Eircom has failed to win a single State broadband contract to supply internet connectivity to 4,200 schools in the Republic in a recent tender for suppliers. The contracts are worth up to €20 million over three years.
The firm has been outbid by several rival companies, which will use a selection of fixed, wireless and satellite technologies to deliver broadband to both primary and secondary schools.
Eircom, which bid for a wide range of the connectivity deals, has only secured a contract to provide and manage "routers" - special computer systems that link together to offer broadband internet access - at the schools.
This deal is estimated to be worth just €2 million, a fraction of the €20 million value of the total schools broadband project over three years. It is also a much lower-margin business than the broadband connectivity contracts offered in the State deal.
Eircom's failure to secure any of the connectivity deals in the schools project is a wake-up call for the company, which is likely to face a similar State tender worth about €130 million in May.
The Department of Finance is expected to put out to tender the Government's VPN contract, a controversial deal which contracts Eircom as the State's sole supplier of fixed line telecoms services. This deal is worth up to €130 million per year to Eircom, and its loss would be a major blow to the incumbent operator.
The Irish Times has learned that the Government sent letters to the successful firms in the schools project yesterday confirming which contracts they had secured from the tender process.
Successful bidders include the wireless firm Irish Broadband, and Esat BT, although the State's second-biggest fixed-line firm did not do as well as expected.
Eircom said last night that it had not been informed about the broadband connectivity deals, but confirmed that it had been awarded the router contract.
Firms that have been awarded connectivity contracts will be encouraged to build broadband infrastructure in an effort to promote competition in the sector.
Eircom's failure to land one of the lucrative connectivity deals is particularly ironic, given that the firm is providing up to €3 million funding for the project.
This donation was part of a total industry commitment to the schools broadband project from the likes of Esat BT, Vodafone and O2, worth €18 million. The Government made up the €2 million shortfall.
The broadband contracts decided by the Government will enable schools to offer videoconferencing, email and a range of other Web services to pupils.
HEAnet, the State's existing educa tion and research network, will manage a central broadband network on behalf of the Government.
