The Government's National Broadband Scheme (NBS) will be awarded as a single contract and the winning bidder will have to provide a wholesale service to other providers.
Speaking last week Minister for Communications Noel Dempsey said "tenders will be scrutinised and cannot be a single technology solution to cover all areas".
Neither Eircom nor BT Ireland, the country's two largest telcos, currently have a commercial wireless or satellite service, instead serving their customers with DSL technology that is more suited to urban areas.
As a result there could be a round of industry consolidation as the big players attempt to round out their portfolio in advance of indicating interest in the NBS by the deadline of July 5th.
Last Mile Broadband, a wireless provider in the midlands, yesterday confirmed it was "in play" for acquisition by larger players who needed a wireless component in order to bid for the NBS.
The company was valued at €5 million last year when it raised €2 million under the Business Expansion Scheme.
Since then it has doubled its subscriber base and significantly expanded its network in the midlands. It now has 17 licences from ComReg and a network of 45 base stations.
Industry sources suggest that Last Mile, which was founded by ex-Ericsson executives Cyril Moriarty and John Gibbons in 2002, could now be worth €7-€10 million.
The value of licensed wireless operators increased this week following a decision by ComReg to allow them to increase the distance they can serve from a base station to 20 kilometres.
An information memorandum sent by the Department of Communications to interested bidders confirms that a single five-year contract will be awarded for the NBS.
The winning bidder will have to provide broadband to the 10-15 per cent of the country not currently being served by commercial providers.
The State subsidy for the roll-out of services to the rural areas identified will be paid out "at agreed milestones".
The Department of Communications will retain a final payment which will only be paid if the service provider has met the defined performance criteria.
An indicative timetable included with the memorandum suggests that the contract will be awarded next December.
The requirements of the scheme are such that bidders will need to be able to offer broadband services using a range of different technologies.
THE REQUIREMENTS
• An always-on service
• A download speed of 1Mbit/sec
• An upload speed of 128kbit/sec
• Each connection cannot be shared with more than 48 other subscribers (contention ratio of less than 48:1)
• Users must be allowed download at least 10GB of data a month at no extra charge
• The service must be capable of supporting Voice over IP telephony and online gaming.
• Pricing must be in line with that offered to urban broadband customers.
