Among the most volatile of the companies that make up the technology sector, the Irish telecommunications industry had an even wilder ride than usual - and not a very pleasant one - during most of 2000.
As with the broader technology industry, most companies started the year as part of one of the most exciting and highly valued sectors in the business world. Old world, bricks and mortar companies seemed dull and decidedly old-fashioned - yesterday's stock portfolio, shelved along with the slide rule, the rotary dial telephone, and the leisure suit.
In contrast, telecoms companies, especially the ones with no profits at all, huge infrastructure build-out costs and lots of Internet potential, set the investor's pulse racing.
That, of course, was before the markets toppled in April. In January, at the time of its sale to British Telecom, Esat actually seemed sexy, especially with PostGEM on one arm and Ireland On-Line on the other. By the end of the year, even sprightly young broadband companies like Formus and Global Crossing were battling a glum market.
Pre-April, NTL and Chorus had seemed exciting and potentially cutting-edge, with cable Internet offerings and digital broadcast television. Come December, they have failed to ignite the imagination or the market. By autumn, the slow, cautious former state telco, Eircom - and in particular, its board of directors - was getting a media, customer, and shareholder bashing as analysts argued about the company's real worth. The only aspect to whet the public's appetite was the possibility of it being chopped up and sold. Ouch.
In 2001, market conditions look to remain uncertain, leaving the telecommunications sector in an odd place. On one hand, they are bruised, have lost heaps of value, and are facing substantial costs for building out the infrastructure that makes them viable. Many still face a big spend to acquire the licences that actually let them offer the services they're hammering together the infrastructure for.
On the other hand, they are laying part of the foundation for the State's economic future. The Republic needs the fibre optic networks, the wireless networks, the exchanges, the data warehouses, the fully functional Internet nervous system that these companies create and maintain.
So, yes, they will survive, because they have the future we want. They may not survive in the form we see them in now, and undoubtedly there will be further convergence and buyouts.
But what about the more concrete issues in the telco sector - the concerns and challenges the industry here will face in the coming year? Most prominent of these is the sale of next generation, 3G telephony licences. 3G will bring faster Internet and data transfer capability to mobiles, so that people don't have to wait, and wait, for e-mail to come across the network or to get a page of information while on the move.
As yet, the market is waiting for full details on the sale to come from the Office of the Director of Telecommunications Regulation (ODTR), so no one knows quite what will be on offer and what costs will be. In addition, the technical requirements of a 3G network are not well-understood.
Predictions in Britain are that 3G may require significantly more masts for the system to work. If true, companies gaining licences here will face more expenditure than they counted on and rural areas may suffer as companies decline to build out areas with few customers and little return. That situation may necessitate State intervention.
On the landline side, things are looking positively rosy as broadband networks get up and running through the coming year. The Republic should have a second transatlantic cable in March, from 360networks. This will join the existing Global Crossing cable and several more sub-sea fibre cables that run beneath the Irish Sea to Britain.
Predictions are that the State will have about a quarter of all the broadband connectivity in Europe by spring - a mind-boggling achievement given the woeful state of networks only a few years ago, when they were truly facing a crisis.
Then, the worry was that no international carrier would ever be willing to place the Republic directly on a transatlantic cable and on to the Internet backbone. Now, the worries have switched from the big picture to the low-end basics.
Foremost among these are delays and uncertainties about linking it all up. The big cables are there, or on their way, but they must connect to the telephony "hotels" - the big centralised exchanges where the bandwidth is pumped in - and then link again to city networks and those encircling the state. At the moment, such essential build-out is happening slowly or only in the planning stages.
An even larger uncertainty is how this connectivity will be priced, used, and offered to businesses and consumers. And of course, primary issues such as simply getting a telephone installed within six weeks, or receiving a decent level of service on an office network, still plague telephone operators - all of them.
Consumers, in particular, are still adrift in the connectivity doldrums.
Options are few between the operators for getting on the Net, and costs remain high (albeit lower than in many other European countries). Consumers can look forward to getting an ADSL offering early in the new year, by all accounts. (Asymmetric digital subscriber line is a technology that increases by a factor of 10 the speed of ordinary telephone wires for Net access).
Cable, despite the hype, is available to only a few communities where upgrades have been made to existing networks, and in general remains an uncertain bet - especially as service levels and speed decline as more people get on the network.
Back to the large-scale picture, data warehouses - big, high-security centres with large computer servers and high bandwidth connections to the Net - are going to come into their own in 2001.
To date, we haven't heard much about them except that they've been flooding into the State, are concerned about getting a reliable electricity supply (they can suck in the energy an entire small town would consume), and are looking for ebusiness.
They are here because the big bandwidth is here, and they are preparing virtual homes for the e-business companies they know will come in search of that bandwidth. They're good partners for the State, since they will be aggressively going after the multinational and indigenous ebusiness the Government wants to see happen here.
Finally, regulatory issues, as ever, will hang over an industry that changes so quickly into new forms that regulators are hard pressed to keep up with it. Add to that the genetic disposition to bicker if you are a telco, and the ODTR seems certain to remain at the centre of this squabbling, counter-suing pack throughout 2001.
Since the ODTR's office will also be reformed and given new powers in 2001, businesses and consumers can perhaps look forward to conflicts being resolved with greater speed and fewer histrionics. Maybe.
klillington@irish-times.ie
