White Lies – Black Lies – McRedmond Lies


Dear John Doherty,

In a presentation in June 2004 in Tipperary, Eircom have shown this slide:



35% ADSL availability by March 2005! They must be joking. That’ll really make us the laughing stock of Europe.

And your man Eoghan Callan has the neck to state in the conclusion of his presentation for Comreg, at the same event: “To date limited competition and lack of consumer interest have held back Ireland’s broadband market." What a bloody insult to the Irish consumer! If the “specialists” in Comreg ["Eoghan holds a Masters Degree in Business Economics and is an analyst in Com-Reg's Regulatory Product Development team. Eoghan specialises in issues related to broadband and business case analysis."] are coming up with such utter bullshit, it’s no wonder we are where we are: at the bottom of the EU, when it comes to broadband.

You know that ComReg needs to get real. You are not forgetting my binding directive to ComReg, to bring the Irish enduser broadband access and take-up to at least the EU average by mid 2005?

That Eircom director McRedmond is going around and telling fairy tales to the public about his company's broadband achievements, possibly to influence the stock exchange. As ever, the Irish media are printing his stuff without questions, but we have to put an end to that. As a director of a publicly traded company he should not get away with spreading such deliberate and substantial misinformation.
The EU Market Abuse Directive, which sets a common framework for tackling market manipulation in the EU and the proper disclosure of information to the market specifically prohibits the “dissemination of information through any media or by any means which gives, or is likely to give, false or misleading signals as to the supply, demand or price of financial instruments, including the dissemination of rumours and false or misleading news (dissemination of false information).”

I’ll enclose this interview-article (July 2004, Independent) and would like to ask you for an honest, personal analysis/opinion on the contents of the McRedmond interview.


Yours sincerely

Dermot Ahern
Minister for Eircon and Haddock.








Dear Dermot,

We in Comreg have access to the facts (for example the enormous percentage of lines that fail the broad band test) and could easily expose the lies – we do not, for a variety of reasons – so please treat this as my personal opinion:


White Lies – Black Lies – McRedmond Lies

Summary: The financial director of uber-dominant Irish Telco Eircom David McRedmond is blatantly lying to the public and his shareholders about the performance of his company with regards to its broadband development. There is no "over 70%" broad band access and Eircom has no intention of bringing Ireland into tune with Europe, where broadband access is in the 90% to 100% bracket.


McRedmond uses a proven trick of demagogy: telling little lies to hide the big one. Albeit his little lies are already quite sizeable. The financial director of Eircom must feel so damned sure about the effects of having one of the biggest advertising and sponsoring budgets with RTE and the Irish print media that he does not fear to get exposed for his lies.


The medium sized lies:

McRedmond lie Nr 1: “As for higher level broadband products such as 1 Mbps speed…Most users so far are quite content with 512 Kbps… mirroring the experience in larger and more mature markets such as the UK, Germany, France and Italy.”
Fact: In all those countries the overpriced standard Eircom Mickey Mouse ADSL offer (512Kbps down, a lousy 128 Kbps up and a 4 Gig cap on the traffic at 40 euros/month) would be hard to find (it is still available as a niche product for beginners). 1 Mbps connections are becoming the standard, faster ones are widely and cheaply available.

McRedmond lie Nr 2: “On broadband pricing, McRedmond insists that Ireland is now at or below the EU average across all products”
Fact: Only in comparisons that favour countries with low speed (Mickey Mouse) ADSL, can Ireland’s ADSL pricing reach the EU average (see resources graph). And even those comparisons do not at all represent the reality for ADSL consumers: In order to get ADSL the user has to have a fixed line. This is nearly 10 euros/month dearer in Ireland than the EU average fixed line rental, bringing the cost of ADSL for the Irish consumer mightily above the EU average. For higher speed ADSL the Irish pricing is at the top of the EU price range.

McRedmond lie Nr 3: “Eircom currently has just over 100 exchanges enabled for ADSL, with 38 to go and the final completion of rollout to all exchanges due by the end of March 2005.”
Fact: Of the approximately 1100 exchanges, Eircom has a mere 100 ADSL upgraded, it will upgrade another 100 by March 2005. And that is the end of the planned roll-out. Eircom has no intention of bringing broadband to all exchanges, or to more than the easily accessible 60 to 65 percent of the population.

McRedmond lie Nr 4: “Right now we have a big supply/demand imbalance, in that more than 70 pc of the market has access to ADSL but demand or penetration is still between 3-4pc”
Fact: Eircom have ADSL enabled exchanges to which 1 million lines are connected. Even if all of those 1 million lines would be able to carry ADSL, and they are not, due to massive line failures (caused by substandard lines, money saving gear built into the lines or lines being too far out from the exchange for Eircom’s restrictive distance settings) about which Eircom is not doing anything (In the UK, if your line fails the ADSL test, BT will send out an engineer to remove the fault – leaving a percentage of only 3% of ADSL unusable lines and the promise that these 3% will be enabled with new ADSL gear soon), then we would arrive at a theoretical 62.5%. Even this theoretical number is a far cry from McRedmond’s “more than 70%”.
Picture: Not only is Eircom's network in a general desolate condition, but instead of growing the network for new houses and housing estates, Eircom have built in line splitters (the white box) left, right and centre. No broadband for those customers.



Where is the big lie, you ask?
The big lie, the truth that McRedmond does not want to get aired is this: “Over 70%” is trying to suggest some achievement, which it is not.
Even if we had over 70% availability of broadband in Ireland, that would still make us one of the worst countries for broadband availability in the EU.
Never mind whether we have 55%, 62% of over 70%. 70% broadband availability is a monumental disgrace – for Ireland and Eircom.
In NI they will have 100% broadband availability by the end of next year. In Europe we are generally talking in the over 90% region.
And the digital divide which Eircom is creating is abysmal: See above example of Tipperary, where Eircom plan to get a mere 38% of lines to originate from broadband enabled exchanges by 2005, thus enabling between 20% and 30% of lines.

Of course we’ll always have Greece to look down at.
Can you imagine any self-respecting EU country where, anno 2004, the director of the dominant Telco could go on public record and brag about an imagined 70% broadband availability?

That would drive anybody ballistic.*

Yours

John Doherty

*PS. Call me childish, but sometimes its nice to let off steam with this shoot them up computergame.

Put any picture into the shooting range, provided it is under 100 Kb in size, and have a go at it. Have fun.

resources:

1: Eoghan Callan's presentation can be found on the "Broadband in Tipperary" web site of the "Tipperary Institute".
Eoghan Callan's Power point presentation is here.
There's another "interesting" piece of analysis by Eoghan Callan from the NIRSA conference in January 2004 here.
2: Eircom's presentation is on the same website. Eircom's Power point presentation is here

3: ADSL pricing comparison:
These ComReg graphs do not take account of the fact that the Irish ADSL user pays roughly ten Euros per month more than their EU counterparts due to the prohibitive Irish line rental pricing.





4. Eircom's "One Total Commitment" farce (from their annual report and advertising)




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