4G to Empower Indigenous Digital Industry

Although both our economy and our people are depressed, there was a ray of light in this week’s auction of the part of the radio spectrum necessary for next-generation “4G” mobile networks. Our talented twenty and thirty year olds are joining the diaspora abroad, and the majority of my own circle of friends have fled, only to pop back up on Facebook from new locations such as Vancouver, New York, London and Japan. What’s particularly annoying are their Facebook updates, such as “ordered 100Mbps home internet last night for $30, installation finished this morning”.

Internet access of this scale, affordability and ease has been an Irish dream for over ten years, but for all our talk of our “digital economy”, it is one we have yet to realise. In Ireland, over 70% of us settle for broadband connections slower than 10Mbps. Although we encourage all our businesses to go online, it takes weeks to get one of these connections installed.

I wrote the following article, which was published in the Sunday Independent today, 18th November 2012.

The broader economy may be tanking, but the technology sector is hotter than ever. We all know we’re a second home to many of the world’s top software companies (Microsoft, Apple, Google, IBM, Intel, SAP, Accenture, HP etc.), making us one of the biggest software exporters in the world. What’s more exciting is the story we haven’t heard yet. We have a large crop of indigenous technology startups on the rise, some of whom may be the international giants of tomorrow. Startupwiki.ie alone lists over 300 companies, most of which did not exist five years ago. These represent just a fraction of the total, perhaps up to a thousand new tech-driven companies started by talented graduates who have chosen not to leave, but to stand their ground and build a home-grown industry. The previously vacant office space above the shops of Dublin is rapidly refilling, helped by a steady inflow of international talent and investment. With the calendar full of more entrepreneurial and technology events than it is possible to attend, it is a shame that one of the most common discussions is still “how do I get a good internet connection?”.

The indigenous technology sector has the potential rebuild our economy. These companies can be immensely profitable, selling goods made from electrons, not atoms. In contrast to our traditional companies, they benefit from global reach and zero distribution costs. Ten years ago, Ireland aimed to support its digital economy by creating the “digital hub”, a region of Dublin 8 with relatively good internet access. Today, the digital economy has moved out of the ghetto. With a billion people on Facebook, digital is pervasive. Shops and restaurants depend on social media almost as much as software companies do. Basic digital infrastructure – fast internet – must finally be an economic priority.

Now that the 4G spectrum has been parcelled out, we can expect things to improve. 4G, the successor to the 3G connections our mobile phones currently use, is coming to Ireland in 2013. The 4G rollout in other countries, such as the UK and the US, has brought internet speeds of over 40 megabits-per-second to mobile phones (over 5 times greater than the average Irish household broadband). Over the next 10 years, we expect 4G speeds to increase up to 1Gbps, or one billion binary digits per second. This is fast enough to download the full contents of a DVD in about 30 seconds.

The arrival of this technology means that businesses and homes will be able to upgrade their internet connections to mobile, massively increasing performance while skipping the installation nightmares associated with landline and cable. Even the remotest country cottage should be able to enjoy high definition video streaming on an internet connection a medium-sized business could be proud of.

For the technology rollout to be a success, we will need to invest more in our national digital infrastructure. Unaccompanied, a 4G rollout would be like having eight-lane regional roads, but dirt tracks instead of motorways. A working 4G network requires digital motorways to carry the national traffic, that is, we must lay down more fiber-optic cables across the country. The €850 million raised by the 4G auction can go a long way to achieve this.

We can now look forward to a digital infrastructure that can support our indigenous digital economy, but we must watch out for one last danger. The licenses granted will last until 2030, a period over which the four successful mobile network operators will recoup great profit on their investment. Meanwhile, they are moving away from flat-rate data billing to metered billing, so you pay for what you use. If current pricing is a guide, this means it will not be affordable to actually use 4G at full speed. Comparing three of the most affordable mobile data plans on offer in the market in Ireland, I calculate that using 4G at a 40Mbps speed would currently cost between €300 – €600 per hour. It’s rare for a single mobile user to download anything at this speed, but if we would like 4G to form part of a digital infrastructure for business, we will need serious price reform.

Sean Blanchfield is CEO of Scale Front, an Irish startup lab, organiser of Techpreneurs, a network of Irish startup entrepreneurs and former co-founder of Demonware. You can follow him @seanblanchfield.

Posted in Enterprise, Ireland, Life, Tech
One comment on “4G to Empower Indigenous Digital Industry
  1. Simon Dobson says:

    As long as the telcos don’t ratchet-up the price of broadband to cover their spectrum costs — which don’t seem excessive, in fairness — it should be a great improvement, especially for rural and semi-rural areas that are otherwise great places for internet start-ups.

    In other countries, a major problem with fibre roll-out has been getting right of way: or, to put it another way, the incumbent telco has a huge advantage :-). That applies to the core backhaul as much as to the last mile. I suggested about ten years ago to install a dark fibre run during every road-work, so that there’d be fibre at every roadside. Certainly doing this along the sides of the N-roads would make sense, and would reduce the connection and routing costs for the wireless roll-out.