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Biggest investment in Rural Ireland since Electrification as Preferred Bidder appointed to National Broadband Plan

 

Transformational scheme brings high-speed broadband to 1.1M people - every home, business and farm

 

Rural Ireland will have same opportunities as urban areas

 

7th May 2019

 

Every home, farm, school and business in Ireland will have access to high speed broadband – no matter where they are located – as the Government has approved the appointment of a preferred bidder to the National Broadband Plan.

 

Ireland becomes one of the first countries in the world to ensure that those in rural areas have the same digital opportunities as those in urban areas. 

 

An Taoiseach, Leo Varadkar said:

"As Taoiseach, it's my job to imagine the future and think about what it's going to look like. When I do that, I think of things like homeworking. Already some multi-nationals employ a quarter of their staff from home. They require high-speed broadband and secure connections. At the moment, many people living in Rural Ireland are excluded. I have seen students in small rural and island schools being able to study subjects like physics by video-link to a larger school. This will be even more common in the future. As a doctor, I am fascinated by technological developments in healthcare. Remote medicine is emerging all over the world. Access to broadband affects many parts of Ireland, and it requires a national solution. So that we can connect with the world, with family members, with businesses, with new ideas and new ways of doing things."

 

The Minister for Communications, Climate Action and Environment Richard Bruton T.D. said,

"This investment will have a transformative effect on rural Ireland, future-proofing communities for generations to come. Digital technology is revolutionising how we live, learn and work and we want to make sure rural Ireland is not left behind.

Today's announcement ensures that the State makes a significant investment in broadband in the coming years. The state has invested just €400m in broadband from 2002-2016. In the period 2002-2021, €36.9 Billion will have been invested in Roads and €10.8 in water infrastructure."

 

National Broadband Ireland will supply broadband to the one quarter of Irish people and premises which currently cannot access high-speed broadband through commercial services. It guarantees a level playing field for 1.1 million people, 540,000 premises including 100,000 businesses and farms, and over 600 schools, where commercial operators will not commit to deliver high speed broadband.

 

Those 1.1 million people in rural Ireland will get the same opportunities as urban Ireland and will be able to avail of the range of new opportunities that high speed broadband has and will deliver. Without it, they won't have guaranteed access to these opportunities. It opens up:

  • Flexible and remote working
  • Smart health with online GP and nursing services and medical monitoring
  • Cloud based services and connected devices
  • Smart farming opportunities
  • Digital learning
  • Reliable electronic payments and bookings

 

The government will provide additional capital from 2021 from future revenues. No projects will be delayed or no changes will be made to the National Development Plan as a consequence of this decision. 
 

What it means

The final bid provides for a reliable, very high-specification broadband supply in line with urban and international trends. This will provide fibre to 98% of all premises with speeds starting from 150mb/s, rising to 500mb/s in year ten for residential users and much higher speeds available for business.

 

Deployment of the network will commence immediately once contracts are signed. Over 90% of premises in the State will have access to high speed broadband within the next four years.

 

Nearly 300 broadband connection points (BCPs) will be provided in Year 1, 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 2, and 70,000-100,000 premises each year thereafter. 

 

The Team

The Bidder has put together a team with significant Irish experience in large telecoms projects, as well as substantial international, industry experience  to deliver the proposal. Collectively the team has: 

  • built 16 greenfield telecom operating companies
  • rolled out 24 national telecommunications networks
  • managed or delivered €40 billion in contract/business value

 

As required under law, Granahan McCourt has incorporated a new Irish registered company to be known as National Broadband Ireland (NBI) to build, operate and maintain the network.

 

Investment by the State

The procurement process was designed to determine what the total cost to the State would be of delivering high speed broadband to approximately 540,000 premises in advance of the Government making a final decision to proceed, or not, and before any contract was signed.

 

That procurement process has been concluded, and it has now been determined that the maximum possible cost to the state will be €3 Billion over 25 years. This includes €545m for conditional and contingent subsidy and includes €354m in VAT, which will be paid to the Revenue Commissioners as subsidy is spent. Subsidy will not be paid to the NBP company until the milestones have been achieved and there are a comprehensive set of protections and legally binding obligations set out in the Contract which include a suite of key performance indicators to ensure the service is maintained appropriately.

 

The initial connection charge and the monthly charges from service providers to the individual living in rural Ireland will be similar to those paid by residents in urban areas with the ability to avail of services such as voice, broadband, TV from the same service provider.

 

Next steps

Following confirmation of State Aid Approval by the European Commission and contract closing requirements, the Bidder will be awarded the contract for the National Broadband Plan. NBI will maximise the use of existing eir pole and duct infrastructure and will be supported by a number of large  internationally experienced subcontractors including KN Group, the Kelly Group, eNet, Actavo, Nokia and many more local small and medium businesses in the telecom sector.

 

Notes to editor

 

The Solution

The appointed Bidder's solution is to set up a wholesale open access company dedicated to the rollout of a predominantly fibre to the premises (FTTP) network in the Intervention Area, which will be capable of delivering a future-proofed high speed broadband network, initially providing services of 150Mbps to the majority of homes and up to 1Gbps to heavy data users and Small and Medium size Enterprises.

 

The Technology

As required by the State Aid Guidelines for Broadband, the NBP procurement process adopted a technology neutral approach, i.e., it did not specify a fixed or wireless preference to address any market failure identified.

 

However, all three bidders proposed FTTP (Fibre To The Premises) based proposals, enabling them to meet the 30Mbps minimum speed requirements, and ensuring that the network is future proofed against advances in technology.

 

A mobile 5G service is not a suitable alternative to fibre to the home broadband, for many reasons as outlined by Comreg and others. Mobile coverage of 30Mbps to 99.5% of the country would require an additional 6,000 new masts around the country (double what we have now), would take over 10 years, would have insufficient capacity and signal would be significantly affected by home insulation, hills etc.

 

Following media and political commentary, a report was prepared by Analysys Mason (5 December 2018) at the request of the Department which re-examined the most appropriate choice of technology for the NBP Intervention and whether 4G and 5G mobile or fixed wireless access would be a better choice than the Bidder's proposed solution based on fibre. 

 

The conclusions from that report were that FTTP remains the most appropriate approach for the NBP Intervention and that 5G Fixed Wireless Access (FWA) may be used in only very specific, targeted circumstances. In addition, in Analysys Mason's view, 4G and 5G networks cannot match the Bidder's proposed FTTP solution in all material respects: cost, quality of service, deliverability and future proofing.

 

The Alternatives

The government today also noted a number of alternative options which have been considered in recent months. From that work, it was clear that the analysis shows that all of the alternative options identified would take longer to reach 100% of the Intervention Area premises compared to the current plan (or in some cases 100% would never be achieved), may be more costly, in most cases would require a consultation on a new strategy as well as a new procurement process and State aid application, and may not provide the level of future proofing required under the Commission's strategy, Connectivity for a European Gigabit Society. The relevant  paper is available here.

 

Consideration was also given to mandating an existing State body, such as the ESB with this function. The clear advice from the Attorney General was that this would be counter to both procurement law and state aid law for this to be done outside of a new procurement process. This view has been supported in separate senior level discussions in late 2018 on the NBP between the Department of Communications and the European Commission.

 

Ownership

As much as possible of the network infrastructure will comprise the re-use of existing poles and ducts, which NBI will lease from existing infrastructure owners. Infrastructure re-use in this manner ensures the State complies with State Aid guidelines, environmental sustainability best practice, and minimises costs.

 

Ownership of any other network assets procured by NBI will reside with NBI. NBI will be required to manage these assets over the lifetime of the project, and will be liable for the associated costs where network assets are required to be maintained or replaced.

 

Governance

There are a comprehensive set of protections and legally binding obligations set out in the Contract which include:

  • A suite of key performance indicators to ensure the service is maintained appropriately
  • Significant penalties to address under performance
  • Substantial oversight arrangements to monitor progress, costs and take up etc.
  • Extensive monthly, quarterly and annually reporting requirements on NBPco
  • Significant checkpoint reviews at various stages in the project
  • Standalone Board responsible for the ringfenced operations and day to day management of NBPco with Board required to report to Minister monthly/quarterly and annually.
  • Ministerial appointee to the Board.
  • Independent audit of accounts
  • Charge over the assets of NBI for the duration of the Contract
  • Ability to "step-in" to manage and direct build and operations where there are material compliance issues.

 

Project Timeline:

The rollout will commence in Q4 2019 with significant pre-mobilisation activities on going over the next number of months. While the majority of premises will be passed in the initial 5 years the overall rollout will be concluded within 7 years.

 

Statistics:

NBP stats

  • Approximately 540,000 premises (plus new premises to be built)
  • 1.1 million people (23% population)
  • 56,000 farms (68% of national total of farms)
  • 44,000 non-farm businesses (mostly small and micro)
  • 674 schools

 

NBI's plan to deliver

  • Address 96% of land mass
  • Broadband to 23% of premises Nationally
  • Circa 540k premises
  • any new premises built in the intervention area are included approx. 30k

 

The NBI network will involve:

  • Over 1.5 million poles
  • Over 15,000 km underground ducts
  • Up to 146,000 km new fibre cable
  • Running along 100,000 km of the road network
  • 150Mbps broadband product available for consumers upgraded to 300Mbps by year 6 and 500Mbps by year 10
  • Up to 1Gbps products for businesses, also upgraded to 2 Gbps by year 11 and incrementally beyond that.
  • Primarily FTTH will be deployed, with 2% - 5% premises via a high standard wireless connection which will also be upgraded over time.

 

High Speed Broadband Map

County Coverage Statistics Q4 2018

 

 

County Name

 

Total  Number

of  Premises

 

AMBER

Premises

Intervention

Area

 

BLUE

Premises

Commercial

Operators

 

LIGHT BLUE

Premises

Planned Rural

Deployment*

Carlow

Carlow

27,9947,87518,052                  2,067
Cavan42,11016,99523,951                  1,164
Clare68,68923,35941,742                  3,588
Cork269,95274,820184,183               10,949
Donegal101,83034,10765,212                  2,511
Dublin604,41210,551593,585                     276
Galway135,11839,18588,483                  7,450
Kerry89,45828,70654,952                  5,800
Kildare92,23513,88577,589                     761
Kilkenny48,00117,99627,201                  2,804
Laois39,25312,77224,415                  2,066
Leitrim22,33811,2979,583                  1,458
Limerick97,56821,87867,821                  7,869
Longford22,3088,19312,401                  1,714
Louth61,0348,66051,993                     381
Mayo83,46536,84338,862                  7,760
Meath86,02120,25663,370                  2,395
Monaghan33,03515,73316,543                     759
Offaly36,96612,38722,485                  2,094
Roscommon39,08918,46917,618                  3,002
Sligo40,09214,31423,722                  2,056
Tipperary83,96330,25045,693                  8,020
Waterford61,62416,58943,646                  1,389
Westmeath44,39711,96330,891                  1,543
Wexford82,53521,76159,620                  1,154
Wicklow64,87614,43748,880                  1,559
Total

2,378,363

 

543,281

 

1,752,493

82,589

 

*These figures represent planned rural deployment and will reduce once premises are passed.

 

 

Investment by County – please note this does not include VAT & contingency

Investment by County

 

CountyInvestment by county - Years 1 to 25 (€millions)
CORK€290
GALWAY€152
MAYO€151
DONEGAL€141
KERRY€123
TIPPERARY€120
CLARE€99
LIMERICK€86
WEXFORD€81
ROSCOMMON€76
CAVAN€73
MEATH€70
KILKENNY€68
WATERFORD€63
MONAGHAN€61
SLIGO€59
WICKLOW€55
LEITRIM€51
KILDARE€51
OFFALY€50
WESTMEATH€49
LAOIS€49
LONGFORD€34
DUBLIN€31
LOUTH€30
CARLOW€29

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