Government will not fund Eircom’s fibre proposal

24 May 2008

The Government is unlikely to provide Eircom with the €150m it has requested to fund a €500m plan to upgrade Ireland’s fibre infrastructure. Communications Minister Eamon Ryan TD (pictured) said funding one infrastructure over another would send out the wrong signal to investors in other platforms.

Eircom has submitted a proposal entitled ‘Fibre Ireland’ to the Irish Government in which it proposes to deploy 25Mbps broadband to over 70pc of the country and using other technologies cover a further 20pc.

The plan would require an investment of over €500m, out of which Eircom requests that the Government subsidise it to the tune of €150m.

However, in a briefing with journalists yesterday ahead of last night’s TIF industry ball, Minister Ryan said he would be telling the industry that the Government will not be investing in just one technology.

“We are going to be investing in competition. I would say that it is in each company’s interest to make investments to be sure they are not left behind and that they are providing services that businesses and consumers would use.”

He said the aim is to create a level investment climate in which telecom companies can invest. “It is up to the market to invest in technological solutions, not the Government.

“The Government will assist where the market cannot deliver services and will assist in whatever way possible to create a more open, accessible and flexible market.”

While he said the Government will not be subsidising Eircom’s Fibre Ireland plan, it is in the incumbent operator’s best interests to press ahead with the plan.

“We’re going to need Fibre Ireland and I would be very much encouraging and supporting the company to make the investment that is going to be needed.

“But I think the fact that other companies are similarly investing in new networks with high-speed potential in cable, wireless and mobile 3G would indicate to me that it would be a strong incentive for Eircom to make the investment to ensure it won’t lose out on the opportunities that are out there.”

He added that the Government doesn’t want to create uncertainty in the market where other players are making investment decisions “if they are going to be investing in the market and the Government support a particular technological solution”.

He pointed out that other companies are investing in next-generation networks (NGNs). “TIF has pointed out that its member companies are investing €700m in NGNs, UPC is investing substantially in new networks and mobile companies are spending on 3G and other wireless technologies.”

On the question of “stranded” state fibre assets owned by companies like Bord Gais and CIE that could be harnessed for greater broadband access in the regions, Ryan said the situation will be addressed in the forthcoming Government Next Generation Broadband Plan, which should be published in the coming weeks.

“Fibre is going to be vital, in fact we’re going to need more,” he said, adding that plans to use road networks and ducting will be included in the plan.

In terms of the Government’s National Broadband Strategy to provide a minimum level of broadband connectivity in areas currently not served, Ryan said a tender document is due to be signed by the end of June.

Reiterating his points he said: “Investment won’t be in one technological solution or on one network. We will invest where we have state assets in an open access network. We will invest to ensure that there isn’t a regional divide in the market leaving certain areas behind.

“In particular we will look at the State’s wireless spectrum assets and will invest in our own public services, health, education and government work so that they become drivers across the country for higher speeds of broadband,” Minister Ryan said.

When contacted a spokesman for Eircom declined to comment on the matter except to say that the incumbent operator will continue to roll out infrastructure where it is viable to do so.

By John Kennedy