Broadband is one area in which Ireland is (potentially) already out of the starting gates, and it could teach Europe some vital lessons.
Yesterday (27 June), the European Commission (EC) and the European Investment Bank (EIB), along with French, German and Italian banks, created the first pooled €420m fund to finance broadband infrastructure.
Called the Connecting Europe Broadband Fund, it will be managed by Cube Infrastructure Managers (Cube IM) and aims to pool around €500m for guaranteeing broadband investments. It could be leveraged up to at least €1bn in investment over the next five years.
The fund will be constructed as follows: the EIB will invest €140m, the EC will invest €100m, Germany’s KfW will invest €50m, Cassa Depositi e Prestiti will invest €50m, Caisse des Dépôts will invest €50m, Cube IM will invest at least €5m, and an additional €25m will be contributed by other European private investors.
This isn’t the first such investment backed by the EIB this year.
In recent months, we reported how the Irish Government won approval from the EIB for €500m in new financing for the country’s National Broadband Plan (NBP), which aims to connect 542,000 rural homes and businesses with next-generation, high-speed broadband.
That €500m can also be leveraged by a €275m approval in State aid to 2020, not to mention the private investment likely to come from players such as SSE once it gets into the game.
Lessons from Ireland
In many ways, this means Ireland is leading the field in terms of European nations that are struggling to deliver broadband over wide rural areas with low population density.
In fact, Ireland is becoming a pretty interesting place to watch from the perspective of European broadband.
The last remaining consortium in the race for the NBP is an Enet-SSE consortium. SSE, which owns Airtricity, is one of the largest infrastructure players in the UK and is fostering its own plans to become a fibre infrastructure player across the UK, having already won 5G infrastructure and data centre deals with Three.
If all goes to plan – with a contract awarded in the autumn and shovels hitting the ground in days as promised by Communications Minister Denis Naughten, TD – the education and expertise from Ireland could be priceless in a European economic development context.
The Enet component of this consortium is led by David C McCourt and has made it clear that it plans to take its expertise gained in Ireland and bring it to Europe. In some ways, Ireland will be a shop window in this regard.
Also worth watching is Sean Bolger’s Imagine Communications, which recently secured a €120m investment from Canadian investment firm Brookfield Asset Management to support the roll-out of high-speed fixed 5G broadband infrastructure in Ireland and across Europe.
Ireland’s incumbent operator Eir has been acquired by French telecom mogul Xavier Niel’s Iliad but questions are already being asked about the future of plans to deploy broadband to 300,000 homes in rural Ireland as agreed with the Irish Government. Niel focuses on urban-based broadband investments but has also shown a bit of creative flair in terms of the launch of a new low-price mobile business in Italy that will shake up the market there.
Yesterday, Virgin Media revealed that it has surpassed the 900,000 milestone in terms of homes passed with 1Gbps fibre and has its eyes on a further 100,000 premises over the next two years as part of its £3bn Project Lightning Plan.
Siro, a joint venture between Vodafone and the ESB, is steadily rolling out fibre in the regions. By the end of this year, it could be almost midway towards its goal of delivering high-speed fibre broadband to 500,000 homes and businesses across 51 towns in Ireland as part of a €450m investment.
If Ireland plays its cards right, it could go from being a broadband laggard to a prominent leader in the European quest to deploy fibre infrastructure to support generations to come.
Updated, 3.45pm, 28 June 2018: This article was update to clarify that the EC will invest €100m, not the EIB.