When it launched in 2015, Siro's focus was on regional towns with poor broadband. The ESB's joint venture with Vodafone, a surprise addition to the State's increasingly complex telecoms landscape, was targeting, what it saw, as a major gap in the market.
About a million people live in the Republic’s 50 biggest towns. Most of these towns, back then, were in so-called broadband blackspots with residents reduced to patchy or low-grade connectivity.
Places like Navan, Sligo, Dundalk fell between between two stools. They had been neglected by the investment-starved incumbent Eir and ignored by the new wave of providers whose focus was on the high-value urban markets. They also fell outside the scope of the State-backed National Broadband Plan (NBP).
Siro's mandate was to build a fibre-to-the-home (FTTH) network into these areas using the ESB's network – the fibre optic cables can be hung off the ESB lines without compromising the electrical current.
Fibre offers much higher connection speeds and a more reliable throughput of data than fixed line DSL or mobile. With €250 million pledged from its backers and a direct line into every household in the State, via the ESB, it was a gilt-edged chance to jump in and take a big slice of the telecoms pie.
So how well has it done? "In three years, we've gone from zero to quarter of a million homes," Siro boss John Keaney says, noting Eir has similar metrics even though "it's being going for years". Both companies are locked in a fibre arms race and Keaney wastes no time getting a dig in.
“From a standing start that’s a significant build,” he says. “When we started, we had just the agreement that we could access the electrical infrastructure, that was it, there were no people, there were no contracts, there were no systems, no customers.”
Keaney takes me on a tour of Siro's new high-spec office in the Herbert Building, the largest of four office blocks in The Park development in Carrickmines, south Dublin. The main open-plan area is emblazoned with screens, showing order numbers, homes passed, appointments for installs and maps of live towns.
One shows Siro customers are consuming on average 350 gigabytes of data per month, equivalent to over 200 hours of video streaming, reflective of where the market is going.
Having initially hired 60 people, Siro now has 140 but most are out in the field, says Keaney. You can’t lay fibre sitting in an office, he quips.
Fibrehoods
When contractors are included, there are about 6,000 people involved in the telco’s fibre rollout, which now extends to 45 towns or “fibrehoods” as the company labels them.
When Keaney says 250,000 homes have been passed, he means that these homes now have access to Siro’s technology through the 10 operators using its platform. In terms of direct customers, it has 45,000, equating to a take-up rate of just 18 per cent.
Isn’t that low, particularly given the clamour for better broadband coming from so many of these regions? Low take-up rates were cited as a factor in the spiralling cost of the NBP. “It’s quite a crude percentage,” says Keaney, insisting “take-up takes time”.
It typically starts in the mid teens and moves to 25 to 30 per cent within 12 months, he says. "We've got towns that are more mature – Dundalk, Letterkenny, Drogheda – that are now in mid 30s," he says, which appears to be a target zone.
What's noticeable about the company's latest list of live areas is the inclusion of Swords, Carrickmines, Finglas, Cork city, and Galway city. These are not regional towns. Without flagging it, Siro has moved into cities, which is a worrying development for rival Eir. Keaney says the company was "taken aback" at how poorly served some of these urban areas were.
“While the reported average speed in these locations might be high, when you drill down into specific areas the local experience can be quite poor,” he says.
"Given the density of homes and businesses, we saw the commercial opportunity and were able to incorporate it into our plans in parallel with our existing build." He highlights areas like Howth and Foxrock, which he says, have been left behind. And it's unlikely politicians will be pushing for an NBP for places like Foxrock.
Irish telcos work under the assumption that there are two million homes in the State. In terms of homes passed with FTTH, Eir has 300,000, Siro has 250,000 and National Broadband Ireland (NBI), the vehicle set up to deliver the NBP, will have 540,000.
“That leaves one million homes in play,” Keaney says. He predicts Siro will do 200,000 of these, lifting its homes passed number to 450,000 and giving it a 25 per cent market share. It’s an ambitious target, one that will put it and its parent ESB nose-to-nose with incumbent Eir.
Telecoms is a tricky business with big upfront costs as the taxpayer is about to find out with the NBP. “About 90 per cent of the money is in the physical rollout of the fibre,” he says.
Siro's backers, however, seem happy with its progress to date. It has just secured an additional €200 million in funding from five banks – Natwest, BNP, HSBC, Ulster Bank and Royal Bank of Canada – to finance the next phase of its rollout, one that will deepen its operations in Cork and Galway while extending into areas like Howth, Malahide, Sutton and Ballyogan in Dublin, and to regional towns like Nenagh, Enniscorthy and Donegal. It is the largest FTTH debt-only package raised in Ireland.
Background
Originally from London, Keaney (49) is the son of Irish emigrants and marrying an Irish woman and moving to Ireland – he lives in Wicklow town, surprisingly not yet on Siro's to-do list – appears to have been a natural step. He says his extended family is dotted across rural Ireland and are not shy about confronting him with their broadband woes.
He was Siro's chief financial officer before taking over from outgoing chief executive Sean Atkinson, who was originally from the ESB. The switch is part of a contractual arrangement between the ESB and Vodafone, whereby one person from each entity assumes the chief executive role and chief financial officer, changing after four years. Before Siro, Keaney was with Vodafone for 10 years, most recently as its financial director.
Many can name-check Siro through its aborted participation in the Government’s stop-start NBP process, now an endless source of controversy. Siro dropped out in late 2017 having spent several millions on its bid, citing there was no longer a business case for its continued participation.
The real reason was, however, the Government’s last-minute deal with Eir, which saw 300,000 homes carved out of the original 840,000 and placed in Eir’s commercial rollout. This queered the pitch for rivals as it removed the quasi-commercial end of the project, upping the per-unit subsidy and lowering potential revenues.
Having been coy about admitting its grievance at the time, the company is now more forthcoming, but only marginally.
“When we recast for 540,000 (after Eir’s 300,000 had been taken out) it became very difficult to make a competitive business case to stay in,” he says. “I wish the plan every success. I think it’s a hard, slow rollout. I think it’s complicated.”
And of the NBP contract itself, which has been criticised as too onerous and overly complex?
“ It was a very extensive contract and rightly so as it is taxpayers’ money.”
But at close to €3 billion, does he think it’s value for money for the State? “It’s complicated, you’re doing this once, and it is needed, and there’s a social value to the rollout. It’s right that the Government look after the network and the money properly.”
Keaney is clearly loathe to criticise the NBP process or its spiralling cost despite Siro, the market challenger, having fallen out of the process. His reticence is easily explained. The Government, via the ESB, is Siro’s principal shareholder and the NBP is the Government’s principal communications project.
In a strange twist of fate, the Government’s privatisation of Eir in the 1990s starved the State’s communications infrastructure of vital investment at a pivotal moment, when the industry was switching from copper to more advanced conduits like fibre. Now the Government is backing the challenger against an incumbent it once owned. The ghost of Eir’s privatisation is never far away.
And what does he make of Eir’s recent intervention, suggesting it could do the NBP for €1 billion, a third of the current estimate, a move that was seen as deeply divisive? “We focus on what we’re doing,” he says.
Emigration
As the son of emigrants, the theme of emigration is close to Keaney’s heart. He sees Siro as key to addressing the digital divide and keeping rural communities intact. “Irish people emigrating for work has happened for generations, but today what is probably more pronounced is people moving from regional Ireland to our major cities like Dublin,” he says.
“ People are always going to travel for work or to see other parts of the world, but it should always be a choice, rather than a necessity. FTTH broadband is fundamentally rewriting the rules of commerce, with gigabit connectivity as important for business as railroads and canals were in the past.”
He believes Siro's arrival kick-started fibre in Ireland. "If you go back to 2015, no-one talked about fibre. The incumbent wasn't stepping up to do anything. That's probably the story around most of Europe, where strong incumbents only do something to improve the life of customers when they have to," he says, insisting that if Eir had rolled out a fibre network the opportunity for Siro wouldn't be there.
“When you boil that down, what that means is giving these communities the broadband connectivity to attract investment to their town, give people the opportunity to work remotely and make it attractive for entrepreneurs to set up in their home town rather than moving to a major city,” he says.
His tenure in charge of Ireland's challenger telco promises to be eventful with Eir's major new shareholder, French telecoms billionaire Xavier Niel, planning to invest €500 million expanding its fibre network in towns and cities, and the Government's long-awaited NBP scheduled to commence.
CV
Name: John Keaney
Job: Chief executive of Siro
Age: 49
Lives: Wicklow town
Family: Married with two children
Hobbies: Golf, pilates cycling, DIY and gardening
Something we might expect: He's passionate about diversity and inclusion, believing it leads to stronger, better functioning teams and organisations.
Something that might surprise: Worked as a carpenter during university and is a DIY enthusiast. Fully restored an old house in his early 20s
