Six telecommunications carriers have tentatively agreed to extend their networks into a £15 million (#19 million), 40,000-foot Dublin-based "carrier hotel" facility to be introduced in December, according to TeleNode, the Dublin facilities management company behind the project.
TeleNode, a start-up created by four former executives with telecoms company Stentor, believes the hotel, or telehouse, can facilitate the growth of e-commerce because it would concentrate in one site the carriers that can offer high-capacity, high-speed broadband Internet connections to e-commerce firms.
But telecoms industry sources said it remained to be seen whether major carriers would be a part of the telehouse, since TeleNode executives had not been involved with previous projects of this scope.
According to TeleNode managing director Mr Jeremiah Ryan, the company expects to confirm an initial $812 million (#7.611.4 million) tranche of funding from an American broker in the next two to four weeks. Overall, the project would be worth twice that amount, he said. The remaining funding will come from loans and other funds.
"We're hoping to have considerable inward investment from the US," he said, adding that the project had interested smaller investment groups as well as some of the large investment houses. He said he could not name the prospective investors due to confidentiality agreements.
A telehouse allows carriers to have a single point of exchange with other carriers for their networks and enables them to expand operations without having to build new facilities and infrastructure. The concentration of carriers should in turn attract e-commerce companies that require large amounts of broadband capacity.
Mr Ryan said TeleNode was looking at three existing Dublin sites for the facility. He said TeleNode would target the 25 companies that had not yet set up Irish facilities, out of the 36 companies that had received operating licences following the deregulation of the State's telecoms market.
The telehouse model has proven successful in other markets, particularly the US, but has not yet been tried here. TeleNode will offer both facilities and facilities management, to be overseen by five employees initially, growing to 14 by the second year of operations.
In July, telecoms company Global Crossing announced its intention to build two Dublin telehouses that would let carriers link to its planned global broadband network. Along with the construction of an Irish broadband network, the Global Crossing project is part of the State's public/private partnership programme.
Mr Ryan, who has said he has experience in setting up small telehouse facilities abroad, believes that eventually there will be three to four telehouses in Ireland. "It's our plan to be first to market," he said.
A senior industry source said he believed smaller carriers might opt for the TeleNode exchange but noted that costs could become an issue for both TeleNode and participating carriers, if significant economies of scale couldn't be achieved. Telehousing is "an extremely competitive and global market" with high costs and very tight margins, according to the industry source.
