Dáil Éireann Debate, Thursday - 29 November 2012
6. Deputy Dara Calleary asked the Minister for Communications, Energy and Natural Resources if he is satisfied that service providers for the new 4G network will deliver sufficient coverage for rural Ireland; and if he will make a statement on the matter. [53247/12]
View answer8. Deputy Micheál Martin asked the Minister for Communications, Energy and Natural Resources his views on whether adequate nationwide coverage will be delivered under the new 4G spectrum; and if he will make a statement on the matter. [53259/12]
View answer19. Deputy Brian Stanley asked the Minister for Communications, Energy and Natural Resources if he will provide a percentage figure of 4G coverage the geographic are west of the Shannon will receive following the 4G auction; and if he will make a statement on the matter. [53340/12]
View answer32. Deputy Brian Stanley asked the Minister for Communications, Energy and Natural Resources if he will provide a breakdown by county of the projected 4G coverage in each county in the State by the end of 2015; and if he will make a statement on the matter. [53341/12]
View answerI propose to take Questions Nos. 6, 8, 19 and 32 together.
In accordance with its statutory functions the Commission for Energy Regulation, ComReg, recently concluded an intensive process for the release, through an auction, of spectrum rights of use in the 800, 900 and 1800 Mhz frequency bands. The outcome of the auction for this spectrum was announced by ComReg on Thursday, 15 November. The auction raised some €855 million, of which at least €400 million is expected to accrue to the Exchequer in 2012. Apart from this outstanding financial outcome, the new spectrum will enable the widespread availability of much faster mobile broadband through 4G services. This is extremely important from a broadband policy viewpoint. In the national broadband plan which I published in August the Government committed to the provision of high-speed broadband, including a commitment of the availability of 30 Mbps to all premises in the State within the lifetime of the Government. Mobile broadband via 4G services is expected to play a key role in meeting this commitment, especially in rural areas. It is, therefore, of crucial importance that 4G services should have broad countrywide coverage.
It was a condition stipulated by ComReg that in respect of population coverage on services offered by the winning operators, all licence holders would have to attain and maintain a minimum coverage of 70% of the population and would have to do so within three years. In fact, ComReg considers that actual coverage levels are expected to exceed the obligation in this regard by a considerable margin, particularly in the light of the competitive nature of the market and the limited risk of roll-back of coverage from the existing levels. It should also be noted that coverage continues to be an important differentiator in the mobile telecommunications market such that any material deterioration in coverage by any one network would undermine its attractiveness to its existing and potential customers. Furthermore, the coverage proposals set were designed to ensure cherry-picking of high density urban areas would not occur.
In terms of the experience to date, it should be noted that the four existing mobile operators have achieved coverage levels exceeding those set out in their current respective licences. For example, for 3G services, Vodafone's coverage covers 90% of the population or 5% more than its obligation. Hutchison 3G, better known as 3, covers 96% of the population or 11% more than its obligation. O2 also covers over 90% of the population, which is more than its obligation. Comments by the service providers in the wake of the recent auction have confirmed their commitment to investment to leverage the spectrum allocation to maximum effect. This also indicates that the maximum coverage requirements will be exceeded.
The precise geographic breakdown of 4G services will, of course, be a matter for each service provider. I am, however, confident, based on the 70% requirement figure, previous experience and the statements already made by the winning bidders, that 4G services will be widely available throughout the country.
More often than not, this Chamber hears about issues which have not been dealt with rather than those which have been resolved. The issue relating to the 4G network is again one which relates to the urban-rural divide. The obligation in this regard is that providers must reach 70% of the population with their services. One could argue that the most densely populated areas of the country are in the east and that it would be quite easy to meet the obligation in these areas. I understand the authorities in the United Kingdom, when carrying out their auction, stipulated that operators should seek to reach 98% of the public in towns and villages, not just in large urban areas. I am concerned that we will again end up with an urban-rural divide in this matter or that there will be no coverage at extremely remote locations. There have been massive improvements in technology in recent years, but there are still vast areas of this country in which operators have not been able to provide coverage. Will the Minister comment on the fact that the service obligation figure in this country is only 70%, whereas in the United Kingdom it is 98%?
The United Kingdom made a great investment in this area. Unfortunately, we are not in a position to do likewise. I must admit that as a result of the discussions I have had with ComReg, both recently and when the prospectus for the bidders was being formulated prior to the commencement of the auction process, I am reassured in this matter. As the Deputy might expect, we dealt with it in some detail. I do not believe I am misrepresenting ComReg which made this decision when I say that ideally it would be of the view that in a competitive marketplace there would be no requirement to stipulate a figure. The 70% population obligation figure is a stratagem which was deliberately designed to avoid cherry-picking. It will prevent a new entrant from outside from cherry-picking the most populous parts of urban areas and providing services therein. The requirement to cover 70% of the population means such behaviour will be ruled out.
The Government is delighted not only by the fact that €855 million was raised from the auction - in current circumstances this money is obviously very welcome - but also that four major bidders are competing in the market. There were real concerns about the auction as to whether in a small country such as Ireland that level of competition would emerge. In my initial reply I drew the Deputy's attention to the experience with 3G services and the fact that all of the operators significantly exceeded the obligation placed on them in the provision of such services. In the context of what I have just said and in conjunction with the commitments contained in the national broadband plan, we are determined to ensure the Deputy's fears which I fully understand will not be realised.
When will it be possible to obtain a county by county breakdown of the figures for 4G coverage?
Will provision be made for counties where there are unacceptably large gaps in 4G coverage?
That will depend on the plans put in place by the four successful companies. They have made significant investment. Obviously it is their intention to be remunerated on that investment. I am aware that their planning is already far advanced. I should not promote one company over another but I am aware of one company that already has its plans on exhibition. It will take them some time to build out the system. There may be an additional 2,000 installations necessary. Deputy Colreavy can be assured that any group of companies putting €855 million into delivering these services will be intent on delivering them as quickly and as speedily as possible.
The Exchequer will benefit to the tune of €450 million in 2012 and something over €370 million between now and 2030. Has the Minister any plans to ring-fence this money for use on broadband provision or for use in primary and post-primary schools?
That is a good question and one that has preoccupied me for some time. The national accounts had pencilled in a figure of €178 million which goes directly into the maw of the Exchequer. It is a very valuable national resource, after all. However, when I was progressing the national broadband plan I took care to get commitments that the €350 million investment envisaged will be available, with the Government providing one half and the other half from the private sector. The money goes directly to the Exchequer but we have to engage in this mapping exercise to which I referred earlier. The State is intervening where the private telecommunications providers are unable or unwilling to provide a service. In order to pass muster with the state aids obligations at Brussels, we must undertake a detailed mapping of the country to highlight the areas where the private sector will not do the business. Unfortunately, this exercise takes time. The state aids procedure which we must undergo is painfully slow. I hope I have answered the Deputy's main question.
