Consumers and businesses outside Dublin should see a dramatic reduction in broadband prices in the next few months following a huge cut in wholesale telecoms tariffs by the ESB and Esat BT.
The telecoms initiative should remove the price differential that currently exists between Dublin and the rest of the State, and was warmly welcomed by industry and the Government yesterday.
ESB and Esat BT say they will supply wholesale broadband products to more than 40 towns in the regions at prices up to eight times cheaper than are currently available from suppliers.
The Minister for Communications, Mr Ahern, said he expected the initiative would attract new internet firms to the Republic.
It should also enable the Government to meet a goal of moving Ireland within the top 10 per cent of OECD States in terms of broadband take-up rates, he added.
The ESB and Esat BT broadband initiative is likely to pose a significant threat to Eircom's revenues, a portion of which is generated from providing broadband to regional towns.
An Eircom spokeswoman said the new plan was duplication.
"Eircom already has fibre running into all of these 40 towns and as Comreg's recent quarterly report showed, we have the fourth cheapest national leased line price out of 15 OECD States."
ESB will use its new €60 million nationwide broadband network that it has wrapped around its electricity wires to supply the cheap broadband products.
Esat BT will use its own regional fibre optic network that runs along the State's railway lines for its new cut price broadband products.
The new cheaper products will probably result in more pressure on its own wholesale revenues in the short term.
Because telecoms firms will be able to buy connectivity cheaper they should also be able to sell consumer broadband products such as DSL at cheaper rates.
The broadband initiative is the third announcement made by telecoms firms and the Government in just a week, suggesting a more buoyant future for the sector following years of stagnation.
IDA Ireland welcomed the initiative as a key measure to address the issue of businesses in towns throughout the State being in a disadvantage relative to Dublin.
Mr Sean Dorgan, IDA chief executive, said the new pricing would enable the IDA to push the argument for regional locations with prospective investors.
Up until now the huge cost of telecoms and internet connectivity in regional locations has been seen as factor that has caused firms not to invest in these areas.
Some of the major towns and cities that will be served by the new cut-price connectivity products are Cork, Limerick, Galway, Sligo, Ballina, Dundalk, Waterford and Wexford. Many others will be served by the product too.
