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Irish government appoints preferred bidder for National Broadband Plan

9 May 2019

Ireland’s Department of Communications, Climate Action and Environment (DCCAE) has announced its approval for the appointment of a preferred bidder for the country’s National Broadband Plan (NBP). National Broadband Ireland (NBI), a new Irish registered company incorporated by private investment firm Granahan McCourt, will build, operate and maintain the new network that will bring faster broadband speeds to 1.1 million people and cover around 540,000 premises, including 100,000 businesses and farms, and more than 600 schools, where commercial operators will not commit to deliver high speed connectivity.

With the DCCAE claiming the final bid provides for ‘a reliable, very high-specification broadband supply in line with urban and international trends’, it noted that 98% of premises to be covered will gain access to downlink rates of up to 150Mbps, rising to 300Mbps by year six of the network rollout, and 500Mbps in the tenth year for residential users, while ‘much higher speeds’ will be offered to businesses, reaching 2Gbps by year eleven and rising ‘incrementally beyond that’.

Deployment of the network is expected to get underway in Q4 2019, with ‘significant pre-mobilisation activities’ ongoing over the next few months. In terms of the infrastructure itself, newcomer NBI’s network will involve: more than 1.5 million poles; more than 15,000km of underground ducts; and up to 146,000km of new fibre cable. Wherever possible, the network infrastructure will reportedly comprise the re-use of existing poles and ducts, which NBI will lease from existing infrastructure owners, with the DCCAE suggesting that infrastructure re-use ensures compliance with State Aid guidelines, environmental sustainability best practice, and importantly, minimises costs. Further, the DCCAE said that nearly 300 broadband connection points (BCPs) will be provided in year one, acting as hotspots providing free Wi-Fi in local communities supporting digital work hubs in every county. The provision of the fibre network will take place in conjunction with these BCPs, with 120,000 premises covered by year two, and between 70,000 and 100,000 being covered each year thereafter.

In terms of investment, the DCCAE noted that it has determined that its maximum possible cost to state will be EUR3 billion (USD3.36 billion) over 25 years; this figure includes EUR545 million for conditional and contingent subsidy and EUR354 million in VAT, which will be paid to the Revenue Commissioners as subsidies are spent. However, it confirmed that subsidies will not be paid to NBI until certain milestones have been achieved and there are reportedly a comprehensive set of protections and legally binding obligations set out in the contract between the state and NBI which include ‘a suite of key performance indicators to ensure the service is maintained appropriately’.

Finally, with regards to the next steps, the DCCAE said that, following confirmation of State Aid Approval by the European Commission and contract closing requirements, NBI will formally be awarded the contract for the NBP.

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