Metromedia Fibre Networks, the US optical networks and managed solutions provider, is building a $40 million (€46.6 million) dark fibre ring around Dublin.

Construction of the ring will increase competition for broadband suppliers in Dublin, and should lead to better prices and services for corporate customers.

The ring contains approximately 462 pairs of fibre and is capable of carrying a very large capacity of data, voice and Internet Protocol traffic.

The investment will complement Metromedia's $65 million data centre in Citywest, and will enable the firm to offer a full range of network and managed services.

Construction of the first phase of Metromedia's fibre ring has already started, linking the city centre with several business parks, including Citywest.

This 110-kilometre stretch will cost about $20 million to complete and should be ready for service by July and in full commercial use by the end of that month.

A second phase of development, which will extend the network by some 45 kilometres, is expected to go live early next year.

It is understood Microsoft will use the fibre ring to connect its Sandyford operations with Metromedia's 125,000 sq feet data centre in Citywest.

Microsoft is the anchor tenant at Metromedia's data centre, which will host many of the servers and IT functions required to power its Microsoft.net strategy.

This strategy will enable Microsoft to distribute its software online and offer software as a service rather than the traditional out-of-the-box method.

Corporates will get global pricing for Internet connectivity despite the small size of the Republic, according to Mr Noel Meaney, chief executive of Metromedia Fibre Networks Ireland.

"In the past, companies here have been held to ransom," he added.

Mr Meaney said one of the first firms that will use Metromedia's Dublin networks and services is the video-streaming firm Akami.

Metromedia is one of several firms to buy international connectivity from the Government under its public-private partnership deal with Global Crossing.

Its Dublin operations will give its European customers access to its global network. It will also offer its US clients a way to enter the European market.

Metromedia has existing intra-city networks spanning 1,256,000 fibre miles in the US.

Revenues for the first quarter of 2001 were $77 million, 141 per cent greater than revenues of $31.9 million for the first quarter of 2000.