Thursday 29 September 2016

Revealed: The three bidders shortlisted for National Broadband Plan

Published 05/07/2016 | 19:52

Rural broadband network to be rolled out from 2017
Rural broadband network to be rolled out from 2017

Three bidders have been shortlisted by the government for the National Broadband Plan contract to provide state-subsidised rural broadband for up to 927,000 Irish homes and businesses.

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Eir, Enet and Siro, which is a joint venture between the ESB and Vodafone, have been told by the Department of Communications that they will proceed to the next stage of bidding for the lucrative 25-year contract.

Two consortia, Imagine and Gigabit Ethernet, have been told they were unsuccessful in their applications to make the shortlist.

The bidders will now compete for a state contract estimated to be worth up to €500m in one or more geographical lots.

Today, the government said that the state-subsidised National Broadband Plan is to be expanded to over 900,000 rural homes and businesses.

Communications Minister Denis Naughten said that it had "emerged" that 170,000 homes previously considered to be adequately covered actually have broadband connections of lower than 30Mbs, the standard set by the government for future connectivity.

They will now join the 757,000 rural homes and businesses earmarked for the taxpayer-funded scheme.

The rural rollout is due to start in the summer of 2017 and is expected to take up to five years to complete.

Broadband is an economic necessity for rural businesses Stock photo: PA
Broadband is an economic necessity for rural businesses Stock photo: PA

The government also said today that it has chosen to privatise the National Broadband Plan network once the initial 25-year state contract is over. The move means that whoever wins the upcoming tender to serve high speed broadband to rural premises will also get to keep the state-funded network.

Mr Naughten said that the privatised model was being pursued as it would lower the cost of the broadband rollout. He also said it would prevent further delays in signing contracts, which have already seen setbacks in the last 12 months.

Mr Naughten said that his Department had commissioned "detailed costings down to every individual home" in the affected poor broadband areas.

If the government continued with a public ownership model, it would “reduce the Exchequer’s Capital Funding Envelope by €500m to €600m over the next 6 years”, he said.

Opting for a private-owned network would save up to 50pc in costs for the government, he added.

“While I recognise the potential long-term value in the State owning any network that is built, I am advised that under a [state ownership] model, the entire cost of the project would be placed on the Government’s balance sheet, with serious implications for the available capital funding over the next five to six years," he said.

"Given that both models will deliver the same services and be governed by an almost identical contract, I cannot justify reducing the amount of money available to Government for other critical priorities such as climate change, housing and health over the next six years."

Mr Naughten also said that he has already "raised" the question of a Universal Service Obligation (USO) for high speed broadband "at EU level". This would mean that every home has a right to high speed broadband by law.

He said that he is "in discussion" with ComReg about a form of USO in areas "where commercial providers have already built high speed broadband networks, but where issues might arise with new-builds".

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