Telecoms operator Eircom says that it is no longer going to proceed with plans for an IPO because it sees encouraging signs of momentum in its business and may not need to raise capital on the markets.
Dublin: 21.09.2014 01.09PM
Pat Rabbitte, TD, Minister for Communications, Energy and Natural Resources
Communications Minister Pat Rabbitte has said his department has Cabinet sign-off on a €512m plan to ensure 1,100 villages in areas commercial operators don’t consider viable will be connected to future-proofed fibre networks.
Rabbitte said in urban areas in Ireland, broadband is already comparable with any city in Europe or the US and that industry investment since 2012 has been €2bn.
Currently, Eircom is rolling out a €400m Next Generation Access fibre network that will provide 1.4m homes with 100Mbps by 2016 – 800,000 homes can now access this network.
As well as this, UPC has invested €500m in connecting more than 700,000 homes with 200Mbps broadband and businesses with up to 500Mbps broadband.
The ESB is entering into a joint venture with Vodafone to bring fibre to towns and villages across Ireland in a plan that will address 450,000 homes.
And three out of four of Ireland’s mobile operators have begun rolling out their 4G networks.
However, Rabbitte pointed out that the private-sector companies’ plans do not address 1,100 villages and districts in rural Ireland, amounting to around 900,000 homes and businesses.
He said the Government is deliberately stepping away from metrics, such as having a minimum of 30Mbps to every home by 2015, and will instead look further down the line and aim to have future-proofed fibre as readily available as possible.
The new plan envisages spending between €355m at the lower end and €512m at the upper end to connect between 1,000 and 1,200 villages.
“Large tracts of Ireland have a basic service that is not acceptable. People are entitled as citizens to the same quality and there’s a huge argument in terms of regional development and facilitating businesses in provincial Ireland.”
He pointed out Ireland spent €17.5bn on its roads between 2002 and 2012 and virtually nothing on telecoms infrastructure, which is vital to the future.
“Fibre is the Rolls-Royce of connectivity and this investment will provide the opportunity for parts of rural Ireland to anticipate they will have this access.”
He said it is intended to connect rural areas with fibre via ESB poles whereby a third, slightly lower-hanging cable containing the fibre would be added and which would be contained in a protected sleeve.
Rabbitte said the plan is ultimately to address areas simply not served by existing operators and that a commercial operator selected by the State would sell the fibre services to homes and business.
Delivery of the fibre network is dependent on the Government also qualifying for funding from the European Investment Bank, as well as getting funds from the Strategic Investment Fund (National Pension Reserve).
Rollout of the new infrastructure will only happen once a detailed mapping exercise is carried out for the European Union.
While Rabbitte acknowledged the rollout won’t be complete “during the life time of this Government” he said the aim is to have the process complete in the next four years.
“Data is exploding. What we know for certain is the pace of change of technology requires future-proofing, not solutions that would be inadequate in a few years. It’s important to get the solution right.”
Rabbitte said he is hopeful the arrival of the ESB/Vodafone joint venture will help drive competition and ensure services are affordable.
“Eircom sees the new joint venture as competition for them, but competition is good.”
In talking with the Irish Farmers Association, he said the use of ESB poles to distribute the new fibre will not require any changes to existing relations with landowners.
Ultimately, Rabbitte said, the people of Ireland, especially rural Ireland, right now want the proper broadband quality that people are enjoying in towns and cities across the world.
“People of rural Ireland are more concerned about getting a quality service than whether the State owns the network.”
The real reward, he said, will be the economic impact fibre will have on local economies.
“The exciting thing is it will provide young people in rural Ireland with the opportunity to employ themselves and stay employed and stay in their own region.
“This is an opportunity that the entire west coast of Ireland never had before when faced with emigration.
“This technology offers the opportunity for people to make a living in their domestic environment.”
He cited the example of an architect in Carrick-on-Shannon, Co Leitrim, who works with customers in London, who would be otherwise unemployed if not for an 80Mbps broadband connection. Another company, Western Print & Packaging in Loughrea, Co Galway, has seen its business prospects transformed because of the ability to transact online.
“I believe this kind of transformation can have the same impact in Clonakilty or anywhere else in the country,” Rabbitte said.