Infrastructure is usually a barrier for Northern Ireland’s businesses that creates a competitive disadvantage. But with telecoms, Northern Ireland is actually moving ahead of the rest of the UK and most of Europe. Two major projects are giving Northern Ireland its strong position: the roll-out by BT of super-fast broadband; and Hibernian Atlantic’s Project Kelvin telecommunications link with North America.
Frank McManus, BT’s head of wholesale services in Northern Ireland, describes the laying of fibre networks for high speed broadband as “a massive engineering task”. He explains: “We have 3,000 cabinets across NI and by March next year over 2,500 of these will be fibre. The great thing from my point of view is that we have employed 25 new engineers and we will employ another 60 to meet the demand. People want it.”
Businesses here will benefit from superfast broadband sooner than elsewhere in Europe, says McManus, so they will “have first mover advantage”. He adds: “Northern Ireland will be way ahead of its main international competitors, not just by March 2012, but still by March 2015. We will be ahead of Germany, GB and others.”
The fibre to cabinet technology being deployed by BT provides download speeds of up to 40Mbps and upload speeds of up to 10Mbps. This is giving some small businesses already connected to the higher speed broadband the chance to transform the way they operate and to win contracts away from British companies without access to the same broadband speeds.
The impact is particularly important for the rural economy, suggests McManus. “In the past, rural businesses might have been forced to move to large urban centres to obtain high speed broadband, if they could afford the much higher rents,” he says. But as high speed broadband reaches villages, so more rural businesses will be able to set-up, thrive and expand.
BT is a main sponsor of Londonderry as City of Culture 2013 and, as part of this, is fast tracking the introduction of super fast broadband to Derry in advance of much of the rest of NI. Derry’s urban regeneration company Ilex hopes that this, plus Project Kelvin, will encourage a range of ICT-based businesses to operate from the city. The same factors have encouraged the city’s chamber of commerce to launch an initiative to try to make digital creative businesses a major industrial sector locally.
But while Project Kelvin has Derry as the location of its telehouse, the significance goes far beyond the location of the telehouse (though this was bitterly fought over between Derry and Coleraine). Project Kelvin is the trans-Atlantic telecoms cable that runs from North America to Ireland, with spurs to key cities and towns in Northern Ireland and the border areas of the Republic. The €30m scheme is jointly funded by DETI, the European Union’s Interreg programme and Ireland’s Department of Communications and Natural Resources.
One potentially significant issue is that while for a long time it was argued that digital technologies would make location irrelevant, the ‘nanosecond advantage’ for Ireland in receiving data from North America could potentially create a very lucrative opportunity for Northern Ireland. Automated computing technologies could use Northern Irish locations adjacent to the Project Kelvin telehouse to move funds instantly to take advantage of early knowledge of, in particular, arbitrage opportunities.
Enterprise Minister Arlene Foster has become very bullish about what these technologies mean for business here. “Today’s society values good communication and it is an area that the Executive has made significant investment in over the past few years,” she says. “Project Kelvin brings direct international connectivity to Northern Ireland for the first time.
“The Project Kelvin network means Northern Ireland has a fast, low cost and resilient telecommunications link to North America, with improved connectivity in Europe. Northern Ireland businesses now have access to the same international telecoms services found in major cities like Amsterdam and New York. In the current economic climate, we must give every possible advantage to Northern Ireland companies to enable them to compete in the global export market. This international telecommunication capacity provides increased opportunities to sell goods and services overseas.”
The minister adds: “Having one of the best telecommunications infrastructure in Europe will help to attract a more diverse range of high growth, high value companies to Northern Ireland and enhance local companies’ potential to grow their export business.”
There remains one area, though, where Northern Ireland lags behind. Mobile coverage is much poorer in Northern Ireland than anywhere else in the UK and user satisfaction levels are also very low. DETI is aware of this and has asked the UK Government to allocate money from the UK Broadband Fund to improve mobile broadband. Arlene Foster also hopes that the industry regulator, Ofcom, will push mobile providers to improve the coverage of mobile technologies here.
The minister complains: “Ofcom’s existing UK-wide targets mean that mobile phone operators do not have to provide high quality coverage across Northern Ireland.” But Ofcom cannot simply require mobile operators to improve coverage in Northern Ireland – any such stipulation would need to be included in the operating licences. One possibility is for more mobile spectrum to be awarded on an Ireland-only basis, as happened recently with both Irish jurisdictions awarding spectrum licences to Personal Broadband.
Jonathan Rose, regulatory affairs manager for Ofcom Northern Ireland, says: “Ofcom is fully aware of the concern that there is in Northern Ireland, and elsewhere, at the poor level of 2G and 3G coverage available in some areas. We have identified a number of options for how such deficiencies in coverage might be rectified and are developing the most promising of these with the intention of consulting on them later this year.”
With O2 achieving a dominant position in the mobile market in Northern Ireland – it has 67% of mobile business, compared to just 12% for Everything Everywhere (the name for the now combined Orange and T-Mobile businesses) and 11% for Vodafone – what matters most is O2’s investment plans. A spokesman for O2 says: “In Northern Ireland, we plan to deliver a significant number of 3G sites this year and deploy a new band of network spectrum in Belfast -900 MHz – which will deliver increased 3G capacity, faster speeds and better in-building coverage for our customers.”
Vodafone also promises that mobile coverage in Northern Ireland will improve substantially in the coming months. A spokesman says: “We have recently picked Belfast as a key important city, which will receive over-indexed investment this year. And over the next couple of months we are doubling the number of 3G sites we have in Northern Ireland, putting in a lot of extra masts across Northern Ireland, doubling our 3G coverage in Northern Ireland.”
A spokeswoman for Everything Everywhere says “we are continuing to invest in our networks to improve coverage and increase capacity,” without making any specific commitments for Northern Ireland.
Despite the promises of greater investment in mobile technologies, it looks as if progress will be much faster with fixed line technologies. This suggests that Northern Ireland businesses may evolve in ways that exploit the fixed line opportunities, in preference to mobile. Yet it seems clear that businesses here have, for once, a clear infrastructural advantage.