The State gas company, Bord Gáis, has hired consultants PricewaterhouseCoopers (PwC) to study whether it should sell off its telecoms division, Aurora Telecom, writes Jamie Smyth
Aurora Telecom leases a fibre optic network that runs along its gas pipes in Dublin to a range of firms such as Energis, Broighter Networks and Smart Telecom.
The firm owns a fibre optic network which connects central Dublin with business parks situated close to the M50 motorway and is valued at €7.6 million.
The appointment of PwC follows the resignation of Aurora Telecom's general manager, Mr Donal Hanrahan, late last year. Mr Hanrahan made an offer to lease the telecoms assets of Bord Gáis as part of a new venture he planned to set up to develop the business.
Bord Gáis rejected the offer, at least until a strategic review of Aurora Telecom is completed.
It is understood that a rival telecoms company, Smart Telecom, has also indicated that it is interested in purchasing Aurora Telecom from Bord Gáis to extend its own network.
One of the biggest issues that Bord Gáis faces is whether or not it should invest further in Aurora Telecom and extend its network throughout the State.
The firm is currently building a gas pipeline between Dublin and the west, which will pass through a number of towns that are not connected to a rival broadband network owned by the ESB.
The cost of building a fibre network along this pipeline is estimated to be approximately €5 million, although extra investment would be required in Aurora Telecom to build up the business further.
In July 2003, Bord Gáis issued a tender for the supply of 600 kilometres of fibre optic cabling for the east-west pipeline and a new pipeline to Northern Ireland. However, it has not awarded a contract for the pipeline project, which has been put on hold until the current review is completed.
Bord Gáis and the consultants from PwC are studying whether it is feasible to sell off the fibre network, which runs alongside the gas network. There may be safety issues associated with enabling access to Bord Gáis's fibre network, given its close proximity to gas pipes.
One potential solution for Bord Gáis would be to lease the fibre network to a third party for a number of years but retain ownership and responsibility for providing access to the gas pipes and fibre.
However, as yet, Bord Gáis management has made no final decision on the future of Aurora Telecom.
A Bord Gáis spokeswoman confirmed yesterday that it was currently assessing its options in the telecoms market with the assistance of PwC.
But she said that it would be too early to speculate on any particular options at this stage.
Aurora Telecom could be a perfect partner for eNet, the private firm that manages the State's fibre networks around towns in the regions. These networks are made available to other telecoms firms on an open-access basis, in the same way that Aurora makes its network available to companies.
The results of the review are expected within a few months.
