Axia NetMedia, a Canadian telecoms firm, will bid for the contract to manage the Government's proposed new €70 million fibre ring network in 19 regional towns.

The firm, which is quoted on the Toronto Stock Exchange, will also propose setting up a nationwide internet protocol network to manage all the Government's telecommunications requirements.

This network, which would cost at least €300 million, would compete head to head with Eircom and Vodafone, which currently hold a contract to supply telecoms and internet to all State bodies.

The revenue generated from the Government would enable the network management firm to open its network in areas with little broadband capacity to other firms for the provision of low-cost internet to consumers and businesses.

Mr Robert Hansford, president of Axia's European infrastructure business, said yesterday the firm's plan to aggregate Government demand on a new IP network would result in major savings.

"There is no reason why the Government could not change its cost structure by billions of euro. It would enable the State to introduce a range of e-applications including centralising procurement, healthcare and education," he said in an interview yesterday.

Axia plans to use technical partners such as HP and Cisco to help it construct the network. However, it only plans to build new fibre where there is no existing infrastructure or an incumbent firm does not open its network for use.