In July 2014, Vodafone and energy company ESB agreed to invest €450 million in an FTTH network in Ireland. Sean Atkinson, CEO of the joint venture company SIRO, discusses progress so far
Eurocomms.com: ESB is a utilities company. Why did it decide to get involved in this project?
Sean Atkinson: ESB has had fibre optic cable on its High Voltage (Transmission) lines for 15 years, which was used as backhaul, and in the last decade has invested €8 billion in its local (distribution access) network refurbishing it and making it robust.
With the demand for increased connectivity growing rapidly, ESB saw a need for access fibre and conducted trials to see could it deploy fibre deeper into its network, and bring something that had never been offered in Ireland – fibre all the way to the building.
This is an exemplar project, which uses ESB’s low to medium voltage electricity infrastructure in a smart, efficient way to deliver FTTB broadband.
What is Vodafone’s involvement?
In terms of delivery, Vodafone brings a wealth of experience from international markets including deployment of GPON in Portugal and Spain, 10 markets with NGA network, 33 million homes with NGA infrastructure and 5.5 million broadband customers.
Vodafone also has significant experience in the area of wholesale agreements.
Given this is an open access initiative, what sort of interest have you had from other operators?
Vodafone is our first retail partner but we have had a lot of interest from broadband operators.
As negotiations continue before the service is launched this winter, we are bound by confidentiality not to reveal their details.
What are the biggest challenges you’ve encountered?
When ESB and Vodafone originally announced their intention to form a Joint Venture Company back in May 2014, there were still a number of hurdles to clear such as securing European Commission approval at the end of last year.
Since then we have accomplished a whole range of milestones such as the formation of the company, recruitment of staff, building our systems, tendering for contractors and conducting trials in Cavan which have been an invaluable element of ensuring that we deliver the best product to service providers.
We have done the groundwork and are now on track to have the service available this winter.
What about the operational challenges faced with deploying a 100 percent fibre network, specifically?
There are two important things to note. First, this network roll-out is the first of its kind and it depends on a number of factors including access to skilled contractors who are qualified to work on the electrical network.
We have taken a lot of time in planning the rollout of the network and selecting the right partners in order to overcome any challenges we may have anticipated.
Second, it is important to note that we are essentially a start-up and have had to develop everything from scratch, which includes our systems to be able to offer our service to broadband operators on a wholesale basis.
As a result, we have put a lot of time into trials, which have been an invaluable element of ensuring that we deliver the best product to service providers.
You aim to reach 500,000 premises with the €450 million, which works out at €900 per premise. How confident are you about receiving an RoI?
SIRO is a commercial venture and we built a business case based on the demand for high quality broadband in regional Ireland.
As such, we identified 50 towns with more than 4,000 premises, which are topographically and geographically accessible and which are not served by high-speed broadband, for the first phase of the project.
SIRO’s key differentiator is that it is a 100 percent fibre-optic internet connection, making it different and better than any other broadband infrastructure in Ireland, with no copper connection at any point in the network.
Instead of simply investing in a network to cater for today’s demands, this project will future proof Ireland for the range of demands of customers have now and more importantly into the future.
We will deliver a product of 1GBps to retailers. It will also be a key enabler for a knowledge based, services led economy and help to attract investment for the areas the service is available.
With recent data from ComReg, the Irish telecoms regulator, showing that 36 percent of fixed broadband customers in Ireland receive less than 10 Mbps, direct access to 100 percent fibre broadband of up to one gigabit per second will transform the internet experience of small and medium businesses, remote workers and consumers.
Therefore we are very confident that there will be demand for our service.
You’ve said that there is scope for a second phase if the initial deployment goes well. How confident are you this will happen?
Our focus at present is on the first phase of our rollout, but given the level of interest in SIRO since we announced the project we have identified an additional 320 towns that we would target as part of a second phase.
The second phase could run in tandem with the rollout of the first phase.
We will also tender for the National Broadband Plan, which is the Irish Government plan to provide basic connectivity (30 Mbps) to all Irish consumers.
Is SIRO a viable model for other countries to follow?
While electricity infrastructure has been used to roll out broadband in cities and towns, this is the first time that electricity infrastructure has been used to roll out fibre to the building broadband on a nationwide basis in Europe.
Ireland is well placed because ESB owns and operates the distribution system on the whole of the island of Ireland, and that infrastructure is in very good condition having been fully refurbished over the last 10 years.
The new EU Commission Directive encourages better use of existing public infrastructure for broadband delivery as part of the EU 2020 Digital Agenda, Ireland is actually pioneering in this area.
Where countries have robust electrical infrastructure there is no reason that the model could not be replicated.