Eir CEO defends decision to exit National Broadband Plan

Carolan Lennon says investing in rural broadband complex and costly

Eir chief executive Carolan Lennon, and director of regulatory and public policy Gary Healy: Ms Lennon said 42 per cent of Irish people lived in rural areas compared to an EU average of 27 per cent. Photograph: Dara Mac Dónaill

Eir chief executive Carolan Lennon, and director of regulatory and public policy Gary Healy: Ms Lennon said 42 per cent of Irish people lived in rural areas compared to an EU average of 27 per cent. Photograph: Dara Mac Dónaill

 

Eir’s chief executive Carolan Lennon has defended her company’s controversial decision to pull out of the Government’s broadband process at the last minute.

In her first appearance before the Oireachtas communications committee as chief executive, Ms Lennon said that 42 per cent of Irish people lived in rural areas compared to an EU average of 27 per cent.

“This reality, coupled with the geography of our environment, poses an enormous challenge to Eir in making the business case for further fibre network investment in more remote areas where costs would be prohibitive,” she said.

Eir took the “difficult” decision to withdraw from the bidding process for the National Broadband Plan (NBP) in January after spending more than €7 million on its bid, she said.

“On a personal level, I can assure you [that] arriving at that position was very disappointing. However, as a commercial organisation, we could no longer proceed.

Bidding process

“Despite leaving the bidding process, Eir continued to be highly engaged in the process as a provider of pole and duct infrastructure access to the remaining bidder and has spent significant time and resources to help the Enet consortium,” she said.

Ms Lennon was speaking as Minister for Communications Denis Naughten announced that the last remaining consortium in the NBP process, now led by investment firm Granahan McCourt rather than by Enet, had submitted its final tender, bringing the project a step closer.

She told the committee that up to 70,000 homes and businesses covered by the plan may need to be connected to technologies other than fibre for cost reasons.

There has been an assumption that the vast majority of the 450,000 homes covered by the plan would be connected to high-speed fibre broadband to insure against obsolescence. Ms Lennon said it would be too costly to roll out fibre to the most rural parts and that up to 15 per cent of the homes and businesses may need to serviced with other technologies, such as wireless broadband.

Customer charges

She also rejected suggestions that Eir overcharged customers to connect them to the company’s network, an accusation that has been consistently levelled at the company by industry umbrella group Alto.

Eir’s wholesale arm, Open Eir, currently charges retailers using its network a fee of €270 to connect customers with a direct “fibre-to-the-home” service if they are located more than 50 metres away from its network. Retailers can either absorb the cost or pass it on to customers. Eir’s retail arm currently waives the cost.

Responding to suggestions that rival Siro charged customers much less, Ms Lennon said Eir’s price reflected the costs of connecting people in remote areas whereas Siro prices were mainly for urban areas.