|You are in: UK: Northern Ireland|
Thursday, 11 October, 2001, 14:09 GMT 15:09 UK
NI firms weather dot.com downturn
Despite the much-publicised bursting of the dot.com bubble and the global economic slowdown, the prospects for e-business in Northern Ireland look surprisingly healthy.
BBC News Online's Jane Bardon asked a variety of Northern Ireland internet companies how they have weathered the storm and what their hopes are for future growth.
As part of e-business week the Department of Trade and Industry has been highlighting statistics that suggest Northern Ireland is slightly ahead of the rest of the UK in e-commerce.
It says 69% of the province's businesses now have a website and 90% have internet access and e-commerce business has grown by 6% to 30%.
A fifth of businesses now provide online information on delivery times and costs, while 44% provide it on their products and services.
The Belfast-based online video and DVD seller BlackStar.co.uk is probably the province's biggest e-retail success story.
In common with many online retailers, while its turnover is growing, it has struggled to get to a position of profitability.
Its managing director, Ian Loughran, said the company had been "through some tough times". But "with the significant internal changes" over the last six to nine months he said they are poised to become profitable in the next quarter.
The company has shelved plans to float because of the depressed state of the financial markets and last October it laid off 22 people and now employs 65.
But BlackStar's worldwide customer base in 160 countries is growing steadily.
"There is little available investment finance but there is no lack of customers. We have redesigned our site, we have a wide advertising strategy and we are promoting ourselves in partnership with other companies," Mr Loughran said.
The Global Email Company, better known as gem.com has just marked its first anniversary as a highly successful email handling company in Belfast.
It provides an email response service to companies like the online retailer Amazon.com.
The firm employs 200 people and is currently recruiting a further 150 staff.
Gem vice president of communications Valerie Fulton said: "Attracting the business of Amazon.com was a big coup for us, and we have been ramping up the business very quickly. We aim to serve a small number of large clients.
"There are very few companies in the UK that offer this sort of service. Our few competitors worldwide are in the US and Asia.
"But we are very well placed for growth because of our high quality infrastructure in Northern Ireland and the availability of highly-skilled staff and staff with language skills. The kind of clients we deal with place a high value on customer care."
The Internet Business (tibus.net) started up in Holywood, County Down, in 1996 and is now one of the province's most successful web design companies.
Paul Gregg, its technical director, said there was still steady demand for design work.
But he added: "We are less busy this year than we were last year. We are feeling the effects of the global conditions.
"The business hasn't gone away, but whereas last year a lot of companies received private investment and there were a lot of dot.com start-ups, this year, because of the state of the market, there isn't the money to invest in new sites.
"A lot of the work we are doing is for companies which are reinvesting in their websites."
The UK-wide telecommunications company NTL has made a huge investment building Northern Ireland's first cable network.
It was also the first major internet service provider in the province to offer unlimited free internet access to residential customers in May 2000.
But as the global slowdown hit telecoms last year, the company's share price plummeted on the stock market.
Asked whether the company was seeing a return on its investment, Gareth McWilliams, sales and marketing director for the company's residential section admitted the company was prepared for the long haul.
But he said there had been continual strong growth in the uptake of both NTL's basic net access services and its high-speed cable modem broadband services.
"Out of the 381,000 residential customers to whom we provide telephone and television services, 100,000 of those are internet dial-up customers.
"The take-up of the dial-up services has grown from 2% to 26% since 1998 and the take-up of our broadband services is growing at about 600 sign-ups a month."
On 1 October, NTL launched its interactive TV service in Northern Ireland - providing users with digital channels, internet access, email and interactivity through their television.
"This is enabling us to target the 60% of households which don't have a PC," Gareth McWilliams said.
He added: "Customers are now spending more with us than they were a year ago.
"We are seeing a very impressive uptake of our services like broadband which are profitable and will help us to recoup our investment."
NTL business sales director in Northern Ireland Trevor Edgar, said the sale of internet access services to businesses was becoming one of the most profitable parts of the company.
"We now have a large corporate presence with companies in Northern Ireland's top 100, public sector users including health, education and central government and among the large call-centre-type enterprises.
Mr Edgar said growth was strong from the top end of the market down.
"At one end, there are the small businesses who had not realised how useful the internet could be for them, and have now decided to dip their toes.
"And at the other end, large businesses, which are already using our business essential package, are getting to the stage where they are realising that with increased bandwidth and broadband access they can send information more quickly and efficiently.
"One by-product of 11 September is that broadband is coming into its own as business people, now reluctant to fly, are using video conferencing more and more."
Internet advertising sales manager for the Belfast Telegraph newspaper's web edition, Barbara Campbell, admitted that the dot.com slump has hit the take-up of advertising on the site from the big UK brands.
But she said the paper's online department, which has ten full-time staff, is confident that they will be able to grow.
"The site has been running since 1995, but it was only this year that we launched our first commercial strategy, targeting key areas which we want to develop.
"When the dot.com bubble burst last November, the bottom fell out of the market. Recovery has been very slow, but we are combating that by launching new products with greater local appeal, like our entertainments magazine.
She said she had been surprised by the response of local companies approached for advertising.
"We are still very behind the US and the rest of the UK but people in Northern Ireland are very keen to hear about how they can have an online presence. Many of the companies we approach, which do not yet have a website, are in the process of building one."
Gavin Moore, a recent business graduate, bought over the Revelations internet café in Belfast's Shaftsbury Square in July.
Revelations was the first cyber café to open in the city in 1995. It is now one of a number in Belfast and many other towns across the province.
Mr Moore has high hopes. He is increasing the number of terminals and replacing his computers with the latest models.
"I am very hopeful about the future of the business. We have a lot of regulars and business people who come in as well as students, lots of backpackers and tourists wanting to check their email.
"I am hoping to open a number of cafes, in the long term.
"And I expect to develop the business, particularly on the group gaming front and by offering video conferencing."
Northern Ireland's e-companies are determinedly positive. They have to be in a sector where it takes all their entrepreneurial ingenuity to survive.
They have had to evolve to weather the market conditions.
BlackStar had to revise its forecast for achieving profitability from early 2001 to the next quarter.
NTL has all but halted its ambitious network construction programme and has refocused its emphasis in marketing its services to the neighbourhoods it has already cabled.
There have been failures, but a core of businesses which have been realistic in their expectations of the profits the internet can generate seem destined for success.
Acquiring a web presence is still the last priority for many firms, but Northern Ireland's small business agency, Ledu, has recently helped 1,000 to build websites.
A spokesman for the agency said: "Small businesses here generally take a long-term view. They tend to have niche markets and aren't affected by global market changes in the way the large multinational companies are."
02 Oct 00 | Northern Ireland
NI e-mail company announces jobs
24 Jul 01 | Northern Ireland
E-mail firm in global alliance
05 Jul 00 | Northern Ireland
Online business delays market float
31 Oct 00 | Northern Ireland
NI online video retailer cuts staff
08 Mar 01 | Business
NTL sticks with 2001 targets
02 Nov 00 | Business
NTL to axe 1,300 jobs
The BBC is not responsible for the content of external internet sites
Top Northern Ireland stories now:
Links to more Northern Ireland stories are at the foot of the page.
Links to more Northern Ireland stories
|^^ Back to top
News Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | In Depth | AudioVideo
To BBC Sport>> | To BBC Weather>>
© MMIII | News Sources | Privacy