© eircom The Digital Divide: transforming lives for the better or worse! FITCE Congress 2008 Michael Browne (23 rd September 2008)

© eircom 2 Contents Why broadband matters - National, Enterprise & Individual Broadband Availability, Adoption and Affordability Next Generation Broadband Applications Next Generation Access Network Roadblocks Next Generation Access Network Evolution Encouraging Wider Deployment of Next Generation Access Networks

© eircom 3 Why Broadband Matters! National Positive impact on GNP Early broadband access accelerates economic growth, Where to locate a business Enterprise Higher labour productivity. Increases profits. Wider market. Increases the number of business Individual Easier to join the workforce. Removes the geographic constraints from social interaction. Supports any scale of social group Improves educational performance Enables more non-verbal communication

© eircom 4 Broadband Availability, Adoption and Affordability Available 92% é DSL coverage in the EU-15 was 91.9% in Dec 2006 é The average availability for rural areas was 76%. é Cable modem broadband availability was 37% in Dec 2006 Adoption 20% é Average take up rate is 20%, (Range from 35.6% to 7.6%). é Dominated by males, young, more educated and higher income Affordable <1% of monthly GDP per capita é The lowest-priced broadband is less than 1% of monthly GDP per capita.

© eircom 5 Next Generation Broadband Applications E-health Applications Lifelong Learning General é High Definition TV (HDTV) é Next Generation Video (3D) é Remote Computing é Home Surveillance é 3D Gaming Source: Analysys for Broadband Stakeholders Group Maximum Downstream Requirements

© eircom 6 Next Generation Broadband Applications : E-Health Ageing Population – Rising Health Costs yrs 15-44yrs 45-64yrs 75-84yrs 5-14yrs 0 - 4yrs Relative Healthcare Costs per Capita (Mayhew, 2000)

© eircom 7 Next Generation Broadband Applications : Lifelong Learning 21st century technologist — expert in a range of subjects, versatile, experienced, and articulate. Broadband and distance education help to improve life-long learning Use of basic applications (word processing) are learned in school. General use of computers (surf the internet) is learned outside the school setting. Broadband access results in significant improvements in pupils’ performance 25% use internet for education (broadband) 14% use internet for education (non-broadband) Minimise the Social Divide by smoothing out the Digital Divide.

© eircom 8 Next Generation Access Networks Roadblocks: Capital Cost and Take Rate Capital Cost Fibre Network Layout and Capital Expenditure Source: OECD (2007) FTTH Take-Up Rates Source: Yankee Group Research (2008) Take Rate

© eircom 9 Next Generation Access Network Roadblocks: Relative Costs of Broadband Platform Urban Rural Population Density per km 2 Relative Cost/Complexity (%) Satellite Existing Wireless Potential Wireless DSL Cable Modems Optic Fibre Suburban 0.1 Adapted from Gérald Chouinard - ITU News magazineITU News magazine

© eircom Mb/s 50Mb/s 15Mb/s 5Mb/s 1Mb/s 0.5Mb/s Population Density FTTH FTTCab HFCCo-ax Twisted Pair Wireless Satellite Broadband Platform Next Generation Access Network Evolution

© eircom 11 Next Generation Access Network Evolution Urban area: population density > 500/km² Suburban area: population density between 100/km² and 500/km², Rural area: population density < 100/km² TI's network evolution is estimated to result in 16% Fibre to the Home 49% Fibre to the Cabinet 35% Fibre to the Exchange

© eircom 12 Next Generation Access Network Evolution: Digital Slices Laissez-faire approach to fixed network é Unable to get broadband é 1-5 Mb/s, é 5-10Mb/s, é up to 25Mbs é up to 50Mb/s and é up to 100Mb/s

© eircom 13 Recommendations: Encouraging Wider Deployment of Next Generation Access Networks (NGAN) Individual Focus on specific hard-to-reach groups (poor, limited education,etc.) Financial incentives/ Tax breaks to purchase a PC and broadband. Offer public broadband access points Businesses Focus on SMEs and start-ups. (financial incentives, tax credits) Creating business areas with very fast broadband access Adapting laws to make teleworking more feasible. Expected Results Overcome the "pump head" resistance to NGANs. Generate significant construction activity. Reduce the risk associated with the high capital expenditure. è SMEs: tax relief €5,000, 100Mb/s connection è Rural farm families: tax relief of €2,000, for a PC and 20Mb/s connection è Elderly: €2,000 grant for an e-health solution,