Telecoms companies have committed themselves to investing £60 million (€76 million) in the next key phase of the State's hi-tech infrastructure - within five weeks of being asked to fund the project. By last Friday's deadline, nearly half of the 45 licensed telecoms operators in Ireland are understood to have applied to buy high-speed fibre capacity from the Government.
This follows last month's Government agreement to purchase up to £60 million (€76 million) worth of broadband fibre from international carrier, Global Crossing, over the next three years. The move was designed to encourage private sector investment in high speed telecommunications between Ireland and Europe, and Ireland and the US.
The operators likely to have applied for most bandwidth include Telecom Eireann, Esat Telecom, MCI/Worldcom, NTL Cabletel and GTS Ireland.
Each applicant was required to buy a minimum level of capacity worth £5 million (€6.3 million), and paid a fee of £50,000 (€63,486) to enter the pre-qualification process. The Department of Public Enterprise says this will cover administrative costs and will be refunded to those who fail to qualify.
The pre-qualification process selects applicants deemed eligible to participate in the deal, the aim being to transfer to the private sector as many of the Government rights secured in the Global Crossing agreement as possible.
At the time the deal was announced, the Government agreed to underwrite it with a down payment of £5.5 million (€7 million) which could be expanded to £12 million (€15.2 million) depending on take-up by the private sector.
It now seems likely the Government will be able to exit the process sooner than expected, although it is possible it will retain its initial £5.5 million (€7 million) investment until it is satisfied high speed telecommunications are available to all citizens at an affordable price.
The cost of purchasing the additional capacity will be approximately the same as the Government's cost of obtaining that capacity from Global Crossing.
Over the next two weeks the pre-qualification applications will be reviewed, after which a series of briefing sessions will be given to successful participants. They will be invited to submit tenders mid-September, and final allocations will take place in October.
Global Crossing intends to link Irish businesses and Internet users to the rest of the world through a large under-sea fibre-optic cable system. Its AC1 and AC2 pipes, connecting to the US and Europe, meet at Land's End, Cornwall.
From there, they will connect to two Irish "tele-hotels" which will act as central points for private telecommunications operators to extend their own networks throughout the State. The first tele-hotel will be located at Citywest, and the second is likely to be situated at East Point Business Park in Dublin.
The Global Crossing deal with Government marks one of the first examples of a public private partnership approach to infrastructure investment. The success of the arrangement centres largely on interest from, and investment by the private sector in the early stages.
