Thursday 19 April 2018

Government casts doubt on Eir's fibre broadband promises

Communications Minister said he wants companies to enter into a ‘binding commitment’ regarding their broadband plans. Photo: Tom Burke
Communications Minister said he wants companies to enter into a ‘binding commitment’ regarding their broadband plans. Photo: Tom Burke
Adrian Weckler

Adrian Weckler

Eir will not pursue legal action in Europe against the State-subsidised National Broadband Plan after the Government admitted that the 757,000 rural homes and businesses to be covered by the plan can be reduced after an upcoming €275m tender for it is published.

The move comes as the Government released an updated map showing the locations of rural homes and businesses that will be included in the taxpayer-funded broadband rollout over the next five years.

The broadband plan will guarantee minimum speeds of 30Mbs at current market rates to every home and business in the country, regardless of location. The scheme will cost the State an initial €275m, €75m of which is being supplied by the European Regional Development Fund.

Under EU state intervention rules, the Government cannot roll out broadband in a rural area if a private operator plans to do so itself.

Eir recently announced that it would cover 300,000 of the 750,000 homes and businesses to be included in the National Broadband Plan districts. However, Communication Minister Alex White said that the Government was not yet convinced that it would do so.

"Several operators submitted plans in this process, which were assessed by the department and our technical and financial advisers," said Mr White. "To date, no company has satisfied our criteria or signed a commitment agreement. We're asking operators to enter into a binding commitment about their plans."

Such a binding commitment, said a department spokesman, would come with penalties if broken. The spokesman declined to specify the penalties, saying that they are "commercially sensitive". He said that none of the operators was willing to sign the commitment and that the State had no choice but to proceed with its own plans to cover the rural areas as part of the overall plan.

Six companies have expressed an interest in tendering for the project, which will have a duration of 25 years. They are: Eir; Siro (the joint venture between Vodafone and the ESB); Sean Bolger's Imagine; eNet; the French telecoms firm Bouygues; and Gigabit Fibre, a new company set up by former Vodafone, Eircom (now Eir) and O2 executives to tender for the NBP. The tender will incorporate two regions.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business