UPDATE: The Department of Communications, Marine and Natural Resources has awarded a 15-year contract to the telecoms consortium E-Net to manage the 26 metropolitan area networks (MANs) being rolled out under the Government’s e-commerce initiative under the National Development Plan.
Limerick-based E-Net will act as the managed services entity for the €65m Government-funded broadband networks that have been installed in 19 towns around the country to date, with more towns to follow next year.
The networks cover the main cities of Cork, Limerick, Galway, Waterford and Kilkenny as well as Wexford, Dungarvan, Portlaoise, Mullingar, Athlone, Letterkenny, Carrick-on-Shannon, Manorhamilton, Sligo, Dundalk, Drogheda, Monaghan, Cavan, Kingscourt and Carrickmacross.
E-Net will operate as an independent wholesaler, offering access to the MANs to a range of telecoms operators such as Esat BT, Aurora, Chorus, ESB Telecom and Eircom. E-Net will promote, manage and market the network infrastructure, offering a full suite of technical services to operators including ducting, sub-ducting, dark fibre, high-level managed capacity, colocation facilities and auxiliary services.
It is claimed that the pricing achieved in the contract is on a par with competitive pricing internationally. The Government also anticipates that the presence of high-speed networks at attractive prices will be a key driver of economic development in the regions.
At the launch Communications Minister Dermot Ahern TD called the deal “a unique public private partnership between government and the private sector”. The State had installed the infrastructure and the new entity would operate it and market its services, he said.
“It will offer more accessibility to the internet, with more choice and more competition,” Ahern declared. “We are pushing the network to areas where perhaps the commercial companies will not go, preventing a digital divide from developing.”
The minister added that Ireland was not alone in taking this approach to addressing the broadband access deficit that had built up in the country. “There’s been a rise in broadband take-up in France but even it had to go to the EU for approval for state aid to the regions because it wasn’t being provided by private companies in the open market,” he said.
“What we’re doing here will replicate what was done in Sweden where there are significant broadband speeds available in all areas of the country,” he continued.
The operation of the broadband networks should result in prices to the consumer that are orders of magnitude cheaper than costly leased lines and faster than technologies such as DSL, E-Net representatives said. The company, which was formed especially to bid for the contract to run the MANs, said it had good relationships with all of the telecoms carriers in Ireland and said it would operate in a “totally neutral and transparent way”.
E-Net and the Government will operate a revenue-sharing arrangement, which will see the Exchecquer receive a return on the investment in the MANs from the income generated by the project.
E-Net is headed by Michael Tiernan of Tiernan Properties and the company is backed by a €12m fund raised by a combination of ACT Venture Capital, Anglo Irish Bank, Bank of Ireland and private equity.
The company is chaired by non-executive director Eoin O’Driscoll, formerly of Lucent Technologies and currently chairman of the Enterprise Strategy Group. Speaking to siliconrepublic.com, O’Driscoll said that the organisation had built up a team with expertise in all of the necessary areas. “It has a strong regional dimension, a large infrastructural project dimension and a telecoms dimension,” he pointed out. The company’s chief operations officer is George McGrath, who formerly headed Ocean, the telecoms joint venture between the ESB and BT.
Kevin Thompstone, chairman of Shannon Broadband and chief executive of Shannon Development, hailed the awarding of the management contract to a firm based in the mid-west region. “A key objective of Shannon Broadband has been provision of regional broadband services at reasonable prices. We are confident that the awarding of this important contract to a regionally based firm will help achieve this objective,” he said.
Christian Cooke, chairman of the broadband lobby group Ireland Offline, welcomed the news but he emphasised that it would be vital that community groups in smaller towns be able establish links on to the nearest MAN cost effectively. “To use an analogy, a community network is like a housing estate that needs to connect to the national road infrastructure. The MANs were intended to be the slip roads. Until and unless they become accessible in a manner that is reasonable for a community network, it’s as if the minister expects these group schemes to connect directly to the motorways.”
It is understood that a total of 120 jobs will be created for the management of the new networks. Some 65 of these jobs will be created directly in Limerick City, while a further 60 indirect jobs will follow as the networks are being rolled out.
At the launch, Dermot Ahern TD also announced the next phase of the regional broadband programme. An additional 41 towns will be added to the networks over the course of 2005. The full list is: Athenry, Ballinasloe, Ballybofey, Bantry, Blarney, Bundoran, Carrigaline, Castleblaney, Castleisland, Castlerea, Claremorris, Clifden, Clones, Cobh, Cahir, Dingle, Donabate, Dunshaughlin, Enniskerry, Furbo, Kenmare, Kilcoole, Kildare, Kinsale, Knock, Longford, Maynooth, Midleton, Mitchelstown, Mountmellick, Nenagh, Newbridge, Rathangan, Ratoath, Sallins, Skerries, Skibereen, Sligo, Tramore, Trim and Youghal.
The Department of Communications, Marine and Natural Resources will now issue a call for proposals to the local authorities over the next few weeks. Following this, it is expected that the first construction work will begin in the autumn. Projects will be completed within 12 months. A further tranche of towns is expected to be announced in the near future as part of the Government’s expanding broadband action plan.
Responding to the news, Christian Cooke of Ireland Offline commented: “The success of the new initiatives across the country also announced today is entirely dependent on the success of the first phase, which will determined entirely by the extent to which existing networks serve local needs.”
By Gordon Smith
