O2 Ireland to launch broadband product

21-06-2006

by Maxim Kelly

O2 is expected to launch a broadband product in Ireland over the next few months, ENN has learned.

On Wednesday, O2 became the third mobile operator to delve into the fixed broadband market in Britain with an announcement that it has bought broadband provider Be for STG50 million. This leaves Ireland as the only market where the Spanish-owned mobile phone company does not have a broadband product -- though this could be about to change.

"O2 is examining the broadband market in Ireland at the moment and is hoping to leverage the experience of our broadband activities in Germany and particularly in Czech Republic, both of which are doing very well," an O2 Ireland spokesperson told ENN.

It is understood that O2 Ireland is not, as yet, interested in acquiring a small fixed broadband provider in Ireland as it has done in Britain, but will instead introduce a mobile broadband package based on High-Speed Download Packet Access (HSDPA) technology. The company said it will be ready to make an announcement "over the coming months".

O2's latest acquisition, Be, is one of the smaller broadband providers in Britain, but attracted O2's attention because it is installing its own equipment in BT exchanges. Be intends to install ADSL2+ broadband technology, offering speeds up to 24Mbps, in 400 exchanges by the end of the year.

If Be, which was formerly owned by BT, reaches its 400 exchange target it will have access to an estimated 50 percent of the UK population.

However analysts at Ovum sounded a note of caution. They said Be founder Boris Ivanovic had expected to have 580 telephone exchanges unbundled for broadband by the first quarter of 2006 and "has clearly fallen well short of that target, which we always felt was ambitious in the extreme," Ovum analysts said in a statement.

Last week O2 Ireland's competitor Vodafone introduced a flat-rate 3G internet service, and said it will launch a HSDPA 3G broadband network in Ireland later this year. HSDPA is a mobile telephony protocol which can handle bandwidth up to 8Mbps, or even 10Mbps.

In Britain, mobile operator Orange recently unveiled a service that offers broadband connections to mobile subscribers paying more than STG30 per month, and Vodafone UK is reportedly in the process of linking a fixed broadband service with its wireless package.

Meanwhile, O2 is also dipping its toes into the British retail business by acquiring DSG's 60 percent stake in The Link chain of mobile phone stores (O2 already owns a 40 percent stake in the chain). O2, which itself was bought by Spanish telecommunications giant Telefonica last year, is expected to pay STG30 million for control of all 300 of The Link's shops, which includes eight stores in Northern Ireland.

Chief executive of DSG, which owns Dixons, John Clare, told reporters that the retail market for mobile phones had "changed significantly" and was now best suited to networks and telecom services providers. "The sale of The Link will enable us to focus on our core multi-channel electrical and computing formats as we pursue our leadership ambitions across Europe," Clare said.