Eircom loses out as 3 Ireland wins €40m contract for high-speed broadband service
Remote rural areas will benefit from the NBS
The Government is to award 3 Ireland the contract to deploy the long-awaited €40m National Broadband Scheme (NBS) -- shunning the only other remaining bidder, former state-owned telco Eircom.
The NBS aims to bring high-speed internet services to about 10pc of the population that can't currently avail of them.
Most of those affected are located in remote rural areas that telecoms firms deem uneconomical for the provision of broadband infrastructure.
The bidding process for the NBS has been a protracted one, and it was hit by significant delays.
During the summer, one satellite broadband provider, NBL, lost a High Court challenge taken on foot of a decision by the Department of Communications not to accept submissions for the NBS from satellite broadband providers.
In July, the only other serious contender for the scheme, BT Ireland, pulled out of the bidding process.
It had intended to use WiMax technology, but would have required an excessive number of base stations to develop the scheme using the spectrum that was being made available.
However, BT Ireland provides network technical services to 3 Ireland, and will be indirectly involved in the NBS from that perspective.
The Department of Communications and 3 Ireland will iron out final contract details over the next couple of weeks before it is formally awarded the deal.
Implementation of the project is expected to begin almost immediately, but it will probably be mid-2010 before the scheme is fully operational and that timetable could stretch to 2011.
3 Ireland has been aggressively rolling out mobile broadband products over the past year, as have competitors Vodafone and O2. Mobile broadband has helped boost Ireland's overall internet penetration rate, while its take-up rate has been the fastest in Europe.
Eircom yesterday said that it is "extremely disappointed" with the department's decision, and claimed that its bid had been supported by the "most significant" regional interests groups that will benefit from the NBS.
Finance Minister Brian Lenihan last month confirmed that €45m is being made available in 2009 for capital expenditure in communications infrastructure, with approximately €39m of that earmarked for the NBS.
- John Mulligan
