Broadband plan: ‘it's bad value for money'

May 13th, 2019 7:05 AM

By Emma Connolly

Jane and Brendan Hurley of Digital Forge.

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A WEST Cork broadband provider has described as ‘scandalous’ the projected €3bn to deliver the long-awaited and controversial National Broadband Plan (NBP), saying it doesn’t represent value for money.

Brendan Hurley of Schull-based Digitalforge said the cost to Eir to install FTTH (Fibre to the Home) to 300,000 households has been €1,100 per household. 

‘This is a proven business model, but the current scheme of €3bn works out at about €5,500 per household – around five times the cost,’ he said. 

Brendan said: ‘The government need to go back and do their sums on this.’

He was speaking after the government this week approved a consortium led by Granahan McCourt Capital to deliver broadband to remote areas, after all other bidders withdrew at various stages.  

The largest share of the €3bn is coming to Cork, where many West Cork households and businesses have experienced poor or non-existent broadband for years – in particular sections of Beara, in Coomhola near Bantry, and on parts of remote peninsulas. 

Excluding VAT and a ‘contingency investment’, Cork’s broadband will cost €290m, with Galway in second place, costing €152m.

From a technological perspective, the NBP is achievable, Brendan said, but from a cost and functionality perspective, he said, ‘something is very wrong.’

He continued: ‘Where is the cost benefit analysis done on this? For example, for €5,500, how much more money can they say a business would make with this broadband to justify the infrastructure?’

He said for €3bn his firm could cover Ireland’s footprint 1,000 times over. 

He insisted he was speaking from a basis of hard fact, and not out of fear for his own business, which he has been running for 15 years. 

He also questioned the timing of the announcement, given that we’re just two weeks out from local elections. 

Brendan’s comments echo warnings by the secretary general at the Department of Public Expenditure who said the ‘plan posed great financial risks and only questionable benefits.’

Before the government approved the contract this week, Robert Watt strongly recommended against it, on affordability, risk and value for money grounds. He pointed to ‘excessive risks with questionable benefits.’

Other criticisms have related to the fact that the government, who initially put the cost to the State at €500m, will not own the infrastructure, despite the massive taxpayer funding.

The ESB/Vodafone joint venture Siro which, in 2016, linked Skibbereen to its 100% Fibre-to-the-Building (FTTB) broadband network, withdrew from the tendering process and said they ‘cannot develop a competitive business case to justify continued participation.’

The government claims the first connections will be made later this year, with the project set for completion in 2026. 

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