Monday 21 October 2019

Eir CEO says 'business case did not stack up' to pursue National Broadband Plan tender

Richard Moat took over as Eir’s chief executive in 2014
Richard Moat took over as Eir’s chief executive in 2014 Newsdesk Newsdesk

The CEO of Eir has said the company could not make a business case "stack up", leading to its withdrawal from the tender process for the National Broadband Plan.

The Government has moved to reassure the public that the state-subsidised rural broadband scheme - which promises to connect 540,000 homes and businesses to high-speed internet services over a period of four years - remains intact despite Eir's withdrawal.

The remaining bidder, Enet, has reaffirmed its support to getting the roll-out done.

Richard Moat CEO of Eir spoke to RTÉ's Morning Ireland about the communications company's decision to quit the process despite earlier promises to compete for and win the contract.

Among the reasons for the company pulling out was because the process had become "increasingly onerous", he said.

"That combined with developments in regulatory pricing particularly around the prices which we can charge for our wholesale services, which we sell to other operators, mean that the overall investment environment is not conducive towards investing further in rural broadband so we couldn't actually make a business case stack up given those two factors," he said.

In relation to the wholesale prices there is a "proposal on the table at the moment which would reduce those prices which would significantly reduce the investments we could obtain from the significant investments we have made in fibre in Ireland".

"It's those kind of factors which meant the business case was getting worse," he said.

Mr Moat said Eir remains "fully supportive" of the plan to provide high-speed broadband across the country and will support the plan with the infrastructure.

"We went into this tender three years ago with the full intention of winning all of it or as much of it as we possibly could," he said.

"Overtime it's become increasingly complex and onerous.

"We wanted to play a full part in it, unfortunately we won't be a direct bidder but we will provide full support to the successful bidder to make sure that the policy objective is still met."

Eir said it will complete the roll-out of broadband to 300,000 homes in Ireland - a €200m investment which is due to be completed by the end of this year.

Last December a consortium led by French billionaire Xavier Niel bought the majority stake in Eir.

However, Mr Moat said the new owners did not have a role in the decision to withdraw from the tendering process.

"The decision was driven by the timetable of the National Broadband Plan," he said, noting that January 31 was the deadline for confirming plans to tender.

Eir's board made the decision to quit the process when it became clear that there was no viable business case for pursuing the contract.

Mr Moat said he regrets that Eir will not be playing a direct part in the delivery of high-speed broadband across Ireland but said the Government's objective is achievable.

He said that the company's position as a former state company meant "there are issues which came out through the contract that means we can't make such a good business case as potentially other non-regulated company could."

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