Data Electronics and Canadian-owned Axia are among the bidders for a contract to manage the State's €65 million regional broadband network.

The 10-year franchise contract will give the winning bidder the right to manage Government-owned telecoms networks throughout 19 regional towns .

Local authorities are building the fibre optic networks with Exchequer funding in a bid to increase the amount of telecoms services in the regions.

The successful bidder for the contract will share revenue generated by the networks with local authorities, in what is a potentially lucrative yet risky venture.

An Axia spokeswoman confirmed it had submitted a bid through its Irish subsidiary, Axia Ireland, which is 10 per cent owned by food group IAWS.

She declined to comment further on the details of the bid.

It is expected Axia and Data Electronics, a Dublin-based firm that owns two internet data centres in Dublin, would partner with equipment suppliers such as Hewlett-Packard to deliver infrastructure for the fibre networks.

It is unclear if firms that had expressed an interest in the contract - such as Limerick firm Enet, which is linked with Michael Tiernan Properties - submitted final bids for the contract.

A spokesman for the Minister for Communications, Mr Ahern, would not comment on the bidding process. Domestic telecoms firms such as Eircom or Esat BT were not allowed to bid for the contract, which has limited the amount of bids submitted.

Under the rules of the tender process, no holder of an Irish telecommunications licence could apply for the contract to manage the Government's fibre network.

Mr Ahern said this decision was taken to "stimulate the market appropriately".

The Government wants to bring in a new telecoms player, which does not have its own network in the Republic or have an existing relationship with other Irish firms.

It is hoped that this approach will enable the successful bidder for the management contract to promote and market the Government's fibre optic network on an equal basis to all the players in the Republic.

A code of practice recently drawn up by the Government for the management of the fibre says that the principle of open access is core to the provision and allocation of the publicly funded fibre.

The evaluation criteria to draw up a shortlist for the tender awards marks for the overall approach and strength of the business plan submitted by a firm, relevant experience and the ability of a bidder to finance its plan.

A final decision on the contract is expected to be made by the Government in September.

Among the 19 towns that will benefit from the construction of the networks are Cork, Dungarvan and Waterford.