The contract to build the network out to 750,000 rural homes and businesses could be worth upwards of €500m of State funding.

Tens of thousands of homes and businesses have been told that they must wait longer for adequate broadband as the Government confirmed a delay in the State-subsidised National Broadband Plan.

A spokeswoman for the Department of Communications said that the scheme, which has pledged modern fibre broadband to 750,000 non-urban homes and businesses by 2020, will not roll out this year as planned. The Government has postponed negotiations with bidders such as Eir and Vodafone, the spokeswoman said, saying it hopes to resume the process later this year.

The setback means that completion of the rollout plan may not happen until 2022 or later - two years after the Government's promised delivery date and 10 years after the scheme was first launched.

The spokesman said negotiations with bidders were postponed because of planning and procedural issues. She said that the lack of a new Government minister in place has had "no effect" on the process.

"This is a complicated process," said the spokeswoman. "It requires detailed planning to ensure delivery of the State intervention in a manner that meets all of the objectives set out in the intervention strategy.

"The contract will be for a 25-year term - it's important that we get this right in terms of deployment of the network, technical specifications, future-proofing and value for money for the State."

She added: "Based on our extensive procurement planning, the granting of an earlier industry request for an extension to the PQQ [Pre-Qualification Questionnaire] submission deadline and the number of responses received, it is envisaged that the department will not be in a position to award a contract until 2017."

The news will be greeted with dismay by over a million people living outside cities and large towns in Ireland. With the process expected to take up to five years, the setback means that many rural homes are set to be left without adequate broadband for at least another three years, possibly stretching to six years.

It may also enrage Independent rural TDs, who are understood to have raised the lack of broadband infrastructure in Government formation discussions with Fine Gael and Fianna Fáil.

The contract to build the network out to 750,000 rural homes and businesses could be worth upwards of €500m of State funding, with the Government seeking an unspecified amount of matching investment from winning contract bidders.

Ten telecoms companies had expressed an interest in discussing the National Broadband Plan rollout with the government. Eir and Siro, the joint fibre venture between Vodafone and the ESB, are considered to be the frontrunners.

Enet, the company that manages metropolitan area networks in 94 towns around the country, has also indicated that it intends to compete for the State broadband tender.

Irish Independent