Mr. Kevin O'Brien:

Good morning, Chairman and members of the committee. It is good to meet everyone again today. As my colleague has mentioned, I shall talk about fixed networks. I shall describe what networks are on the ground and who is building them. I shall then talk about how those networks are being sold to consumers. I shall give the committee an overview of what is happening in that regard.

My first slide shows information on household broadband penetration. It shows the current take-up of household broadband in Ireland. There is nearly 100% availability of basic broadband in this country. Satellite, for instance, will cover virtually every house. High speed broadband is a separate matter that I shall discuss shortly. The graph on page 5 captures where we are in terms of actual households with broadband. As members can see from the graph, take-up is improving all of the time. At the moment Ireland is slightly ahead of the European figure of 80%.

The next slide is fairly busy but I shall use it to explain how networks are being built in Ireland. The graph shows broadband subscriptions by platform and is colour coded. I shall start by explaining that navy represents the cable network. One can see that the cable network in Ireland passes around 800,000 houses. It is owned by Virgin Media which used to be called UPC until recently. Cable networks are used more in urban areas but not so much in rural areas, and it is historic in terms of its footprint. We have seen massive increases in the speeds that Virgin Media is putting on the market. Its most recent advertising campaign talks about 359 Mb. Traditionally, this network sold TV but for the past six or seven years, it has invested in high speed broadband. This is entirely separate from the Eircom network. It is the traditional cable network. There has been a take-up of the cable network in urban areas. Of the 800,000 that are passed by this network, more than 300,000 now take broadband from this network. There are approximately 2.3 million premises in the country so a figure for roll-out can be judged against same.

On the same graph, one can see that the yellow bands turn into light blue and represent the Eircom network which has recently been rebranded Eir. Traditionally, the Eir network used the copper cables that go into all of the houses. In the past two to three years, Eircom has aggressively rolled out high speed broadband by installing fibre into these networks from the local exchange out to the cabinet placed at the end of the road or the end of the housing estate. Putting the fibre into part of the path to the house means that broadband speeds have increased greatly. The graph shows the declining volume for yellow which is the more traditional copper-only broadband which has a maximum speed of up to 30 Mb. The light blue piece depicts the fibre-based higher speed broadband that Eircom has invested in.

The grey band represents what we have called fixed wireless operators and Imagine is one of the well-known providers. Over the past ten years, these operators have made a huge contribution, particularly in rural Ireland, and before fixed networks arrived, in providing service. One can see on the graph that there has been a decline in the number of people using the technology as it uses lower speeds. We have various plans for spectrum releases which may benefit this market. My colleague, ComReg Commissioner Fahy will talk about those in a while.

The bottom of the graph shows a green band which represents mobile broadband. Traditionally, this would be the dongle at the back of a laptop taking broadband off the mobile networks for fixed purposes. This technology has been very substantial and successful in Ireland. The graph shows a decline in its usage as fixed networks are rolled out further.

The next slide shows the total fixed broadband subscriptions by speed in Ireland and the red piece represents speeds greater than 30 Mbps, which is an important figure. The European Commission has set a target for the Continent that by 2020, everybody should have 30 Mbps which shows it is seen as a minimum for the future. With 30 Mbps, one can pretty much do everything that the modern household wants to do today. The graph shows there has been a significant increase in the red piece and represents where we are above that speed in Ireland. The graph shows how broadband speeds have improved.

With this graph, I will briefly talk about competition in the marketplace. The blue piece at the top shows Virgin Media, the cable network, which has invested in its high-speed network, is gaining customers and has increased its market share. In recent years, we can see the entry of Sky, and we can see the Vodafone market share in red in the middle. Sky and Vodafone provide fixed broadband into people's houses off the back of the eir network. This is where ComReg's regulation is central to the story. By regulating eir in various ways, we allow other operators to use its network, which would not happen otherwise. This brings competition and choice and affects prices. In green, we can see eir, formerly Eircom, with a declining market share in broadband as competition increases.

The next slide captures, for two different speed baskets at a point in time, some prices in the market. Rather than concentrate on any detail, the slide shows that for different baskets of broadband speed, a large number of operators are offering products at different prices. Approximately 30 entities are selling broadband in the Irish market. Some of them are very big players. This shows the choice the consumer has in price and product.

My next two slides summarise what I have been talking about. Through the cable company and investment by eir, there has been significant roll-out of high-speed networks. The total number of premises in the country is 2.3 million, and eir has passed 1.3 million premises. According to its quarterly financial reports, published this morning, eir has passed 1.4 million premises and according to its public statements, it will reach 1.9 million premises with high-speed broadband. Virgin Media covers almost 800,000 premises with its cable network. The joint venture between Vodafone and the ESB, known as SIRO, is putting fibre onto the electricity networks around the country with a target of 500,000 homes. Members will be aware of this, given that legislation to allow the establishment of the joint venture was passed by the Oireachtas.

There are three players in the country - eir, Virgin Media and the SIRO project - with significant ambitions around high-speed broadband fixed networks. Our coverage for high-speed broadband measures well against the EU average. Wireless continues to play a very important part as wireless technologies develop in high speed. As members are aware, the Department of Communications, Energy and Natural Resources has set out plans for a State intervention to cover the remaining part of the country that does not have a market-delivered high-speed network.

The networks are all competing and, due to regulation, many companies compete using the eir network. The way they are competing is changing. More and more, they are selling bundles. Last week, Vodafone launched Vodafone TV. We now have eir, Vodafone, UPC and Sky all selling TV, broadband and telephony together, and many of them also include mobile services. The way they try to attract new consumers is changing with these new technologies and new investments on which they are trying to recoup a return.