State broadband scheme likely to cost more than €1bn

The National Broadband Plan is likely to cost more than the €1 billion previously signalled because of the high cost of connecting homes in rural parts of the State.

Industry sources say fibre broadband connections typically cost about €1,000 per premises in urban areas, but this can rise to €2,000 in rural areas, particularly if the sprawl is significant, which is the case in much of rural Ireland because of the incidence of one-off housing.

With 542,000 homes earmarked for the State-subsidised scheme, the cost of the project is expected to exceed €1 billion.

The size of the State subsidy, and by extension the cost to the taxpayer, is a matter for the Government's negotiations with the SSE-Enet consortium, the only bidder left in the process following Eir's unexpected withdrawal this week.

What went wrong with the rural broadband scheme?

---

National Broadband Plan in limbo as Eir pulls the plug

---

Have your say: How does poor broadband affect you?

---

EBay shifts its payments business from PayPal to Adyen

---

However, it is expected to be between 30 per cent and 50 per cent of the overall cost, which could be in the region of €500 million.

The Department of Communications declined to comment. A spokesman said: “The department is in an ongoing procurement process and it would be inappropriate to comment on the likely subsidy to be awarded.”

Tender process

The department’s tender process was rocked this week by the exit of Eir, which, as Ireland’s largest telco, had been favourite to win the contract. The company’s departure leaves the SSE-Enet consortium, comprising FTSE-listed energy firm SSE and telecoms firm Enet, in pole position. Provided the department and the company can agree a price and a operations model, the company is expected to be elevated to preferred bidder status in September with the project formally commencing some time in 2019.

Enet chief executive Conal Henry said the company was confident of delivering on time and within the cost expectations of stakeholders.

Deflecting suggestions that Enet was relatively small to be undertaking a project of this scale, he said the company had recently been joined in its bid by FTSE-listed SSE, which is Ireland’s second-largest energy utility, and the John Laing Group, a London-based infrastructure investor and manager.

This has provided Enet with the necessary financial clout and operational manpower to get this project across the line, he said.

The company – whose core business centres around the operation of the State's Metropolitan Area Networks (Mans), a series of telecommunications networks built around 94 towns – has a fledgling rural network that feeds fibre to around 1,000 homes, which Mr Henry refers to as a "proof of concept network".