31 Jan 2018 | 05.15 pm
Eir Withdraws From National Broadband Plan
Enet is only bidder left
31 Jan 2018 | 05.15 pm
Eir has decided to withdraw as one of the bidders from the National Broadband Plan (NBP) tender process, leaving just one bidder, Enet, for the nationwide infrastructure project.
Eir’s decision to walk away follows the purchase of the business by French telco tycoon Xavier Niel. Though that deal awaits regulatory clearance, Niel is believed to have made clear to Eir management that he wasn’t interested in NBP participation.
The NBP process was started by Labour Party minister Pat Rabbitte in 2012. Labour TD Seán Sherlock described the handling of the tendering process by current communications minister Denis Naughten (pictured) as incompetent.
“It leaves the government with no competition on price and will likely lead to further delays for those waiting for broadband,” said Sherlock. “Eir’s withdrawal has plunged the tendering process into crisis. Only one provider is now left in the tender process.
“The minister in charge has managed to turn what had been a solid process into a mess, all in the space of less than two years. The minister’s decision in April 2017 to sign a deal with Eir to fast-track 300,000 homes that were originally to be part of the plan fatally undermined the process.
“Siro, a joint venture between the ESB and Vodafone, then withdrew from the tendering process in September 2017 stating there was no longer a business case for continued participation. It would now appear that Eir has pulled out having secured its dominant position.
“The minister has facilitated a market grab by the largest player in the field. Through the delays in delivering the plan, Eir has been able to build an even more dominant position and undermine the prospect of a credible plan. The process over the last two years has driven credible providers from the market.”
Complexity And Uncertainty
Naughten said that in recent weeks Eir and Enet received comprehensive feedback on their tender submissions from the National Broadband Procurement Team outlining where improvements could be achieved and where concerns were identified. Today (January 31) was the last day that bidders could raise any outstanding items to be addressed in the draft NBP contract.
“My department had informed bidders that they intended to issue an invitation to submit final tenders in the coming weeks once these amendments were finalised and agreed. This would signal that the process had moved towards the final stage,” the minister stated. “The NBP procurement process was launched in December 2015 and Eir actively engaged with the process since then. The company invested significant time and resources to the process, and their withdrawal at this late stage is regrettable.”
Naughten added that when the procurement process reaches a satisfactory conclusion for government, a contract will be awarded.
In a statement, Eir explained the company’s decision. “Based upon the significant commercial issues and complexity within the tender process, together with growing uncertainty on a range of regulatory and pricing issues that reside outside of the NBP process, the company’s board has decided that the risks are too great for its continued participation in the NBP. The company remains committed to working with key stakeholders to ensure that high speed broadband is available to all corners of the country.”
Enet, the sole remaining NBP bidder, is a consortium made up of Enet, a wholesale-only carrier, energy utility SSE plc and John Laing Group plc. Chairman David McCourt commented: “We recognise that this procurement is long and complicated but we look forward to our continued engagement with the department on the remainder of the process.”
The NBP has the stated objective of delivering a 30MB broadband service to an estimated 542,000 premises in parts of Ireland that commercial operators have bypassed for economic reasons.
Labour’s Sean Sherlock noted that the latest development in the long-running NBP saga leaves over 500,000 homes and businesses with no prospect of viable connectivity in the years to come. “It will be 2023 before many see any connection, if at all, should the current process manage to falter on,” he added.