Weekly Digest
Weekly Digest Issue No. 505
04-03-2010
by Deirdre McArdle
Mixed fortunes for O2 Ireland | News 2.0 is here to stay
IDA Ireland sees jobs on the horizon
IDA Ireland this week unveiled a strategy aimed at creating 105,000 new jobs by 2014, and increasing spending on research, development and innovation to EUR1.7 billion per year by 2014. Horizon 2020 will be primarily focused on boosting the amount of foreign direct investment we attract to our shores, and the IDA said it hopes to attract 640 new FDIs in the next four years, 50 percent of which it wants located outside Dublin and Cork.
Our track record for FDI has been good to date: 8 out of the top 10 ICT multinationals have a base here, as well as 8 of the top 10 pharmaceutical giants. This new IDA report is talking about a 'transformation' of the strategy we've used up until now, however. The Tanaiste said changes would have to occur within the existing FDI companies located in Ireland, within IDA Ireland itself, in how Ireland markets itself abroad, and in the way all stakeholders collaborate. Indeed, the report calls for collaboration on an "unprecedented level" between the Government, the IDA, other development agencies, higher education institutes, multinationals already established here and indigenous entrepreneurs - or 'Team Ireland', as the IDA has termed it.
Improving our broadband infrastructure and quickly deploying Next Generation Networks so that we can exploit cloud computing technology has also been identified as key to the success of Horizon 2020. "New business models are emerging enabled by cloud computing and new technologies focused on driving higher productivity and energy efficiency. Coupling this trend with increased convergence between formerly separate sectors and between collaborative networks of multinationals and indigenous companies will prove an increasingly important source of future employment," said Barry O'Leary, CEO, IDA Ireland.
Eircom poised for more job cuts?
Eircom posted a less-than-impressive set of results this week, with the telco reporting a 10 percent year-on-year drop in revenue for the quarter ending 31 December. Revenue came in at EUR465 million. EBITDA for the quarter was EUR159 million, down 5 percent on the year-earlier period. Eircom did manage to get a handle on its operating costs, which dropped by 12 percent to EUR306 million, largely as a result of pay cuts and other cost saving initiatives. It emerged later during the week that cost cutting initiatives may be ramped up, with media reports suggesting that Eircom senior management are working on a plan that could seek a further 1,500 voluntary redundancies at the firm, including a possible 25 percent reduction in the number of managers. The plan is reportedly being driven by CEO Paul Donovan and is likely to be completed by the end of April.
Meanwhile, fixed line revenue decreased by 11 percent to EUR359 million, although the telco did recruit 18,000 new DSL customers during the quarter. Mobile revenue also dropped during the three-month period to EUR120 million, down 8 percent. The firm said this was due to lower ARPU, which was partially offset by customer growth, particularly in mobile broadband. Indeed, mobile customer (including mobile broadband) net adds for the quarter were 40,000, up from 32,000 adds in the year-ago quarter. Between mobile broadband and DSL Eircom says it has now passed the 750,000 customer milestone, and the company is close to launching the first phase of its new range of broadband products, powered by its Next Generation Network.
Mixed fortunes for O2 Ireland
In more news of results, mobile operator O2 Ireland also had a somewhat mixed batch of figures for the quarter to end of December. Though the operator gained 15,400 bill-pay customers in the quarter, making it the leading provider in the bill-pay sector with a base of 691,765, according to O2, its pre-pay subscriber base declined by 18,590 in the same quarter. Overall customer figures also declined from 1.717 million in the third quarter to 1.714 million in the fourth quarter. The bill-pay market is certainly considered the more lucrative segment for mobile operators; however, average revenue per user in both bill-pay and pre-pay segments has dropped over the past year. ARPU for bill-pay subscribers was EUR58.85 in the quarter, down from EUR69.17 for the same period last year. Pre-pay ARPU was EUR26.49, down from EUR26.73 for the same period last year. This drop in user spending is a common trend witnessed by all mobile operators and is not exclusive to O2.
Something else that's not exclusive to O2 any more is the iPhone, with Vodafone Ireland this week announcing its upcoming launch of the device. From 25 March O2's exclusive agreement with Apple to sell the immensely popular handset will end. By and large Vodafone's price plans are broadly similar to O2's; however, O2 does include unlimited internet browsing on the device while Vodafone's offer is 2GB of data. Compare the bill-pay price plans here: Vodafone and O2.
News 2.0 is here to stay
The way in which people consume news has changed considerably over the past year or so, with more and more readers accessing news via the internet and mobile phones. This trend was highlighted by a survey in the US conducted by the Pew Research Center, which revealed that 61 percent of Americans get their news online, making the internet the third most popular news platform after local and national TV stations. Twenty-one percent of those who get news online rely on just one website, while 57 percent consult between two and five, the survey found.
The growing role of social media in the consumption of news was also highlighted in the Pew survey, with 37 percent of internet users saying they have contributed to the creation of news, commented about it or disseminated it via postings on social media sites like Facebook or Twitter. Interestingly, the survey also found that 33 percent of mobile phone owners get news on their mobile devices. "News awareness is becoming an anytime, anywhere, any device activity for those who want to stay informed," said Kristen Purcell, associate director for research at the Pew Research Center's Internet & American Life Project.
In a separate but related survey, 78 percent of Irish people polled by iReach Market Research said they would not switch to e-readers or similar electronic devices for reading newspapers. Of these, 58 percent said they preferred the traditional printed format, 13 percent said they wanted to share their newspaper with family and friends, and 7 percent said their newspaper reading was a break from technology.
PS3 tripped up by Leap Year
The dastardly Leap Year caused havoc with older versions of Sony's PlayStation 3 console this week. Millions of PS3 users were affected by a software bug that caused their games consoles to crash and freeze. A glitch in the internal clock function, which mistakenly recognised 2010 as a leap year, sparked the problem. On Sunday, reports started coming in from users who said their clocks appeared to have gotten confused in switching from 28 February to 1 March. The "slim" versions of the console, which went on sale last year, were not affected. Although Sony would not say how many users were affected by the problem, it's estimated that it could have been as many as 20 million. The glitch included errors such as the date of the systems being reset to 1 January 2000, while in other cases users received an error message saying they had been logged out of the online game network.
On Monday, Sony warned users not to use their consoles, saying they could potentially lose data if they continued using the machines before a fix was made. By Tuesday, Sony had published a blog post saying it had resolved the problems and that the consoles could be used normally again. The electronics firm has been criticised for its handling of the problem. Many gamers, not knowing what was going on until too late, reportedly lost data such as trophies, game saves and rented movies. Sony has said it is investigating the lost data issue but hasn't provided any update yet.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 