Eir awaits decision on rural broadband proposal

Alex White’s department to announce decision next week along with tender process

Eir is awaiting to hear whether the Department of Communications has accepted its proposal to connect 300,000 homes to its new fibre broadband network. Photograph: Andrew Matthews/PA Wire

Telecoms firm Eir will find out next week whether the Department of Communications has accepted its proposal to supply fibre broadband to 300,000 homes originally earmarked for the Government's rural broadband scheme.

The department’s decision, to be announced on Tuesday as part of the formal tender process, will have a major bearing on Eir’s future business plans and the viability of the scheme itself.

Minister for Communications Alex White's original strategy involved the roll out of State-subsidised high- speed broadband to 737,000 homes and businesses in rural Ireland by 2020.

The proposed intervention footprint was based on the business plans of existing providers, including Eir.

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However, at the last minute the former semi-State pledged to connect a further 300,000 homes to its new fibre broadband network.

The department subsequently hired KPMG to assess the robustness of the company's revised business plan.

Under EU state-aid rules the Government cannot subsidise an intervention if existing private operators say they will supply services to the same areas.

Rival broadband providers claim any move to narrow the proposed intervention area would make the scheme unworkable as the remaining 400,000 premises are located in the places hardest to reach.

In a statement Eir told The Irish Times the company remained committed to previous investment announcements.

A spokesman said Eir planned to invest up to €400 million in its fibre broadband network over the next five years, potentially increasing its reach from 1.3 million to 1.9 million homes. This would give 80 per cent homes and premises here access to high-speed broadband.

However, Fine Gael TD for Kildare South Martin Heydon has raised concerns about Eir's proposals.

“My concern is that private operators such as Eir are announcing very ambitious plans to roll out Fibre to the Home (FTTH) to 66 regional towns and 300,000 rural homes without any clear timelines for delivery or any proof that they have an ability to deliver it quicker than State-led investment.

"Despite many big announcements I am only aware of 150 houses in Belcara in Mayo that Eir have piloted with FTTH."

The department is likely to announce a single tender process next week. With the State divided into two or three regional lots, a commercial operator could bid for one, two or three lots.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times