Business telecoms firm Magnet Business has called the current price of broadband in the regions a "rip-off" and said the high costs are affecting the ability to attract foreign direct investment to regions other than Dublin.
"There are a number of good reasons why a business should locate outside of Dublin, but one of the big drawbacks is the high cost of telecoms backhaul to Dublin and onwards to international markets," says Donal Hanrahan, director of business services with Magnet Business.
"With an increasing number of global companies coming from internet-related industries, this could become an increasingly significant barrier to companies setting up in the regions."
Availing of ESB Telecom's links back to Dublin, the Government-funded Metropolitan Area Networks (MANs) and the transatlantic-cable owned by Magnet sister company Hibernia Atlantic, it has introduced an international connectivity service for companies in Limerick, Cork, Galway, Waterford and Portlaoise. Mr Hanrahan said the new service would cut the cost of broadband for firms in the regions by between 30-60 per cent.
"A two-megabit broadband connection between the regions and Dublin typically costs €30,000-€40,000 per annum," said Mr Hanrahan. "We will now be able to get you to New York for that."
Mr Hanrahan said the company would also be able to provide the high-capacity circuits required by multinationals that may want to locate R&D and similar activities in Ireland. Magnet will also target indigenous companies who trade online.
A recent survey commissioned by O2 found that 52 per cent of businesses in Dublin have broadband, compared with 26 per cent in the rest of Leinster, 29 per cent in Munster and 20 per cent in Connacht/Ulster. This illustrates the so-called digital divide, with firms outside Dublin paying significantly more for broadband if such servicesare available.
Mr Hanrahan's comments were backed up by John Clancy, consultant head of ICT strategy with the €200 million WestPark business campus in Shannon. Mr Clancy conducted extensive research on the cost of broadband in the mid-west last year and found that in some cases, firms were paying five times as much as those in Dublin.
WestPark has invested significantly in bringing the ESB Telecom network to the campus and providing a data centre for telcos to locate their equipment in. Mr Clancy said the availability of cost-effective broadband was essential to attracting large firms.
