Broadband network at core of £197m e-commerce drive

The Government will announce a €250 million (£197 million) investment in e-commerce projects later today as part of its drive to develop an advanced communications infrastructure in the regions.

It is understood that the flagship element of the initiative will involve the construction of the first State-wide broadband network. It has been proposed by the ESB and will see the provision of telecoms infrastructure capable of supporting very high speed Internet and data services as far north as Buncrana in Co Donegal.

Some 13 public private partnership projects in total have been approved for funding under the Regional Operational Programmes of the National Development Plan.

The Government and European Union will provide about €77 million investment while private companies will fund the remaining €173 million investment.

Successful projects will promote the use of innovative technologies such as digital subscriber line and wireless local loop in areas which have poor communications infrastructure.

The Government programme is aimed at overcoming communication deficits in the regions to promote greater commercial and social use of the Internet.

One Government source suggested the programme would go some way towards bridging the digital divide between cities and rural communities. It would also position the Republic as an e-commerce hub, said the source.

The ESB's involvement in the first State-wide broadband network will mark the company's first move back into the telecoms market since it sold its stake in Ocean for £200 million to British Telecom.

Construction has already started on the network, which is being rolled out on ESB's existing electricity infrastructure. Fibre has already been laid between Limerick and Dublin.

The network consists of cables made of 48 separate fibres each with two-and-a-half gigabits of connectivity. It is deployed using a spiral wrap technique which enables a much faster roll-out than underground cabling.

This high capacity network would enable ESB to offer telecoms capacity for high speed Internet and data services as far north as Donegal and throughout the West of Ireland.

ESB is seeking to become a "carrier's carrier" by selling capacity on its network to operators who want to provide services in towns and cities outside Dublin.

The introduction of telecommunications competition in the border midlands and western region (BMW) would remove a major disincentive for private investment and promote job creation opportunities.

Many towns in these areas are only served by Eircom's local network and the lack of competition has resulted in higher prices and less resilience in services.

While some 19 internet data centres worth hundreds of million of pounds in investment have been announced for Dublin over the past few years, only two similar operations exist or are planned throughout the rest of the State.

The Government is hopeful that supporting the ESB's national network will prompt other telecoms operators to offer services throughout the rest of the State. This would make these areas more attractive for investment.

Some 28 submissions from companies were received by the Department of Public Enterprise for evaluation. All the projects have to be rolled out within two years as part of the programme.

A second tranche of some €123 million will be put out to tender for similar projects which accelerate investment in communications infrastructure over the next few years.