Eircom is poised to offer a range of new services, including video on demand and high-speed Internet access through cable television. The move entails investment approaching £500 million (€635 million) and will challenge established players such as NTL and Irish Multichannel, which are assembling their packages for consumers.
As part of the move, Eircom has signed a deal with two London-based companies called Future TV and Yes TV. The two are digital entertainment groups providing facilities to cable and TV firms which want to offer multimedia over a standard cable or telephone lines.
The companies will provide Eircom with the software and hardware necessary to run its system. They will also be able to give Eircom access to a wide range of content. It is understood that one of the companies will eventually be selected to provide the services on a long-term basis.
Today's Business & Finance magazine contains details of the plans involving Future TV and says the UK firm has signed deals with several Hollywood studios and has access to 20,000 music videos.
The technology which will be deployed is known as ADSL. It entails installing new technology in the telephone exchanges and will allow Eircom to send considerable amounts of data down copper wire phone lines at very high speeds.
Consumers will be able to watch a video, make or receive calls and surf the Net at the same time, once the new technology is up and running.
"It is effectively bringing broadband to the home," said one source, a reference to the newer fibre-based technologies which currently allow for such transfers of data.
Deploying fibre cable to all residential homes is too expensive for big telecoms companies and ADSL provides an alternative means of enhancing the existing copper infrastructure.
The system will be tested in Dublin first and it is understood that the deals with Future TV and Yes TV are worth around £500,000.
But the money involved could be substantial if, as expected, a long-term deal is signed with one or both companies.
The system will cost several hundred million pounds to deploy and it is understood that the major urban areas, including Dublin, Cork, Galway and Limerick, will be targeted first.
Although no price has been decided upon, it is likely that Eircom will offer a bundled package of services - a tactic which NTL will probably adopt. NTL bought Cablelink last year for £535 million.
Last month, Internet Ireland introduced a service which allows users who have not yet gone online to get Internet access through their TV sets. The company, which is 75 per cent owned by Independent News & Media and Princes Holdings, plans to leverage the 260,000-strong customer base already provided by Irish Multichannel.
It is giving away 10,000 TV set top boxes through its Internet platform, Unison, which will allow users to go online through their televisions. The boxes will also retail at £299. Users of the Eircom offering will also need set-top boxes, which will probably be sold for around £200.
An Eircom spokesman confirmed last night that the company had contracted with Future TV as part of its ongoing trials for new broadband technology.
"Eircom will shortly move to phase two of the trials, which will focus on testing the technology's operational capability with a range of product offerings. Both Future TV and Yes TV have been contracted to take part in these trials," he said.
