Telecommunications companies Esat and NTL have declined to buy high-speed Internet capacity on a multi-million-pound flagship fibre-optic cable project that will link the Republic directly with the US and Europe.
Eight companies are understood to have agreed to buy capacity on the transatlantic cable provided by international telecoms company Global Crossing with part funding of £60 million by the State. These include Eircom, MCI/Worldcom, Formus, and Irish Multichannel.
Broadband allows for very high speed transmission of digital data such as video, text, sound files and pictures. The cable will place the Republic directly on the Internet backbone and connect to the US and to 24 cities on Global Crossing's European network. According to the Government, the project will enhance the Republic's existing broadband Internet capacity by 15 times, while reducing costs to 10 per cent of current prices. Ireland will then control nearly a fourth of all bandwidth in the EU.
In an unusual arrangement, the Government brokered the cable deal and also bought initial capacity on the transatlantic cable, which it is offering to Irish telecom companies at just above the wholesale cost. This means carriers can buy bandwidth at exceedingly low prices of at least a fourth the current retail price. Analysts and industry experts expressed surprise yesterday that Esat would not purchase any capacity.
The Government offered carriers who wished to buy capacity a bundle of 12 lines for £5 million - eight connecting to Global Crossing's 24-city European network via Britain, and four to the US. Yesterday, a single line between European cities was priced at $1.7 million on the website for Band-X, a company that auctions extra capacity.
The company already has two fibre cables running to Britain as well as an earlier joint venture project with Global Crossing in Britain for European access. In addition, he said the BT network in Europe could handle additional needs. But the company was interested in further bandwidth directly to the US, which Mr Ralph acknowledged was "a hole" in its existing Irish network.
One possible source could be the Network360 cable, another transatlantic fibre project that is expected to be operative by next spring. Esat founder and chairman Mr Denis O'Brien is a board member of Network360. Mr Ralph also said the "door was not fully closed" on the Global Crossing project. Esat is already supplying the fibre link between the cable and Dublin, as well as some of the regional network for the project.
