Siro cuts internal funding for its fibre broadband rollout by €200m
Siro, the joint venture between Vodafone and the ESB, has cut internal funding for its fibre broadband rollout amid intensifying competition from Eir, Virgin and a future National Broadband Plan network.
The company - which had promised to invest €450m from joint partners Vodafone and the ESB - now says that it will only invest €250m in the current climate.
The rest, says chief executive John Keaney, is now being sought through bank loans with the company declining to give any more timelines for completion dates.
The company has also declined to say whether its fibre broadband business was profitable.
Siro has fallen significantly behind on its broadband rollout in Ireland.
Launched in 2015, the company had promised to ‘pass’ 450,000 homes by 2018, but has only achieved half of that to date, blaming planning and structural issues. It has 42,000 active customers.
The bank loans are hoped to see the Siro through to completing its 450,000 target, although the company would not say when this is expected to happen.
However, the company is facing increased pressure from intensifying competition, particularly from Eir, which recently announced that it will overhaul its entire urban network with a fibre-to-the-home one.
This would eliminate Siro’s competitive advantage and create a new, formidable rival in areas that Siro is targeting.
Siro also faces the prospect of a possible extension of Virgin Media’s cable network, with Virgin parent Liberty Global currently positioning itself for an expansion of its ‘Project Lightning’ plan.
Fibre-to-the-home networks deliver much faster speeds than traditional copper DSL services, with download speeds of 1,000Mbs possible.
The appeal to banks for money is the latest setback for Siro, which pulled out of the bidding for the National Broadband Plan after reassessing the economics of a rural broadband network.
Earlier this month, the ESB’s head of strategy and innovations, Denis O’Leary, said that Siro had ‘passed’ 242,000 homes with fibre broadband in 37 Irish towns.
It also now has 42,000 customers, giving it a takeup rate of 17pc.
The company - a joint venture between the ESB and Vodafone - says that it remains committed to reaching 450,000 homes in 50 towns and suburban locations around the country, despite being behind on its rollout plans.
With 14 retailers reselling its wholesale broadband, Mr O’Leary said that its operation is a “great success”.
A spokesman for the company defended the bank loan, claiming it is "a means of accelerating our access to funding as our construction intensifies". The spokesman added that "we are no longer dependent on the equity from our shareholders".