Senior Government and industry sources are concerned that multinational companies interested in locating in the State are unable to obtain from the main Irish telecommunications companies the seamless, global networking capabilities required by large corporates.
However, some analysts say few countries in Europe offer more sophisticated networking capabilities that those currently available here.
Only the Irish division of MCI/ WorldCom, through its UUNET subsidiary, can provide so-called "tier-one" connectivity - direct access to the top-level networks that form the backbone of the Internet. Critics say neither of the State's two largest carriers, Eircom nor Esat had attempted to formalise a network agreement with their own partners, which could provide tier-one capability.
As a result, several senior sources say they would like to see Esat and Eircom bought out by larger, global carriers. The current move by Scandinavian carrier Telia/Telenor to acquire Esat, and the availability of 35 per cent of Eircom, are thus the subject of much interested speculation.
Esat's links with EUNet, the European business Internet network, could enable it to become part of a top-level network since EUNet is a subsidiary of the giant international tier-one carrier, Qwest. Eircom also has had potential links to Qwest through Qwest's partnership with KPN, the Dutch telecommunications company which has a minority shareholding in Eircom. But KPN announced this week its intention to sell its entire holding in the Irish company. Neither company has forged a partnership with Qwest.
While both Esat and Eircom can offer high level "broadband" connectivity - the ultra-fast, large capacity networks that corporates want - they must do this by various agreements between the large global network operators. They are not part of such tier-one networks themselves. Sources say this makes the job of enticing companies to locate in Ireland more difficult.
"It's the first question they ask: `Who are your tier-one carriers?'," says one senior industry analyst. While Ireland can boast one tier-one provider in UUNet, "the problem is you need a second tier-one provider because these guys are looking for...... connectivity 24 hours a day, 365 days a year," he says.
While Eircom and Esat are not connecting directly to all the tierone "nodes", or connection points, in Europe, senior consultant Mr Robert Hackett with Mason Communications in Dublin says both companies "really have a first-class network right now". He points to the proprietary fibreoptic networks each has installed within the State and the broadband, high-capacity links via underwater fibreoptic cables that both have to Europe. With the completion of telecommunications company Global Crossing's ultra-high capacity cables across the Atlantic, which will directly connect Ireland to the US Internet backbone, the State will have a topclass network, he says. The Global Crossing project and a plan for several "telehouses" - networking "hotels" that will enable a number of carriers to interconnect through one point rather than laying cable between partners - "will also attract big US (telecommunications) players that would have overlooked Ireland in the past," he believes.
Many companies, including major technology corporations, say they are currently happy with the connections they have here. Database company Oracle is "very much network driven" and has been satisfied with the connectivity it has obtained in the Republic, says Irish managing director Mr John Appleby. At the same time, he says he cautioned the Oireachtas Joint Committee on E-Commerce earlier this year that "whatever is the leading edge globally, it must be available here".
One analyst said: "There's no problem with connectivity and there's loads of bandwidth, but these (multinational) companies are looking for tier-one providers."
Both Eircom and Esat are either ripe for a takeover bid or a major partnership, say analysts, which could change the telecommunications landscape in the State very quickly. Esat and Eircom say their networks and the continuous upgrades they are making to them are more than adequate for the Republic's market.
Mr Richard Cook, managing director of Esat Net, disputes UUNett's status as a tier-one provider in Europe, noting that its networks are leased here and in much of Europe. He says Esat Net has a connectivity agreement with KPN/Qwest.
Mr Gerry O'Sullivan, Eircom's director of corporate affairs, says Eircom uses KPN's EUNet network into Europe and the company has "tier one taking us into the US". Existing bandwidth is more than sufficient and Eircom cannot fill what is currently available.
