Enet plans to expand partnership with SSE
Broadband firm's joint venture is part of a wider expansion plan
Broadband provider Enet's partnership with British energy giant SSE in the west of Ireland is just the next step in its ambition to become "a billion-dollar company", according to its chairman, Irish-American businessman David McCourt.
The Limerick-based company is already eyeing up other major broadband projects in "three or four" other European countries that McCourt believes would be ideal for extending the new partnership with SSE, McCourt told this newspaper.
The west of Ireland joint venture will see Enet and SSE join forces to build a wholesale fibre broadband network to serve 115,000 homes. The new network will compete head-on with Eir in many areas, with that company also planning a major broadband rollout in rural areas ahead of the Government's long-promised National Broadband Plan.
Enet's new €100m network, announced last week, will serve key towns in parts of Donegal, Leitrim and Galway. But McCourt, whose McGranahan McCourt Capital is a key shareholder alongside a State-backed infrastructure fund, said that the new joint venture with SSE is a key step in a major growth plan for Enet.
The "natural evolution" of the partnership would be to look to expand beyond the initial 115,000 homes in Ireland, as well as in the UK and on the continent, said McCourt.
"We want to grow this business bigger. We are bringing in the right partners to do that and we can do this from Ireland," he said. "I suspect this is a partnership that can grow, based in Dublin but expanding into other parts of Europe.
"We have had those conversations [with SSE] and we will start with this first €100m and see where it goes from there," he said.
Enet differs from its competitors in that it's an open-access wholesale provider. The Enet strategy is to install the fibre cable directly to each home and then sell access to it wholesale to other retail broadband operators who in turn deal directly with householders.
"We would like to make this a billion-dollar company based in Ireland, but achieving that will require expansion into Europe. Would SSE be a good partner to do that with? Yes, definitely," said McCourt.
"We are partnering with SSE because it is a FTSE 100 company, they are very strong in big infrastructure project delivery, they have plenty of capital and have invested €2bn in Ireland since 2008. We think they are the right partner for us, that this is the right project and that it has huge benefits to Ireland."
McCourt said the new partnership was a "first step" and had the potential to grow into something broader.
"We both have the desire to deploy capital and to get bigger. We are both committed to Ireland long term," he added.
In July, the State-backed Irish Infrastructure Fund - which is managed by Irish Life Investment Managers and AMP Capital - entered into an agreement to acquire a stake in Enet from private equity group Oak Hill and other minority shareholders. McCourt's Granahan McCourt Capital retained the stake which it had originally bought in Enet in 2013.
"There are a series of things that we are doing to take Enet to the next level. Bringing in the Irish Infrastructure Fund to take out the private equity guys was move one. This joint venture with SSE is move two.
"There are a series of moves that we will make that will put Enet on a whole different scale and scope. We will just keep on putting these pieces one in front of the other and I think we can quickly grow Enet into a big player."
As part of its growth strategy, Enet has just invested "millions of euro" in a proprietary software interface that allows broadband retailers seamless connections into the Enet wholesale network. The company will be able to use the same interface outside of the Irish market, in the UK for instance, he said.
"We will continue to make those announcements over the next three or four months," said McCourt.
"We want to build more network and we want to position ourselves to win the National Broadband Plan," he said."After we prove this to be successful we can absolutely move on to other areas."
Eir previously announced its own plans for a €200m fibre rollout and the two companies are set to compete in many areas. But, despite the planned investments by both companies, more than half-a-million other homes across Ireland are still dependent on the long-promised State-funded National Broadband Plan. Eir and Enet, as well as Siro - a partnership between ESB and Vodafone - are competing to win the contracts that will be awarded under the plan.
It was reported last week that the State subsidy required for the huge plan could be 60pc higher because of the decision to farm out part of it to Eir.
Sunday Indo Business