Telecommunication Infrastructure and Regulation

Accounting for 3% of Irish gross domestic product (GDP), the telecommunications sector is expected to be worth more than 2.5 billion pounds by the end of the decade.[1] However, most industry observers predict that the telecoms sector will not recover for several years and more job losses are likely as cash-strapped firms come under more financial constrain. Several of the big telecommunications infrastructure companies, including Global Crossing and 360 networks which had significant Irish operations, went bankrupt and abundant telecommunications capacity undermined the price of their products.

Statistics

• Phone lines per 1000 (teledensity): 2.3 people per phone^[2]
  
• Cell phone usage per 1000: As of September 2001, mobile phone penetration rate was 70%, up 22% from the previous year.

Facts

Domestic Telecomm Players

Liberalization and Deregulation

Office of the Director of Telecommunications

The Office of the Director of Telecommunication Regulations (ODTR), established in 1997, is the statutorily based body charged with the regulation of the telecommunications industry in Ireland. The ODTR does not devise or run the services offered, but facilitates and monitors their development to ensure that Irish consumers receive the high quality products and services, from the widest choice and at the lowest price. The ODTR is responsible for the licensing and regulation of all communication transmission: i.e., the delivery networks for telephony, television (both analogue and digital), radio networks and most recently the postal network. More specifically, the ODTR’s regulates the following:

• traditional telephone wire

• traditional television and radio

• cable

• radio communications including fixed wireless

• mobile operators providing voice and data services

• satellite

• postal delivery network

Fixed Line Telephony: Ireland’s Minister for Public Enterprise introduced full liberalization of the telecommunications market on December 1, 1998, opening up the telephony market. Accordingly, the ODRT developed simple licensing schemes, the interconnect and numbering regimes and dispute resolution procedures to drive liberalization. As a result of these actions, users have benefited from reductions in prices and greater supplier choices.

Television Delivery: In January 1999, with the consent of the Minister for Public Enterprise, the regulatory framework for television delivery was updated and arrangements made to encourage competition with the adoption of new regulations for cable and Multipoint Microwave Distribution System, also known as Multi-channel Multi-point Distribution System and wireless cable. These regulations imposed obligations on service providers with respect to roll-out service, upgrading to digital standard, price and quality of service (QoS). The intention is to ensure universal provision of advanced service and at least some choice of supplier for consumers.

Mobile Telephony: In 1998, the ODTR attempted to introduce further competition into the mobile market by promulgating regulations. Following legal challenges, which delayed the ODTR decision until 2001, an additional mobile network operator joined the market, bringing to three the number of operators. The ODTR is currently preparing 3G mobile licensing that will expand the range of services and increase competition in the mobile market.

Fixed Wireless Access (Wireless Local Loop): In the middle of 2000, six new fixed wireless access licenses were issued, increasing competition and providing for cheaper and more flexible access to the last mile in broadband and narrowband services for business and residential customers alike.

Satellite Services: To encourage and develop the use of satellite technology, the ODTR developed a framework which licenses satellite services in Ireland for the first time. Additionally, the new regulations license Teleports with are capable of carrying and relaying huge volumes of voice and data traffic to a range of satellites across national borders. Internationally, satellites are used for many purposes including television broadcasts, meteorology, surveying and telecommunications.

Radio: The ODTR has streamlined and automated the regime for radio links used to carry radio and telephony. Management of the radio spectrum is done within an international context, primarily due to the need for cross border coordination of the use of frequencies to avoid interference. The ODTR is responsible for managing the radio spectrum – the “airwaves” – in Ireland, allocating spectrum for specific purposes and assigning spectrum to users and dealing with interference issues.

Postal Sector: The market for letters/packets of 350-grams is fully liberalized with the ODTR concentrating on securing improvements in the quality of service such as ensuring universal service with daily deliveries and preventing unfair competitions by cross-subsidization of services open to competition with excess charges on services which do not face competition.

Telecommunications Liberalization in Ireland

• Full liberalisation took place on December 1, 1998. Prior to that, a number of significant areas had been opened to competition. These included:
• The provision of fax, data and value added services. This area was liberalized in 1992 and over 50 liceences were granted prior to full liberalization;
• The provision of mobile telephony networks and services. In addition to Eircell Limited (a subsidiary of Telecom Eireann), a second mobile telephony operator (Esat Digifone) was licensed in 1996 to operate a digital GSM mobile telephony service. A competition for the licensing of a combined GSM 900 and GSM 1800 service was conducted by the ODTR in 1988;
• the provision of satellite based telecommunications services;
• The provision of infrastructure for already liberalized services.

Benefits of Liberalization for the Consumer

Analysis

Telecommunications Investment & Dividends