The number of homes and businesses covered by the National Broadband Plan (NBP) is to be reduced by up to 300,000 following an agreement between the Department of Communications and the State's largest telecoms group, Eir.
The company has reportedly signed a “commitment contract” with the department to cover the homes as part of its commercial rollout, separate from the plan.
The move will significantly reduce the size of the Government’s intervention, which currently covers about 840,000 homes, and reduce the size of the State subsidy required. However, it also has ramifications for the two other shortlisted bidders in the National Broadband Plan tender process.
Eir has been accused of gaming the process by including the 300,000 homes in its commercial rollout at the last minute having previously deemed them uneconomic. Rivals claim that by removing the “quasi-commercial element” of the scheme, the company is trying to make it too costly for others to undertake, an accusation Eir denies.
Revised business plan
The department had initially ignored the company’s revised business plan, and included the 300,000 homes in the State scheme. However, this decision now appears to have been reversed on foot of fresh commitments from the company.
Minister for Communications Denis Naughten is now expected to seek Cabinet approval for the proposed adjustment before apprising the three shortlisted bidders – Eir, Siro and Enet – of the final intervention map early next month.
A spokesman said the department was working towards finalising the map for the procurement process. He said it would take into account “any concrete and credible plans” from commercial operators as well as commercial plans that have not been realised.
Eir declined to comment. The former State monopoly is spending over €600 million upgrading its existing copper network to fibre, which facilitates faster broadband speeds. It plans to connect the 300,000 homes by the end of 2018, which will bring its overall reach to 1.9 million homes.
Even with the revisions, the National Broadband Plan will cover about a quarter of the State’s housing stock, making it one of the largest State interventions in a telecommunications market anywhere in the world.
Rural homes
The Government is expected to stump up approximately half the cost, which could run to between €1 billion and €1.5 billion.
However, the State’s legacy of one-off housing and bad planning makes the overall cost of the scheme difficult to estimate.
In the United Kingdom, government pledges to connect all rural homes to a similar scheme were abandoned because of the cost of running fibre cable to remote locations.
The department here is desperate to ensure the tender is legally bullet-proof, given the UK experience. A botched process could leave rural parts with substandard connectivity for decades, a scenario that would accelerate the Dublin-centric nature of the Irish economy.
