Magnet clinches public sector deals

18-04-2007

by Maxim Kelly

Telecoms provider Magnet has extended its reach into the public sector with a number of recent contract wins.

ENN has learned that the telco's business arm Magnet Business is close to sealing a deal with Galway City Council to connect the local authority to the Government's national virtual private network (VPN) which links the majority of the State's public bodies.

A spokeswoman for the Council could not confirm the deal's completion but informed sources suggest an agreement has been made.

Magnet concluded a similar deal with Limerick City Council in recent days to provide the authority with a fully-managed 50Mbps fibre connection to the VPN. The connection is designed to facilitate council staff with a secure, high-speed connection to government departments and other state agencies.

The contract was awarded to Magnet after a competitive tender process, and utilises the Limerick Metropolitan Area Network (MAN) to link in to Magnet's infrastructure in Dublin.

The Limerick win followed a similar deal with Offaly County Council, according to Magnet, which claimed the infrastructure it makes available to public bodies can easily be upgraded. Magnet's Flat Rate Metro Ethernet allows large-scale customers to cap the bandwidth they need and prioritise vital applications over the link, according to the Dublin-based broadband provider.

In this respect Magnet Business claims its service is scalable without additional investment in equipment or a physical technical presence on site.

Financial details of the public sector deals have not been revealed. Industry sources estimate the contracts would each be worth between EUR100,000 to EUR200,000 for Magnet per year. A large proportion of the cost of these connections -- some 20 to 30 percent -- is believed to have been spent on physical construction costs such as digging up roads to lay fibre optic cables.

It is understood Magnet has also won a three-year hosting contract with ESB Supply. BT formerly held the contract with the electricity company. In February Magnet established a point of presence in the Servecentric data centre in Dublin to facilitate hosting services.

Donal Hanrahan, sales director for Magnet Business, told ENN the company was delving into the public sector where it could attract large, "prestige" customers.

"Around a year ago Magnet was a new entrant into Irish telecommunications and we've worked hard to build credibility with people," he said. "Government business is important as it ticks all the boxes [for industry observers] in terms of strict tendering processes, long term contracts and references."

"And of course we know [public bodies] are going to pay their bills," he added.

Hanrahan said deals such as the Limerick City Council win would be impossible without using the MANs, which are run by state-owned company E-Net.

"Weighty lobby groups have criticised the MANs because of lack of interconnectivity -- some have been called 'islands' -- but we only have positive things to say," said Hanrahan, adding that without the MANs, Magnet may not have been able to fully offer its products in areas such as Galway, Limerick, or Portlaoise.