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Isle of Man: Business Environment


The Isle of Man’s principal telecommunications service provider is Manx Telecom Ltd, previously a wholly owned subsidiary of British Telecom plc but now part of Spain's Telefonica group via BT's mobile business offshoot O2. Because of its association with British Telecom, Manx Telecom has been able to provide a leading edge telecommunications system, including sophisticated telephony services. The Isle of Man is also within the UK Numbering Scheme, which means that a business call from London to Scotland is the same as a call from London to the Isle of Man, both in terms of how it is dialled and the cost. Broadband (ADSL) connectivity and full coverage GSM mobile phone services are among the many "business as usual" facilities available on the Isle of Man.

As the Isle of Man`s licensed telecommunications provider, Manx Telecom has invested heavily in infrastructure over recent years and the result is a network with enough capacity to run all the trans-Atlantic Internet traffic between Britain and the USA ten times over. The Island is well served by high bandwidth international connections via both the UK and Ireland. Completion of the new fibre optic cable link to Northern Ireland in December 2000 was the final step in creating a "self-healing ring" topology which will ensure that traffic continues to flow even in the event of a break at any point in the network. It is this sort of investment in future growth and in new products and services which is necessary to keep pace with technological advances.

The size of the market in the Isle of Man (population about 80,000) might have meant that it fell behind in some of these advances. But Manx Telecom, backed by BT`s resources has continued to make the Isle of Man a world leader in this field. During 2001, Manx Telecom, backed by BT and in partnership with NEC and Siemens, launched the world`s first commercial Third Generation mobile phone service. This offers fast access to the Internet through mobile handsets and to services such as video telephony, video download, interactive gaming and location-based services becoming available to people, on the move. It also takes e-commerce a stage further, into 'm-commerce', or mobile commerce. Some industry pundits believe that the availability of all the benefits the Internet can bring, through a mobile handset, will mean mobile Internet access will eventually outstrip access through desktop PCs.

The Isle of Man was also one of the first ten countries in the world to receive ADSL technology and the availability provided by Manx Telecom continues to exceed that offered by BT in the UK. ADSL, which delivers broadband Internet services to households and businesses over copper telephone wires, is an effective gateway for businesses wishing to improve the speed and efficiency of their data download.

Manxnet Direct was developed to provide Internet connectivity for organisations which generate large amounts of traffic to be sent over the Internet by offering dedicated access to BT`s Internet backbone. The circuit capacity is provided at a level appropriate to the organisation`s needs, normally from 64Kbit/s to 4Mbit/s. The service also enables businesses to adapt to higher bandwidths as their needs change.

Manx Telecom's hosting products Web Hotel and Web Park, offer companies everything they need to unlock their e-business potential. The mirrored servers of the Web Hotel are based in Manx Telecom`s advanced web hosting facility in the Isle of Man and are served by a highly resilient network infrastructure. Manx Telecom's diversely routed Internet backbone connection, together with full UPS (Uninterrupted Power Supply) and diesel powered back-up generators, will ensure that sites are up and running all of the time. Web Park is available as a dedicated or colocated service and is supported twenty-four hours a day, seven days a week. A full range of value-added services is available, including pro-active monitoring and statistics reporting.

The Isle of Man government has demonstrated its support for high-speed Internet links by offering a subsidy for connections to ISDN and ADSL for both business and residential customers. This is one element of its strategy to position the Isle of Man as a leading centre for offshore e-commerce. Manx Telecom is a key player in the development of this strategy.

In January, 2004, the Isle of Man Treasury and the Department of Trade and Industry unveiled a joint broadband development strategy which the government said would give the jurisdiction a competitive edge over its rivals and attract new business to the island. “Most jurisdictions are working towards improving their percentage of broadband take up which is often seen as an indication of a jurisdiction's commitment to e-business and e-enablement in general,” the government said in a statement. “Typically, the more progressive jurisdictions are nearing 50% coverage. With the announcement of the Isle of Man’s broadband strategy, the Island will uniquely be able to offer 100% broadband coverage,” it added.

According to the government, this has been achieved by:

  • Manx Telecom supporting the E-Island Vision by ADSL-enabling all of their digital exchanges;
  • Domicilium offering near line of sight wireless broadband through their new wireless 3.4Ghz internet services;
  • The Department of Trade and Industry offering a grant towards the cost of a broadband satellite connection in circumstances where ADSL and wireless broadband are unavailable.

“The Department of Trade and Industry has for a number of years provided a grant to cover the cost of any individual or business wanting to install an ISDN or ADSL connection and the extension of this assistance to cover a satellite connection in specific circumstances is a further development of this policy,” the statement continued, adding that the number of broadband connections exceeded 1,750, comparing favourably with other jurisdictions in e-business development.

The government’s E-Business Director Tim Craine commented: “This strategy means that the Isle of Man will have yet another significant selling proposition when attracting new business to the Island. I feel sure that this announcement will bring about further new business opportunities.”

The scheme is further described as follows:

  • To provide a grant to domestic or business customers for the installation of an ISDN or ADSL circuit to their property, assuming they already have a Manx Telecom telephone line or wish to use a “Wireless” option (not satellite), for either a fully managed service or ‘wires-only’ connection. The subsidy will apply to all new ISDN and ADSL connections for one connection per applicant. The subsidy will not apply if an applicant has already been in receipt of a previous subsidy for ADSL connection. The subsidy does not provide for any other form of Broadband connection or fibre provision.
  • The scheme is open to individuals and businesses who fall outside of the current and proposed terrestrial DSL areas that will be operated by Manx Telecom upon completion of their exchange upgrades. Eligible costs will be met by the subsidy offered, to a maximum of 50% of the total cost which will be no more than GBP300 for a domestic installation, or GBP1,500 if a small or medium business. Eligible costs include site survey, installation and equipment. Assistance will be limited to one connection per business or household.

In March, 2005, Manx Telecom, Jersey Telecom and Wave Telecom announced that they have joined forces to provide seamless telecommunications solutions for their customers with a presence in Jersey, Guernsey and the Isle of Man.

This coordination will ensure customers that all three companies are provided with a consistent approach to their telecommunication requirements and will only need to liaise with a single point of contact for projects spanning all three Islands.

Manx Telecom Managing Director Chris Hall explained: "As small island telecommunications providers we have common interests and face similar issues with our markets and this has led to a close working relationship. This announcement takes that relationship one stage further, to the benefit of our customers who have a business presence in more than one of the three jurisdictions. Our association will effectively allow us to offer them 'joined-up telecommunications' across all three markets."

Bob Lawrence, Managing Director Jersey Telecom Group, also welcomed the benefits of the agreement and in making the announcement he commented: "It will allow Jersey Telecom to operate more effectively across all three markets which in turn will bring many advantages to our customers. We will continue to build on our relationship to provide further solutions and product development initiatives for our customers."

Mark Lewin, Head of Technology at Royal Bank of Scotland International, which has business interests in all three islands said: "I am really pleased to see this agreement come to fruition. We have been encouraging Jersey Telecom and Manx Telecom to work together much more closely for a number of years now, something that is of real benefit to both the companies themselves and, through the provision of a consistent and standardised model, customers such as ourselves who have operations across the islands. Through the co-operation on product development, pricing and billing arrangements and core infrastructure developments they are able to ensure that the significant investment they make into the islands is focused on value add activities which will undoubtedly be to the benefit of all their customer base."

In November, 2005, UK-based mobile telephone operator O2 announced that the launch of Europe's first commercial, high speed third generation (3G) mobile data network at the company's subsidiary Manx Telecom on the Isle of Man.

The 3G network on the Isle of Man incorporates HSDPA (high-speed downlink packet access) technology and 'positions O2 and Manx Telecom at the forefront of providing advanced mobile data services to customers within Europe'.

"Customers will be able to experience for the first time next-generation services on the move at speeds equivalent to those enjoyed by fixed broadband networks" said the firm. "They will be able to quickly and easily access corporate networks, send and receive emails with large attachments as well as download DVD-quality film clips, audio and video, interactive multiplayer games, multimedia music tracks at three-times the speed of today's commercial 3G UMTS networks."

Applications and services on the Isle of Man were initially targeted at Manx Telecom's corporate customers. These were followed by the ongoing development of content for the consumer market, facilitated by the higher speeds which HSDPA has already demonstrated in pre-launch trials.

Chris Hall, Manx Telecom managing director, noted that:

"Working with Lucent Technologies, we will have a very early deployment of HSDPA, allowing us to gain the knowledge and expertise in high-speed mobile data services which can be rolled out across the O2 Group, including the UK, Germany and Ireland. It will also offer a great opportunity for our customers on the Isle of Man to be among the first to experience this ground-breaking technology."

Andy Williams, president, Lucent Technologies Europe, added:

"We are very excited and honoured to help Manx Telecom launch the first commercial HSDPA service in Europe. We believe our end-to-end UMTS/HSDPA solutions are best-in-class and will help Manx Telecom deliver mobile services never seen before in Europe."

In July, 2006, Manx Telecom said that broadband penetration on the Isle of Man was 60% higher than that of the OECD average, confirming the jurisdiction as one of the world's leading e-economies.

Announcing that more than 10,000 broadband connections have been achieved on the island, Manx Telecom stated that ADSL broadband penetration on the Island was 12.7 connections per 100 of population. By comparison, a recent OECD report on broadband take-up around the world showed that the Island was ahead of both the UK and Ireland in the number of DSL connections - they trail at 11.5 and 5.0 respectively.

Since launching the service, Manx Telecom says that it has made a multi-million pound investment in Asymmetric Digital Subscriber Line (ADSL) core equipment, providing unrivalled levels of coverage - 99.8% - compared to other European countries. Furthermore, price reductions and increased availability have seen its popularity soar, with the number of connections growing by over 50%.

ADSL technology provides broadband Internet access over a standard telephone line, effectively "splitting" the line so that it can be used simultaneously for both voice calls and high-speed Internet browsing.

In 2006, Manx Telecom’s investment of GBP10.5m enabled the design and construction of a high specification purpose-built Data Centre facility and the installation of a world-class off-Island MPLS Network.

The off-Island MPLS network is fully resilient and diversely supplied over a 10 Gbs-1 (gigabit per second) backbone, connecting the Isle of Man directly to the core of London’s global telecommunications points of presence and onwards around the world. The network delivers fully managed and monitored global connectivity solutions.

The company committed to further substantial investment over the following three years which will see the replacement of the entire fixed and core mobile network on the Island with a new, Next Generation Network, offering increased resilience and the possibility of converged services in the future. This was due for completion by the end of 2008.

In January 2009, Manx Telecom announced the completion of a major upgrade to the Island’s telecommunications network which means that the company’s 21,000 broadband users will be able to take advantage of download speeds of up to 8Mb/s (8 Megabits per second). The upgrade is part of Manx Telecom’s GBP25m Next Generation Network project which will ultimately enable personal and business customers to access and manipulate voice calls, data, television, and video, on one seamless ‘converged’ network.

Implementing the Next Generation Network was due to take place during 2009, and meant migrating more than 60,000 fixed lines to the new digital platform. The Next Generation Network represents one of the biggest investments in technology the Island has ever seen and, when complete, the Island will be the first country in the world to have everything running off one secure converged Telecoms network.

In December 2009, the Isle of Man government’s Communications Commission launched a consultation as part of a revision of regulation on communications.

The Telecommunications Act dates back to 1984 and the Broadcasting Act has remained largely unchanged since 1993; both were drafted in a largely pre-mobile, pre-digital and pre-Internet age. The Commission is therefore looking to update the Island's communications law in order, in its view, to ensure the Island’s infrastructure remains cutting-edge so as to remain competitive and to develop new wealth-creating industries, as well as to ensure the Island has the best regulatory framework to enable continual development of its communications networks and services for residents, visitors and businesses.

The Commission is therefore recommending an approach modeled around two central principles:

  • Regulation focused on developing a communications infrastructure that will maximize the Island’s social and economic potential; and
  • A regulatory approach that emphasizes cooperation as the first approach to tackling disputes or areas of concern.

The government considers that this approach will provide “a more certain environment for operators to continue to invest and upgrade communications infrastructure and help stimulate new and innovative services for consumers and businesses alike.”

Adrian Earnshaw, Chairman of the Communications Commission, commented on the government decision:

“Given the current financial challenges we are facing, both globally and those unique to the Island, economic diversification is key and I believe fast and effective modern communications networks and services will underpin the Island’s success in years to come. Effective and forward-looking regulation is therefore vital if the Isle of Man wishes to attract investment and innovation in these areas.”

Carmel McLaughlin, Director of the Communications Commission, added:

“Until a few years ago, there were only two incumbent licensees on the Island – Manx Telecom and Manx Radio. Today, we have two mobile operators (and a third is licensed but not yet operational), five Internet Service Providers and three radio stations – all competing for the attention of a population of just 82,000 people.”

“This competition has undoubtedly brought with it benefits for residents and businesses but the legislation available to the Commission has not evolved to keep pace. This is an opportunity for the Island to create a forward-looking regulatory approach which facilitates cooperation and investment and, ultimately, greater value for the Isle of Man.”

Responses to the consultation, which closed on February 11, 2010, will, in part, form the basis for the revision to the Island’s communications regulation, to be debated throughout 2010.

Twenty-two responses were received, the majority of which agreed with the Commission’s recommendation that a new approach to communications regulation tailored to the Island’s unique position was needed.

"Quality communications infrastructure and services benefit our society and have underpinned much of our economic success to date. Effective and forward-looking regulation is vital if we wish to continue to diversify and grow our economy. The Commission has obtained Council of Ministers’ approval to engage legal draftsmen and will now begin the process of updating the Island’s communications legislation," Earnshaw said in August 2010.

The Commission published in August 2010 a second report from Perspective as part of its strategic review of communications. The report, entitled “The Isle of Man Approach to Telecommunications Regulation and Spectrum Awards," will form the basis of the new communications regulation.

By September 2013, work to update the island's telecommunication and broadcasting legislation was continuing.



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