Smart Telecom plans €34m investment

Smart Telecom plans to spend an initial €34 million on rolling out a new broadband service for residential customers, the company said yesterday.

The telecom company intends to provide the service via Government's broadband metropolitan area networks (MAN), which are being built to service the State's city's and towns. Broadband is essentially a digital telephone line that is faster and has more capacity for voice and data services than the standard lines.

The development of the service in the Republic has been slow and this has been singled out as a potential threat to industrial development and competitiveness. Smart Telecom is already providing the service to business customers.

The residential service will be carried from the main network "rings" to individual customers through Eircom exchanges. This will involve putting individual switches in its larger competitor's exchanges.

Announcing the plans yesterday, Smart Telecom executive Mr Garfield Connolly said the roll out of the service depended on the speed at which Smart gets access to Eircom's exchanges.

Smart Telecom intends rolling out the service across the State in four phases. Chief executive Mr Oisín Fanning said that it expected the first phase, covering the Dublin area, to be completed by June. The second phase will be Cork, Galway, Letterkenny, Limerick and Waterford.

The broadband roll out will be completed by a special purpose vehicle, a subsidiary established specifically for the purpose. This has raised £10 million (€14 million) in equity to date.

Mr Fanning said that it would have an additional €20 million fund available to it, which had been raised as debt from a number of financial institutions. This would bring the total start-up outlay to €34 million. The chief executive explained that the fund would be topped up as the company recruited customers to the service.

Smart intends offering a two megabyte service for a fixed monthly charge of €35. It said that this is half the price of the service offered by rivals, while the lines will have four times the capacity.