THE ANNUAL Telecoms and Internet Federation (TIF) conference saw the influential figures of the telecoms industry from home and abroad assemble this week in Dublin Castle to mull over the industry's future prospects.
According to the federation's director, Tommy McCabe, new estimates reveal that the telecoms industry will invest over €724 million per annum in infrastructure over the period 2007 to 2011 with investment touching on fixed, mobile, wireless, satellite and cable infrastructure.
In the recent budget, the Government said that it was investing €49 million in broadband infrastructure during 2009.
While the federation welcomed this announcement, it pointed out that even this level of investment might not be sufficient to fund the national broadband scheme's aims of rolling out broadband to the remaining 10 per cent of the country where it is not commercially viable and to provide secondary schools with broadband.
Speaking at the conference, Minister for Communications Eamon Ryan said Ireland was well positioned to capitalise on an ever-growing and ever-changing digital market, with broadband set to expand rapidly and the "phenomenal success of mobile broadband". This, he said, had brought household penetration to over 50 per cent for first time.
Frank Sixt, executive director and group finance director of Hutchinson Whampoa, who are behind mobile company 3, which has been part of the shift to mobile broadband, agreed with the Minister. He said Ireland was generally going in the right direction, though it still has some more work to do in terms of the quality of the access space.
Hutchinson Whampoa has invested approximately €500 million into 3's operations here and according to its filed accounts for 2006 saw losses of €150 million, leading some commentators to speculate on its future support for the Irish wing.
However, Sixt told The Irish Times that those losses were built into the initial investment.
"To set up a full-blown network operation for a country such as Ireland, you go in with the expectation that your investment cost is going to be around €500 million to €600 million. We're more than pleased with the development of the mobile broadband business here.
"So there is no limitation on support for the Irish operation and I believe we're being well rewarded in Ireland for our investment. I look at it as something that will start to recover for us at some point in the 2009/2010 timeframe."
Even with the economy facing bleaker times, Sixt is still convinced those projections will not extend further. "Consumer economies may very well be contracting. However, I'm not sure that it doesn't actually benefit the broadband and mobile business on the condition that what we're doing is providing good value to customers which of course is a mantra for 3. We're here for the long haul. Consumer cycles are what they are and this is a sector that may benefit from harder times."
One of the interesting facets of Hutchinson's business is its involvement in the port business. Thirty per cent of the company's money comes from its port ventures, generating approximately $2 billion per annum.
In Ireland, it is involved in a joint undertaking between Drogheda Port and Real Estate Opportunities in developing a deepwater port in north Dublin. With development work on that scheme ongoing, does Sixt see any other Irish projects his company would like to get involved in?
"It's too early to tell, but the way we have operated historically is that success in a particular country has tended to build on itself. There's nothing definite on the horizon. But typically, what happened was our businesses tended to cluster in areas we've been well received and comfortable doing business in and so far Ireland is in that category."
