Irish business and consumers can look forward to much faster and cheaper international telecommunications services due to a new cable being laid by Government and telecommunications giant, Global Crossing.

Following initial delivery by mid-2000, Ireland will have a telecommunications infrastructure on a par with that of the US and the major EU states, according to the Government.

The new cable will provide a high-speed, high-capacity telecommunications link to the US and Europe, allowing businesses to transmit huge volumes of data at a reasonable cost.

The new infrastructure should also create greater competition for international telecommunications services for consumers The announcement was made yesterday at a ceremony attended by the Taoiseach, Mr Ahern, Tanaiste, Ms Harney, and Minister for Public Enterprise, Ms O'Rourke at the official opening of the 100 acre National Digital Park at the Citywest Business Campus on the Naas Road.

The IDA envisages the expanded capacity will put Ireland ahead of its competitors in attracting high-quality investment from abroad, and predicts that up to 10,000 people could be employed in e-commerce activities at the National Digital Park by 2005. According to Mr Sean Dorgan, IDA chief executive, there are already a number of foreign investments in the pipeline, which could be greatly advanced by the latest announcement.

Global Crossing, which is in the process of building an advanced connectivity network in five continents, promises connection to voice, video and data communications capacity well in excess of current and predicted requirements for the next decade.

Under the agreement, the government, IDA and Global Crossing will act as a bandwidth capacity manager for private telecommunications operators wishing to purchase bandwidth - or telecommunications capacity. They have jointly agreed to the total provision of 25 gigabytes-per-second capacity to the US and 24 European cities at a cost of £60 million (€76 million) over three years.

The Government has agreed to underwrite the deal with a down payment of £5.5 million (€7 million) which may be expanded to £12 million (€15.2 million) depending on take-up by the private sector. The Government says it is confident private telecommunications operators will cover the balance of the required investment because it has secured a more competitive collective package than individual companies could have managed alone.

Over the next few days, the Government will invite local and global telecommunications companies to make a commitment to invest in and provide services on the new infrastructure, thus making this one of Ireland's first public/private partnerships.

According to Mr Brendan Tuohy, assistant secretary at the Department of Public Enterprise, Global Crossing was chosen following an open tender process, on the basis of speed of roll out, and cost. "Telecommunications are to e-commerce as grass is to agriculture. The more grass you have, the more business you generate," Mr Tuohy said.

Global Crossing will link Irish businesses and Internet users to the rest of the world through a large under-sea fibre-optic cable system. Its AC1 and AC2 pipes, connecting to the US and Europe, meet at Land's End, Cornwall.

From there, they will connect to two Irish "tele-hotels" which will act as central points for private telecommunications operators to extend their own networks throughout the country. The first tele-hotel will be located at Citywest, and although a decision on the second is pending, it is likely to be situated at East Point Business Park in Dublin.

"Today's announcement is the culmination of the vision outlined at all those seminars, interviews and Dail speeches over the past two years. Soon every man, woman and child in Ireland can avail of high-speed Internet access, and peripherality will no longer be an issue," Ms O'Rourke said.

The announcement was welcomed by business groups. The Chambers of Commerce of Ireland said that the lack of high-speed telecommunications links has been a "very real handicap to e-commerce growth".

One of the State's larger employers, Hewlett Packard, said the new initiative sends a "strong signal" of Government support for e-commerce.