Broadband in Ireland - redefining the term Snail Mail

Ireland, for some time now, has been considered a high tech and innovative economy. One of the main reasons for this is that we have being playing host to some of the world’s largest multinational technology based companies such as Google, Microsoft, Dell and Intel among others.

However, do not be fooled. These companies are not here because we have a highly educated work force or a superb IT infrastructure. No, these companies are here for the tax incentives.

Ireland provides a low corporate tax rate of 12.5% on trading profits and these large international companies are making hay while the sun shines.

In 2005 it was uncovered that an obscure subsidiary of Microsoft, Round Island One Ltd., controlled more than $16 billion of Microsoft’s assets with gross profits of nearly €9 billion alone in 2004 helping the computer giant shave €500 million from its annual tax bill.

Top executives at Dell Computer’s Irish operation shared over €3.8 million in tax-free dividends between 2003 and 2005. These dividends were paid through a patent royalty company called Dell Research Ltd. Accounts showed that it had accumulated $91.7 million in retailed profits, none of which was subject to tax thanks to Ireland’s tax exemption on patent income.

This, of course, is all good news for the Irish economy. In the current economic climate, Ireland need’s to appear attractive to foreign investment. The profits may not be staying within our shores, but it does mean more employment.

In truth Ireland is far from being a high-tech economy. In reality we are a country with most national systems sourced from foreign contractors, running on outdated IT systems across a slow, unreliable substandard broadband network.

I own a technology based business, I enjoy no tax incentives of any kind and I am writing this article from the plush lobby of White’s Hotel in Wexford because Eircom broadband is down in my area and I have had to resort to using the free wireless broadband provided so generously by Whites for merely the cost of the odd cup of coffee. But if it were not for the hotel’s hospitality, where would I be? A whole working day lost. Most business can ill afford the loss of a full day’s work and I can assure you that mine cannot either! (The site of people doing business on their laptops in hotel lobbies across the country is a common sight and it’s not just based on the popularity of working remotely but very often the appeal of better broadband speeds such as you get in Whites or the Osprey in Naas for instance.)

Across the country, if you were to ask anyone who uses the internet on a regular basis, be it for business or personal use, they will all have tales of pulling their hair out waiting on painfully slow connections or having to reset their modems every 5 minutes thanks to drop outs or waiting endlessly on the phone to talk to someone in broadband support who will likely have the vocabulary of a 3 year old. In fact, the majority of the time, a 3 year old would be more helpful.

A global study published by FinFacts.com this year , which took into account 66 countries, reveals that Ireland get’s a 16^th ranking for household penetration, falling well behind developing economies such as Nigeria, Latvia, Estonia, Hungary and Turkey. Ireland comes in a 31^st place for quality compared to Estonia’s 5^th place ranking. South Korea tops the list with a 72% improvement in quality in the last year thanks to the continuous efforts by the government to strengthen the country’s position as one of the world’s leading ICT (Information & Communication Technology) locations. Ireland is also lagging behind the rest of the world in connect speeds. Not too long ago it was considered that only online gamers and people downloading music and video required fast broadband connections but more and more we are seeing technology based startup businesses struggling against the noose of slow broadband. So of the countries which our young entrepreneurs are trying to be competitive against have over 10 times the connect speeds most can expect here. In parts of China, for example, most new households have Fiber Optic cables laid right up to the front door meaning that when the residents move in, they have broadband speeds of over 100MB available to them. And that’s Home Broadband, never mind paying extra for an upgraded business connection. I know this because a Chinese friend of mine was boasting one day in college about getting the connection into his house back home. Granted, this was over 5 years ago and it was only 50MB back then but in contrast, this country was mostly operating on ISDN which tore along at a whopping 128kbsps or 0.128 MBs and that was if you were lucky!  In global business, Ireland is already a small fish in a big pond; we could do without our embarrassing broadband acting as a lead weight, dragging us to the bottom.

IrelandOffline’s,  Eamonn Wallace recently pointed out that “with the lowest telecommunications investment in the developed world (as a percentage of GDP), we are therefore guaranteed to remain in mediocrity”.

Our score of 16^th place for penetration seems misguided though when you are on the ground and in the trenches. I have lost count of how many people I have heard complaining that they cannot get broadband because they are too far out of town in the countryside. Sixty percent of our population lives outside major cities and the broadband service outside any of our towns is practically nonexistent unless you count using one of the mobile broadband services provided by the likes of O2, Vodafone and 3.

Mobile broadband services from companies such as O2, Vodafone and 3 are mainly complementary services to fixed line connections. Many people resort to them when their main service goes down or when they are on the move. In keeping with this, some of the mobile providers are throwing their lot in with the big fixed line providers. Vodafone have recently teamed up with BT to provide a fuller package in direct competition to the Eircom/Meteor matchup. This is all grand and well if your living in a built up or metro area but it’s getting away from the fact that many businesses and residential users are feeling overlooked in the grander scheme of things.

Business people across the country are frustrated at the poor broadband coverage available to them when trying to access the internet and their e-mail messages.  A recent article in the Clonmel Nationalist newspaper highlighted the problem for Mullinahone resident who were forced to take their laptops to a graveyard in Kilbride in order to access broadband.  One angry resident was quoted as saying that a friend who lives in Lapland, near the North Pole, has better broadband service than she has here in Ireland.

This may sound like a crazy situation but there are cases of this kind of thing all around the country. In my previous employment in Naas town, I found myself with a lot of data that needed to be uploaded to the net. Our main broadband was down in the office due to a fault on the incoming line. I was also paying for a mobile broadband service, just in case, but this did not have the capacity I needed so we were forced to rent a room in a local hotel so that we could use their broadband overnight to upload the data. This is the kind of ridiculous situation many regional businesses find themselves in all too often.

A study carried out by networking giant Cisco revealed that overall average broadband download speeds across the globe by 49% in the last year to 4.75 Mbps and Upload speeds increased by an average of 69% to 1.3 Mbps. However, across our country, on average download speed is 0.5 - 1.5 Mbps and our upload speed averages at around 0.4 - 0.8 Mbps. Now, very fast upload and download speeds are not merely a necessity of spotty geeks that sit in their rooms all day illegally downloading music and movies. More and more businesses in this country conduct a lot of their business online and required fast reliable broadband to conduct this business. A decent upload connection was required to post the articles and images found on this website. A decent download speed is required by many businesses to download their emails with large attachments. With a high speed connection, people can work flexi-time from home, logging into their work from their home PC or laptop. Meetings can be held via webcam rather than getting on the road.

The Communications Minister, Eamonn Ryan has claimed that several key projects were being rolled out to enhance broadband connectivity across the country. Mr. Ryan also claimed that Ireland would be positioned as a leading country in communications and technology innovation by 2012.

An average speed test of my so-called 3MB download and 1MB upload broadband connection at off peak time

Unfortunately, as detailed above, numerous studies by respected organisations around the world have shown this to be pure fantasy. The reality is that the abysmal state of broadband in this country is preventing many businesses from operating effectively on a global level and even preventing many would be businesses from accessing the global internet market. Something needs to be done and done quickly if we are to emerge from this recession in a position to be effective and competitive as a high-tech, innovative, smart, knowledge economy.
William Roche - Founder of ArkLifeMedia