Low rural broadband take-up rate alarms Government

Just one in seven homes in rural Ireland so far offered high-speed broadband by Eir have taken it up, which has raised serious fears in the Government about the viability of its own plans to connect half-a-million isolated homes.

Eir is rolling out broadband to 300,000 homes in better-populated rural areas. Earlier this year, it abandoned a plan to connect 500,000 more isolated homes under the State-backed National Broadband Plan.

The company no longer reveals how many households have signed up, but figures obtained by The Irish Times shows that just 28,000 of the 200,000 homes offered connections up to early this year had taken up subscriptions.

The proportion has not changed since, sources indicated, though rural broadband campaigners say that not all houses can receive Eir’s broadband services when the fibre-optic cables are first laid.

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The low take-up of rural broadband connections has alarmed the Government which is currently considering the future of its plan to spend billions making a high-speed broadband connection available to every household in the State.

One senior figure described it as “a bridge to nowhere”.

While analysts expect the numbers taking up high-speed broadband connections to increase over time, there are growing fears in Government about spending vast sums of money on a network that only a minority of people may actually use.

Escalating costs

Eir’s 300,000 homes were thought to be in the most “commercial” parts of the State yet to be connected. Asked about the low take-up of services, one Government source replied: “That doesn’t sound very commercial to me”.

The Government’s National Broadband Plan was originally due to cost the State about €500 million. However, The Irish Times reported last week that the estimated costs have escalated to an estimated €3 billion – six times the previous estimate.

Only one bidder, Enet, remains in the process after several other consortiums – including Eir and another which included the ESB – withdrew.

However, the process was paused after minister for communications Denis Naughten resigned three weeks ago after it was revealed that he had had several private meetings with the leader of the remaining bidder, US businessman David McCourt.

Details of the bidding process were passed to consultant Peter Smyth who is conducting an audit to ascertain whether the process has been fatally undermined and will have to be abandoned.

Abandoning process

Taoiseach Leo Varadkar and Mr Naughten's replacement, Richard Bruton, said that Mr Smyth's review would take three weeks, but it has not yet been concluded. It is expected to be finished "within a week or so", according to a person with knowledge of the matter.

Some senior figures in Government believe that the audit should and will lead to the current process being abandoned and a new broadband plan drawn up.

However, there is a realisation that even a new process will involve enormous investment by the State, and Ministers fear the political fallout from abandoning the broadband plan completely.

Although Mr Bruton said last weekend that there is “no question of a plan B”, The Irish Times understands that senior officials have discussed the possibility of an alternative approach, known in senior circles as “Plan B”, which may involve an existing State utility company, such as the ESB, being asked to build out the network.