That was the diagnosis of the Telecommunications Industry Federation meeting in Dublin last week, where telco chief executives met to hammer out how the industry would belatedly upgrade from copper wiring and 20th century phone exchange technology to digitised core networks linked by high bandwidth fibre optics.

Irish telcos account for 3% of GDP and expect to spend 3.2bn on upgrades over the next five years, with government expenditure increasing the figure to 3.6bn.

Speakers at the high-powered conference, including communications minister Eamon Ryan, Comreg chairman Mike Byrne and a host of industry chief executives, agreed it was imperative to upgrade existing systems to the next generation network (NGN) standard, which will support massively increased data capacities and connection speeds, as well as integrating broadband, mobile and digital broadcast technologies.

"This next generation of telecoms infrastructure will have a profound effect on the cultural and social life for the next generation of Irish people, " said Ryan, "Access to next generation broadband will allow people to work nearer to home and work from home, leading to less traffic, less emissions, and better quality of life."

IDA chief executive Sean Dorgan warned an audience of more than 250 telecoms experts and policy-makers that the future of Ireland Inc is more telecoms-reliant that ever before with "our new business activities of R&D, brands, intellectual property, digital media and HQ services demanding universal and ubiquitous connectivity".

Dorgan said "low tax cannot be the only leg of the stool on which we sit", and added that core communications infrastructure was essential for attracting foreign investment, particularly for regional development outside Dublin, Cork and Galway.

But a poll of 200 TIF delegates revealed that a startling 82% did not think there was a clear vision of where the Irish telecoms sector would be in five years' time. And in a separate vote, 73% believed more government involvement was necessary in the sector.

Several speakers at the Mansion House meeting stressed the industry's move to the NGN standard. They said the upgrade of Eircom's national infrastructure. on which many of its competitors rely, has to be done correctly to avoid the drawn-out disputes associated with local loop unbundling in the past.

"This is a once-in-a-generation opportunity to get this right, " said Niall Hogan, general manager of ESB Telecoms, a sentiment echoed by Conal Henry, chief executive of e|net, which runs the publicly-funded fibre networks serving a dozen Irish broadband operators.

"In effect we're behind schedule already in terms of gaining a competitive advantage for Ireland, " said Henry.

"An NGN roll-out could be done in six months, but it's more likely to take 18 months, and it has to be done now in order for Ireland to remain in the upper quartile of European countries by 2012."

Eircom chief executive Rex Comb said he was in talks with the Communication Workers Union (CWU) to discuss retraining many of the 4,000 staff in the company's network division . . . "where the average age is 50" . . . to roll out a next generation network after an initial 60m investment.

"It's easy to talk about spending money but getting a return in investment is crucial. . . There's no [universal service] obligation to provide broadband in Ireland and yes, there's a lot of politics, " he said.

The consensus was that Comreg's enhanced powers under the Communication Miscellaneous Provisions Act, piloted by previous communications minister Noel Dempsey, meant structural changes to the industry would be smoother than they used to be, but there was still dissent concerning getting broadband to rural Ireland.

Smart Broadband chief executive Sean Riordan criticised the government's tender to bring broadband to uneconomic areas under the National Broadband Scheme.

"The scheme is fatally flawed and is a poor man's solution to the widening digital divide. Ireland has to halt erosion of its economic advantage, and one way to do that is to have a high-capacity communications network and world-class distribution system, " said Riordan.

Last week Ryan defended a decision to reallocate 10m earmarked for rural broadband to Sustainable Energy Ireland's greener home scheme. Fine Gael called on Ryan "to take responsibility for mishandling of the energy conservation budget".