Eircom has scaled back plans to buy broadband connectivity from the Government and may drop a grant-aided project to bring digital subscriber line (DSL) technology to the regions.
The company confirmed last night it had decided to cut by a fifth the amount of broadband it would buy from the Government and was reviewing its regional DSL plan.
Eircom had agreed to buy 40 per cent of the total connectivity offered by the Government under a public private partnership with the US firm Global Crossing.
As an incentive to attract a major supplier of broadband connections into the State, the Government bought just more than half the total capacity on the cable. It then offered this at a low price of £5 million (€6.35 million) for 12 high-capacity lines.
A spokeswoman for Eircom said yesterday the company had reviewed its market requirement and would now purchase about 20 per cent less bandwidth. This was worth about £5 million, she added.
"In the short term, market demand has not met our projections," she said. "We have to track this demand."
Meanwhile, Eircom has placed a second government-aided project under review, by failing to sign a multi-million pound contract for a project to provide DSL in regional areas.
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