That is part of the reason we are here. Since 1993, Imagine has been an innovator and a strategic investor in the Irish and European fixed wireless and mobile telecoms markets. Internationally, Imagine is an industry-recognised and credited innovator in the use of 4G long-term evolution, LTE, advanced and 5G fixed broadband. That is a very important clarification. In 2016, we deployed a trial network of 54 sites providing high-speed broadband with speeds up to 70 Mbps to 20,000 customers across regional and rural areas of Ireland. This was the pilot trial of the commercial roll-out. In July 2017, we secured 5G spectrum for the provision of fixed broadband services in ComReg’s 3.6 GHz spectrum licence auction. In April 2018, we announced a strategic partnership with Brookfield, which is the world’s second largest asset management fund, with more than €310 billion of assets under active management, and the funding of the roll-out of high-speed broadband infrastructure across Ireland.
On 13 February 2019, we formally launched our plans to roll out a national 5G-ready fixed broadband network with the priority to deliver high-speed broadband to the underserved areas of regional and rural Ireland. With an initial project investment of more than €300 million, the initial roll-out will see 155 sites live by June 2019 and 325 sites live by June 2020. That is a rough estimate. Commercially, our objective is to be first to deliver 150 Mbps broadband to the majority of the 1.6 million homes and businesses in our licensed coverage area. Our current roll-out plans will initially cover 400,000 of the 540,000 premises where there is currently no planned commercial alternative. That is about 75% of that cohort. It would surpass this with regard to fibre.
It is important to make clear that while we have raised concerns about the NBP intervention strategy and process, Imagine continues to support fully the important objectives of the NBP. This is clearly demonstrated by our significant commercial investment in the market which will help deliver the NBP objectives, de-risk its execution and, most importantly, ensure the delivery of high-speed broadband to underserved rural areas as quickly as possible.
Internationally, with the inevitable cost and significant time needed to deliver services, major companies such as Google are abandoning previously planned fibre to the home, FTTH, roll-outs in favour of alternative wireless solutions that cost less and are faster to deploy. With the focus of current commercial investment and the intervention based solely on FTTH, users could be waiting for decent broadband for a great many years to come, not just in rural areas but throughout the country. Currently our 5G-ready technology can deliver 300 Mbps services, which far exceeds user demand. An industry roadmap shows service speeds will exceed 10 Gbps. In fact, the most recent numbers have increased to 20 Gbps. 5G fixed broadband has become a mainstream alternative to FTTH for the delivery of future-proofed next-generation high-speed broadband to homes and businesses. It is currently the primary business model and driver of commercial 5G infrastructure investment across the world.
We believe that in addition to delivering services in underserved areas, our investment will stimulate competition and investment across the market. However our primary concern is that the current intervention strategy, unless revised, will delay the roll-out of critical backhaul fibre infrastructure on a national basis. We have openly engaged with key stakeholders, Departments and elected representatives to outline our commercial plans and our view that the objectives of the NBP can best be achieved by a phased approach which prioritises State-subsidised investment in extending fibre backbone infrastructure into every region in Ireland. That is the alternative to extending to every home as work goes along. This approach would mean getting fibre to every part of Ireland first.
This approach would ensure the availability of critical fibre backbone infrastructure to support hospitals, industry and business on a national basis as quickly as possible while at the same time enabling commercial investment in demand driven "last-mile" connectivity, potentially using multiple access technologies, including FTTH and 5G fixed wireless. This would provide the essential core infrastructure platform commercial investment needs to be able to extend services economically to customers in underserved areas now and in the future. It is not necessary for the State to replace commercial investment completely as appears to be the case in the current NBP approach.
I will now address our participation in the national broadband plan process. Imagine was an active participant in the high-speed broadband task force. The initial NBP goal was to provide next generation access, NGA, high-speed broadband services using different technologies as provided for in the state aid guidelines, SAG. This would ensure the delivery of 30 Mbps broadband to 100% of the population and 100 Mbps to 50% of the population by 2020. In 2014 the Government approved a more ambitious plan with a focus on long-term future-proofed infrastructure with additional fibre backhaul, a key component underpinning the technology used to deliver the service to customers in rural areas.
I will now refer to the mapping process. As required by the SAG and to avoid market distortion, the purpose of the mapping process is to assess existing and planned commercial deployments to identify market failure and minimise unnecessary intervention. At the end of 2015 our plans for the roll-out of high-speed broadband were rejected by the Department and therefore not included in the NBP maps which defined the proposed intervention area. Since then many of the perceived risks that led to our exclusion, such as the risk that Imagine would fail to secure spectrum in the ComReg auction and concerns about the availability of LTE advanced wireless equipment, evolution of the technology and market demand, have been shown to be incorrect. The revised NBP strategy, including the 2020 broadband map published at the end of December 2015, effectively embedded FTTH as the preferred intervention solution. Fibre to every home, which had never been done anywhere ever before and has never been done since, subsequently became the mantra of the NBP.
I will now outline our involvement in the NBP intervention process. The project information memorandum, PIM, for the NBP set out very specific and detailed pre-qualification criteria for the financial, technical, building, operation and management work. These included a requirement that in the preceding two years, consortia bid members had participated in similar relevant large-scale infrastructure projects with a value in excess of €300 million. Together with Macquarie Group, one of the largest infrastructure funds in the world with an impeccable and highly successful track record in Government infrastructure projects and public private partnerships in Ireland, we assembled a consortium of blue-chip international partners which exceeded all of the requirements of the pre-qualification criteria. This consortium included Macquarie Group, Black and Veatch, which is one of the largest telecommunications infrastructure contractors in the US, and Huawei, the largest communications technology company in the world.
Due to an administrative technicality pertaining to the ultimate global holding company ownership structure of both Black and Veatch and Huawei, both were deemed ineligible to be a bidder member and the economic, financial, technical and professional capability of these entities was excluded from the assessment process.
Therefore, their contribution to the consortium was not considered in the evaluation of our pre-qualification questionnaire, PQQ, which then, unsurprisingly, failed to meet the stringent pre-qualification criteria. Given their international experience, the bid members were very surprised and disappointed with their exclusion, and while an appeal was considered, this was not pursued as the subsequent immediate announcement of a gap-funded model, which favours existing infrastructure operators, in preference to a concession model consolidated the apparent preference for a full fibre to the premises solution, which our consortium did not consider to be financially viable.
We were asked by the committee to address the administrative risks to the NBP and there are a number of existential threats to the NBP process. Given that the pre-qualification process was to ensure the financial, technical and operational capability to complete the roll-out, the significant changes in the last remaining consortium’s membership raises concerns. Does the remaining bid member meet the PQQ criteria, and if not, what are the consequences for the integrity of the process and the outcome? In circumstances where the two bidders with experience in the roll-out of fibre to the home, FTTH, networks have pulled out of the process, apparently on the basis that they could not make a commercial business case, the inevitable conclusion is that either there is a significant risk to the successful roll-out of the network or there will be a significant increase in the final cost, or both. With the sole remaining bidder determining the only proposed technical solution, without the required spectrum and absent any competitive tension, there is a risk that the process can no longer deliver its objective while effectively excluding the benefit of available, alternative lower-cost last-mile solutions.
With the current intervention based on an end-to-end FTTH solution, in the absence of a phased approach which prioritises fibre backhaul infrastructure, there is a risk that while some areas will eventually benefit, other areas will be significantly delayed and will have to wait many years to get any service. With 5G essential to the future digital society and economy, and wireless mobile a part of that, the current FTTH approach can no longer of itself achieve the very objectives of the NBP, with the risk of further marginalising regional Ireland and rural communities. An inherent risk to the proposed FTTH focused NBP intervention is the requirement for and cost of access to incumbent poles and ducting infrastructure, resulting in avoidable delay and unnecessarily high costs to the State and taxpayers. There is a risk that unnecessary market intervention and cost could lead to difficulties with state aid approval. All these identified risks will need to be addressed by the Department and in any contract. This should happen to ensure the NBP is successful.
We have had no communications with the Department on the operation of metropolitan area networks, MANs. However, this infrastructure is underutilised and could be a useful component of a fibre backhaul network across Ireland. We are a major user of fibre backhaul so today's news of a reduction in price is welcome. It will be a significant factor in bringing down the cost of fibre backhaul for our network. With regard to the mapping of MANs, private fibre networks and mobile blackspots, in line with state aid guidelines, all existing and planned commercial investment should be taken into consideration prior to any state intervention into a commercial market. The mapping of mobile blackspots is a different issue and should be looked at separately from the NBP. In the context of the NBP, 5G mobile will have a significant impact on the future digital economy, and the availability of fibre backhaul infrastructure in the regions is also critical to the development of 5G mobile services in those areas.
On behalf of Imagine, I thank the committee for providing us with the opportunity to outline our views and I welcome any questions it may have.