Weekly Digest
Weekly Digest Issue No. 443
27-11-2008
by Deirdre McArdle
Three nets National Broadband Scheme contract | Meteor the only bright spot in Eircom results | Dublin wins City of Science bid | StatCounter founder named Internet Hero | Facebook tries to befriend Twitter | Mixed fortunes at HP and Dell
Three nets National Broadband Scheme contract
In a somewhat surprising development, the Government on Tuesday announced that mobile operator Three Ireland has been awarded the contract for the National Broadband Scheme over rival bidder Eircom. The only two bidders left in the race to implement the scheme, Eircom seemed on paper at least to be the obvious choice; it's the leader in the broadband market and it owns the legacy infrastructure across the country. So what did Three Ireland have that stood out? When ENN asked the Department of Communications, Energy and Natural Resources a spokesperson didn't offer much more detail, saying instead: "Both companies were involved in a competitive dialogue and Three Ireland came through as the successful bidder." The spokesperson did say though that more detail about the contract will be released when it is officially awarded in the middle of December; Three and the Government are currently finalising the finer details. The National Broadband Scheme was developed to subsidise the delivery of broadband to areas of the country that are currently outside of broadband coverage. While it is not known exactly how much the contract will be worth to Three Ireland, the Government's 2009 Budget had set aside EUR45 million in capital funding for communications infrastructure. For its part, Eircom has said it is "extremely disappointed" not to have been awarded the contract. "Our bid would have delivered a level of broadband coverage which exceeded that required by the Government -- both in terms of geographic reach and available speeds," said the telco in a statement. It has to be said this is a good win for Three Ireland and naturally the operator is delighted with the decision. "As the country's leading mobile broadband provider, we have fought hard to bring Ireland up to speed in the broadband league tables by bringing increased competition to Ireland and implementing the best broadband technologies available... We look forward to working with the Department… to better connect rural Ireland," said Robert Finnegan, CEO of Three Ireland.
Meteor the only bright spot in Eircom results
As questions continue to be asked about Eircom shareholder Babcock & Brown, the Australian fund, the telecoms firm released its own quarterly figures on Wednesday. Group EBITDA (earnings before interest, tax, depreciation and amortisation) dropped 2 percent to EUR169 million from EUR173 million in 2007, while revenue stayed in line with the previous year at EUR513 million. Fixed line revenue continue to decrease, dropping 4 percent from EUR417 million in 2007 to EUR402 million, while earnings from fixed line services declined by EUR5 million over the year to EUR140 million. As has become traditional now in Eircom results, the telco's mobile arm, Meteor, continues to be the bright point. Meteor revenue jumped 9 percent over the year to EUR126 million, while EBITDA at the mobile unit increased by 2 percent to EUR29 million. The operator broke through the million-customer milestone during the quarter, adding 19,000 customers to reach an overall subscriber base of 1,002,000. During the quarter Eircom said it added 21,000 DSL customers, bringing its total to 614,000, representing a 25 percent growth on last year's tally. Overall though, the telco's results were underwhelming with CEO Rex Comb citing the "deteriorating economic environment" for the telco's lacklustre performance during the quarter. He added that the changing climate and "an increased focus on cost reduction across the group" meant the firm "remains committed to continued headcount reductions." It continues to be an unsettling time for Eircom at the moment: growing speculation about its future, the loss of what would have been a major broadband contract, and less than impressive results are all adding up to a forgettable year for the firm.
Dublin wins City of Science bid
There was much celebration this week with the news that Dublin had emerged victorious in the bidding to be named the European City of Science for 2012. The win means that Dublin will host the Euroscience Open Forum in 2012, a year-long programme of events that culminates in a festival of science that could attract up to 8,000 delegates. As well as that, 50,000 members of the general public will also take part in a series of Olympics-style events celebrating European research in July 2012. The Government's chief scientific adviser, Patrick Cunningham, headed up the Irish team who pitched to a 10-member panel in Stuttgart almost two weeks ago. Dublin beat out competition from Vienna in a unanimous decision by the judges. The announcement has been hailed by industry organisations as a key win for Ireland. "This is a fantastic achievement and one which will provide Ireland with the opportunity to showcase its rich scientific heritage as well as the very significant recent advances which the country has made in developing its science and technology credentials," said Discover Science and Engineering director Peter Brabazon, who said the win will also help to raise the profile of science among Irish students. Matt Moran, IBEC Divisional Director of Sectors, also welcomed the news, saying it will help to boost Ireland's reputation as a location for science-based businesses. "As the country faces into difficult times we will depend even more on our science-based industries; an event as prestigious as this will help to propel Ireland to the top of the science league."
StatCounter founder named Internet Hero
The tech sector's awards season came to a close last week with the Golden Spiders wrapping up the party. While community website Boards.ie took home the inaugural People's Choice Award at the event, 25-year old Aodhan Cullen, founder of web traffic measurement service StatCounter, was named 2008 Internet Hero. Cullen, who set up StatCounter when he was just 16, told ENN that he was thrilled with the honour and hoped that the award would see the firm raise brand awareness, particularly in the Irish market. "Irish firms are becoming more net savvy now, but they're still lagging behind the UK and the US where a significant amount of ad revenue is moving online," Cullen told ENN. StatCounter's web tracking service means that firms can see where their online business is coming from and what keywords or advertisers are paying off. The firm currently has over 2 million members and aims to add at least another 500,000 members in 2009, said Cullen. "We have a target of signing up 2.5 million members by the end of 2009 and we think we'll comfortably beat that target." StatCounter offers a free web tracking service, which the majority of its members have signed up for, and it also offers an upgrade, which offers a more detailed analysis, for a small fee. Cullen told ENN that the firm is constantly looking to improve its core product and is also in the process of developing ideas for new services in the future. One thing is for sure, this young entrepreneur isn't sitting still.
Facebook tries to befriend Twitter
The wires were buzzing this week with the news that Facebook had over the past few weeks been in talks to acquire micro-blogging site Twitter. According to a report in All Things Digital, Facebook initiated the talks in October. The social networking giant reportedly offered USD500 million in stock for Twitter, a company that has yet to make any money. No matter, the deal was turned down by the micro-blogging firm for apparently two main reasons: Twitter execs were reportedly dubious that USD500 million of Facebook stock was actually worth USD500 million, and perhaps more than their doubts about the offer, they felt it might just be too early to sell up, preferring instead to give it a go on their own to see if they can generate some significant revenue. Twitter, which was set up in 2006, allows users to update their status message in 140 characters or less via the internet, instant message or their mobile. According to reports the service currently has over 6 million registered users. Despite its impressive growth, Twitter has yet to make any revenue from its service. In the future it could, like so many other internet-based services, go down the advertising route, or, according to reports, offer a business service for a fee. Certainly, the service's impressive growth and increasing popularity is an indication that it has the potential to earn decent revenue; it just needs to figure out which model will work best. So, for now, a Facebook/Twitter link-up is off the cards; however, industry commentators have speculated that the social networking giant is likely to revisit a partnership in the future. Watch this space.
Mixed fortunes at HP and Dell
Following a rash of poor performances from such tech heavyweights as Intel and SAP, Hewlett-Packard's Wall Street-beating figures came as a welcome relief this week. The results, where HP saw revenue rise by 19 percent, were expected after the firm last week made an early announcement of favourable earnings. Net income dipped slightly for the quarter; however, per share earnings excluding charges were USD1.03, better than the USD1.01 that analysts had anticipated. CEO Mark Hurd's bullish comments that HP expects to come out the other end of the current downturn in a stronger competitive position also went down well with investors and commentators. Despite the short respite from weak results, another PC giant, Dell, brought everyone back to Earth with its 5 percent drop in profits and 3 percent decline in fiscal third quarter revenue. For the quarter ended 31 October, Dell recorded net income of USD727 million, down from USD766 million a year ago. Revenue was USD15.16 billion, down from USD15.65 billion a year ago. October in particular was a bad month for Dell, according to the PC maker, which said it expected the "challenging environment" to persist for the foreseeable future. "We're seeing global implications, and slowing in almost all of the businesses we are in," said Dell chief financial officer Brian Gladden.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 