THE GOVERNMENT will not provide Eircom with €150 million funding to support the former State telecoms operator's broadband roll-out.
Speaking at a telecoms industry event in Dublin last night, Minister for Communications Eamon Ryan said it was not in the Government's interest to back any one technology or service provider.
"Providing money to Eircom is not the direction we should be investing public money in," Mr Ryan said.
Eircom presented a proposal to the Government entitled "Fibre Ireland" which would provide 25Mbit/sec broadband to 70 per cent of the population.
An additional 20 per cent would be able to access broadband services at speeds of up to 12Mbit/sec, while the last 10 per cent would be covered by the National Broadband Scheme.
The plan would require an investment of €500 million. Eircom proposed that it would provide €350 million to fund the project, with the Government providing the balance. Eircom is not understood to have been looking for a straight cash investment.
"Eircom's proposal presented an opportunity to transform and revolutionise Ireland's telecommunications infrastructure in a short period of time," the company said in a statement last night.
"However, today's decision by the Minister indicates that Government is satisfied with gradual development of high-speed service over a period of 10 to 15 years."
Eircom also said there had been no detailed discussions with the Government on the proposal.
Executives expected that there would be no decision on its proposal in advance of the publication of a Government paper on next-generation broadband. That paper was initially due to be published in March, and is now expected to be published in the coming weeks.
"Engagement would have illustrated the advantages of Eircom constructing an open-access fibre-based national high-speed broadband network available to all other operators at regulated prices," Eircom claimed in its statement.
The news is a further blow for Eircom coming just a day after regulator ComReg cut the return on capital it is allowed make on its regulated fixed-line business.
Mr Ryan said the Government would only invest in the telecoms market in specific circumstances. These included situations where there was a "regional divide" and the market was not going to provide services in certain areas.
The assembled telecoms executives heard that Mr Ryan wanted to support the creation of open-access networks where all operators were able to provide services.
The next-generation broadband strategy paper that the Department of Communications is expected to publish in the coming weeks will go into detail about how it intends to use State-owned telecoms assets to support its strategy.
The Minister also rejected suggestions that higher-speed broadband would not now be rolled out to large parts of the country.
"Other companies will be investing in networks that have high-speed potential. Opting out of the race is not a viable commercial decision."
