The scope of the Government’s rural broadband scheme will be revealed to the three shortlisted bidders in February, according to sources.

At issue is whether the Department of Communications removes 300,000 homes, which telecoms firm Eir has pledged to connect as part of its commercial rollout, from the proposed intervention area.

Such a move could significantly reduce the cost to the State but potentially alienate other bidders who require a certain number of homes to make the investment viable.

Despite Eir’s promise, Minister for Communications Denis Naughten recently extended the National Broadband Plan (NBP) to cover 927,000 homes on the back of what he described as promised investment from private operators that failed to materialise.

Eir said it is on schedule to connect the proposed 300,000 premises to its new fibre product by the end of 2018, two years ahead of schedule and in advance of the NBP.

“Eir is investing €200 million in what is one of the most significant infrastructure projects in Ireland and will see us replace existing copper wires with fibre cables along 23,000km of Irish roads,” a spokesman said.

Under EU state aid rules, the Government cannot subsidise an intervention if a private operator is willing to supply the same area on a commercial basis.

Last-minute changes

The Department of Communications has indicated all along that it retains the right to change the State’s intervention footprint up until the last minute to reflect the business plans of operators.

“It is the department’s intention to finalise the high-speed broadband map in the new year,” a spokeswoman said.

“At this point, the final intervention area will be established for the purposes of the procurement process, which is ongoing,” she said.

The final intervention number will be key to the success of the project, which promises to bridge the so-called digital divide between urban and rural areas, which many believe is fuelling a two-tier economy.

The department is hoping to be in a position to invite final bids from the three shortlisted bidders – Eir, Siro and Enet – in the middle of next year with contracts awarded and work commencing at the beginning of 2018.

If the number of homes and premises involved remains above 900,000, the capital cost of the scheme is expected to exceed €1 billion.

The Government will subsidise the construction of two regional networks to be operated by one or two of the three operators.

It has also opted to privatise the networks on the grounds it would reduce the cost to the State by up to 70 per cent.

Mr Naughten has previously stated that the alternative would have required an additional €500-€600 million in capital spending.