ComReg could put a dampener on Eir’s profits from the National Broadband Plan

Irish operator Eir has previously been forecast to make €1 billion from its ongoing role in supporting the country’s National Broadband Plan (NBP) through leasing equipment to contract-winner National Broadband Ireland (NBI). 

 

However, this could all be about to change, as the EU pushes Irish regulator ComReg to slash the rates that Eir can charge other operators. ComReg has stated that it will review the weighted average cost of capital rate, considering reducing it from 8.18% to 5.61%. If so, this will lose Eir at least €125 million in leasing poles alone, not including additional revenue loss from other infrastructure that it rents. 

 

Such a decision by the regulator would likely be met with applause from rival operators, who have claimed that Eir has enjoyed exorbitant profits from its leasing strategy. Eir, meanwhile, argues that its wholesale prices are fair, having been previously given the okay by the regulator.

 

For the NBP itself, leasing infrastructure from Eir represents around a third of the project’s budget. As a result, these regulatory changes could save the Irish government a significant fee.

 

The €3 billion NPB contract was signed in November last year and plans to deliver broadband to around 540,000 homes. Back in April, NBI said that the company was still “very much committed” to the ongoing rollout of the NPB, in spite of the ongoing COVID-19 crisis. Just last month, NBI announced Nokia as their key supplier for the upcoming rollout.