 phone lines. This means that by the middle of next year, most Irish towns with a population of more than 3,500 people should be able to receive enhanced broadband services both from Eircom and its competitors.
In tandem with this investment, Eircom is proposing to upgrade its access network - the connection between customers and the exchange. It has identified 37 exchanges in the greater Dublin area serving 660,000 lines that it proposes to upgrade to VDSL technology, which could support speeds of 25Mbit/sec for downloads and 5MBit/sec for upload. It would do so by running fibre-optic cable to the telecoms cabinets connected to these exchanges and VDSL cards in the cabinets.
Geoff Shakespeare, Eircom's chief technology officer, says that upgrading the access network is essential to meet the competition it is facing from cable television provider UPC Ireland, which owns Chorus and Ntl. About 50 per cent of its network is upgraded to provide speeds of 50Mbit/sec and by 2009 it plans to be capable of offering 100Mbit/sec connections.
"This would enable us to deliver TV services such as high definition on-demand services to our customer base," says Mr Shakespeare. "There's a limit to what we can deliver from the exchange which is about 8MBit/sec due to the signal to noise ratio on the line. That's just a physical law."
BT Ireland's chief operations officer, Mike Maloney, while welcoming Eircom's investment in the core network, believes that its fibre-to-the-cabinet strategy will wipe out competition in the market. He also questions whether there is demand for such high bandwidth from users because the services that require them are not currently available.
BT has just upgraded its equipment in six Eircom exchanges to ADSL2+ which will provide speeds of up to 8MBit/sec, which Mr Maloney says is more than adequate to provide new TV-over-broadband services.
The service is available to new BT customers connecting to the Tallaght, Dún Laoghaire, Dolphins Barn, Terenure, Merrion and North Main (Upper O'Connell St) exchanges in Dublin.
Costing €42.50 per month, existing customers will be able to move to it from September.
Mr Shakespeare maintains that NGN has been designed from the ground up to be "wholesaleable". This means that competitors will be able to resell any of the services that Eircom offers to its own customers. "Currently they just buy a service from Eircom which Eircom defines. We want to get to a situation where the other providers can configure the service."
He gives the example of gaming or video on demand, both of which require connections with different characteristics.
In the middle of this argument is ComReg, which has to decide how it is going to regulate the introduction of NGN. Last week it released a statement which said that, during the move to NGN, there needs to be certainty around other operators' existing investments or the broadband market will stall.
The regulator has made it clear that unlike the vexed issue of local loop unbundling, which gives competitors access to Eircom's exchanges, it wants to quickly find an industry consensus on NGN. To that end, it has established the NGN industry steering group.
