By Andrew Bushe and Harry Keaney
DUBLIN — Changes are definitely ringing throughout Ireland’s telecommunications sector.
With New York-based NTL having bought Cablelink, Ireland’s biggest TV cable company, for £535 million after a court challenge to the sale failed last week, a revolution in Irish home entertainment and communications is on the way.
NTL, which is one of three cable suppliers in Britain and is also involved in TV transmission systems in Australia, is planning to roll out an extensive package of armchair telecommunications services to Irish subscribers.
It will offer video-on-demand, a huge range of TV channels, interactive banking, an alternative telephone service, faster internet services and home TV shopping to 360,000 homes.
"We are really excited. We think it has got great prospects," Owen Lamont, managing director of NTL Ireland, said.
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It was expected that the sale of Cablelink by Ireland’s national radio and television station RTE and semi-state telecommunications company Telecom Éireann would raise about £200 million when it was first mooted two years ago. Five international companies and consortia made bids for Cablelink.
Esat Telecom, Ireland’s second largest telecommunications company, tried, unsuccessfully, to stop the sale. Esat, which claimed bid-rigging and errors in the sale process, had teamed up with U.S. cable firm Charter Communications to launch its bid.
Cablelink was 75 percent owned by Telecom Éireann and 25 percent by RTE. Now Telecom Éireann faces what will probably be its toughest competition ever.
Despite its failure to stop the sale, Esat indicated that it would remain a competitor in the Irish market. In a statement after the Irish High Court and Supreme Court decided to reject its request to continue a temporary injunction against the Cablelink sale, Esat said it was "disappointed" by the outcome. But the company’s chairman, Denis O’Brien, who earlier had said Esat’s failure to buy Cablelink represented a significant blow for its plans, insisted the company’s fiber optic network guaranteed it a bright future.
In addition to Esat, the bidders for Cablelink included Cable Management Ireland, TCI Ireland Tele-Communications Ireland Ltd. and Dutch-based UPC Services International.
"Fantastic opportunit"
Lamont said NTL had paid a huge amount of money but "we are absolutely sure the price isn’t too high. It is a fantastic business opportunity."
Under the name Cabletel, NTL already owns a cable system serving 63,000 subscribers in Northern Ireland and is committed to investing £600 million in the system there.
NTL will now be providing a service to about a third of homes on the island of Ireland.
Lamont said NTL had created about 10,000 jobs in the UK in the last five years and the Irish deal would also created hundreds of jobs. A £200 million development program is planned.
"We are builders of great networks and Ireland is going to be able to compete in the new millennium with an information superhighway-based broadband network and that is really exciting," he said.
The cost of the cable service for television channels is regulated by the government and has been capped for the next five years.
Lamont said there was no question of them "putting prices through the roof" and people would save money on their telephone calls.
NTL has also completed a £30 million fiber optic link between Britain and Ireland.
NTL has promised to rapidly roll out a new £200 million network to cablelink customers in Ireland, with Lamont saying, "I can’t wait."
In an interview with the Irish Times, he said no technology has taken off like the internet, with demand for capacity doubling every 100 days. But that expansion has created online delays and bottlenecks, especially for domestic users.
"So when we have reengineered the network, customers, both residential and business, will be able to compete on a world stage," he said. "The second thing is that not only residential customers, but business customers, will have an alternative to Telecom Éireann. And I think residential customers will find that particularly attractive."
The Cablelink sales price will lead to a reassessment of Ireland’s smaller cable companies like Princes Holdings, Noir Suir Relays and Cable Management Ireland.