Tuesday, 21 May 2019

Questions (542)

Joan Burton

Question:

542. Deputy Joan Burton asked the Minister for Communications, Climate Action and Environment the estimated equity value of the national high speed broadband network in the national broadband plan upon its completion. [21999/19]

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Written answers (Question to Communications)

The value of a company is generally based on its likely future profitability. While National Broadband Ireland will, similar to any commercial company, strive to maximise its revenue and profitability, it will be constrained due to State Aid restrictions and regulatory oversight of the prices it can charge. Under State Aid rules it cannot use the subsidised network to compete in commercial areas and therefore its annual turnover may at its peak be in the order of €150m. The monthly prices it can charge are also capped to ensure they are comparable to those charged in urban areas. National Broadband Ireland will have to cover its operating costs from its annual revenues. It is difficult, therefore, to estimate with any certainty what the value of the company is likely to be at year 25 of the contract. Where the company is profitable at this point, the State will clawback 40% of this value under the contract and NBI will continue to operate the company at its own cost and serve all customers for a further 10 years up to 2054.