The Department of Communications will today unveil details of the National Broadband Scheme which will seek tenders to bring broadband to the areas of the State where Eircom says it is uneconomical to offer service without Government subsidy.
The announcement comes the day after research from the communications regulator, ComReg, found that almost a quarter of Irish businesses still connect to the internet using narrowband technologies such as dial-up and ISDN. Of these businesses 47 per cent said broadband was not available in their area - a figure that remains unchanged since 2005.
Eircom has identified approximately 220 telephone exchanges, predominantly in rural areas, where it claims that, even if all customers connected to the exchange were to avail of broadband, it would be unable to cover the costs of upgrading them.
The Department of Communications will now carry out a tender for private sector companies to provide services in those areas which cover about 10 per cent of the population.
An Eircom spokesperson yesterday confirmed that it intended to tender for the scheme even though full details of how it will operate are not yet available. It is expected that the department will today seek feedback from Eircom and other operators before finalising the exact tendering scope and process.
Telecom industry sources are concerned that the tender will not specify a maximum price and a minimum speed of service that has to be supplied.
Under a similar scheme, BT has offered 100 per cent broadband coverage in Northern Ireland since January 2006. The Northern Ireland Executive subsidised roll-out to every home and business to the tune of just under £10 million (€14.7 million). The tender did not specify the use of any particular technology and BT retains ownership of all the infrastructure.
It is understood that the National Broadband Scheme will have a similar structure. Operators will be free to offer broadband using satellite, wireless or other technologies. This opens up the possibility of bids from mobile operators O2, Vodafone and 3, as well as more traditional providers such as BT, Irish Broadband and Digiweb.
Minister for Communications, Noel Dempsey set a target of 700,000 broadband users by the end of this year. Currently, the figure stands at over 516,000 and Eircom alone claims to be adding 4,500 customers a week.
