Sunday 18 February 2018

Major blow to National Broadband Plan as ESB and Vodafone pull out

Only two shortlisted bidders remain, Eir and Enet.
Only two shortlisted bidders remain, Eir and Enet.
Adrian Weckler

Adrian Weckler

The National Broadband Plan has suffered a serious blow with the withdrawal from the bidding process of Siro, the joint venture formed by Vodafone and the ESB.

The move means that only two shortlisted bidders remain, Eir and Enet.

The taxpayer-funded rollout plan aims to provide 542,000 rural homes and businesses with fibre broadband.

These premises are currently cut off from broadband, with internet services that fail to offer access to everyday online facilities.

Siro has yet to formally comment on the withdrawal. However, executives have been complaining about the process since Eir and the government concluded a deal to split the original rollout map of 850,000 homes and businesses, giving Eir a clear path to roll out its commercial network to 300,000 homes and businesses.

What Eir did in offering to cover 300,000 of the 850,000 was to take these rural town centres and extend a couple of kilometres out. That means that anyone who wins the contract for the remaining 450,000 homes and businesses (in one-off scenarios between towns and villages) would face a tough choice. Either they duplicate a fibre network build themselves from the town centre (thus replicating Eir’s build and thinning out any returns) or they apply to use Eir’s infrastructure to carry their service out to where the remote rural premises are.

Typically, rural broadband connections start in small towns or villages, where the density of homes and businesses is highest. The fibre is then laid in a manner where it spiders its way out to the outskirts. That’s where the ribbon developments start to get more spread out and where one-off housing, with farms and other buildings, is the norm.

The news comes after internal government memos revealed that the cost of the National Broadband Plan could be up to 60pc higher than planned.

The price hike could occur because of the government’s recent agreement with Eir.

The rise in cost, which is already estimated to be over €500m, could come from Eir seeking fees from any winning bidder of the National Broadband Plan tender.

“The level of subsidy bidders might seek for the reduced intervention area could increase by between 10pc and 15pc if an incremental cost is applied to infrastructure access, and by more than 60pc if the existing regulated price for pole and duct access is applied."

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