Is it the end of the line as SSE pulls out of National Broadband Plan?

29 Jul 2018

Image: javarman/Shutterstock

SSE’s departure from the National Broadband Plan means the Government is running out of options to digitise the nation.

SSE last night (28 July) pulled out of the National Broadband Plan (NBP), abandoning its role in a consortium it had joined with David McCourt’s Enet.

The news potentially casts the NBP into further disarray as the Enet-SSE consortium was the last remaining bidder for the plan and contracts were due to be signed in autumn.

If it spells disaster for the plan – which recently received European Investment Bank backing for €500m – it will be equally disastrous politically for the present Government as more than 540,000 premises, or close to 1m people, will still remain underserved with adequate broadband.

With the spectre of an election year looming, it is not the kind of news the Government wants to give to a rural population tired of waiting for broadband.

SSE now joins Eir and the Vodafone-ESB joint venture Siro, which both pulled out of the procurement process in the past year.

In a statement, Enet’s McCourt said he is still committed to the plan.

“While we cannot publicly discuss the NBP process, I do want to take this opportunity to underline, in the strongest possible terms, our continued commitment to Ireland and to the Government’s policy of delivering a high-speed rural broadband network,” McCourt said.

“The consortium has always understood the criticality of the project to the State. As a result, we are considering and reviewing structures so as to ensure the optimum response to the tender process for the National Broadband Plan by a group of investors with unmatched success in telecoms, infrastructure and public private partnerships to deliver it.”

SSE, which is engaged in considerable broadband, 5G and data centre work in the UK, said: “We have nothing further to add beyond the statement of the consortium.”

The devil, it seems, was in the detail has been covering the NBP since its inception in 2012, including the various hoops and changes along the way.

The NBP, with a potential cost of up to €1bn, originally sought to serve more than 900,000 premises and more than 1.8m citizens on the wrong side of the digital divide.

A deal between Eir and the Government in 2017 saw the plan redrawn with Eir taking on 300,000 premises in rural areas, reducing the intervention area to about 542,000 premises, meaning about 990,000 people or 21pc of the national population and 381,000 members of the labour force.

Siro left the process last autumn. Eir left the process earlier this year.

The plan, while ambitious and broad, still has the potential to put Ireland in the premier league when it comes to nations – let’s face it, most nations – that are struggling to deploy rural broadband.

However, numerous conversations with operators have indicated that the contracts proposed were too onerous, convoluted, and boiled down to being impractical and unworkable.

It remains to be seen if the Government and Enet will press on. But important questions need to be asked.

  • Does Enet have the resources on its own to see it through without the support of a partner such as SSE?
  • Are there sufficient contractors in the market to deploy broadband at scale to 21pc of the population?
  • Should the Department of Communications go back to the drawing board and come up with more commercially realistic contracts that would entice Eir, Siro and others back to the table?

SSE has clearly done its due diligence and has walked away.

No one would think any less of the Government or its NBP deployment team if they rewrote the plan.

But one thing is becoming less and less certain: shovels in the ground this side of 2020.

A statement has been issued by the Department of Communications on the matter. “The Department of Communications, Climate Action and Environment is in the final stages of a procurement process to appoint a company to roll out high-speed broadband to all houses and businesses in every area of the country.

“We are expecting the final tender in the coming weeks with a conclusion to the process expected shortly thereafter.

“Details of the procurement process remain confidential until a preferred bidder is appointed, and progress to award a contract is finalised.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years