The Government has confirmed eir has formally withdrawn from the National Broadband Plan bidding process.
In a statement, the Communications Minister Denis Naughten said that the provider notified his department of its decision to withdraw.
Eir, which is currently rolling out high speed broadband to over 300,000 premises in rural Ireland, has reconfirmed its commitment to this investment.
There is now just one bidder in the running for the state broadband contract, enet-SSE consortium, which says it is continuing its commitment to the plan.
Minister Naughten has said that the Government has not been put in a difficult position by eir's withdrawal from the bidding process.
There are now fears that a lack of competition may lead to an increase in price for the taxpayer.
Minister Naughten said that although this will not be the case, the Government has a plan B if it does happen.
"We have a good idea based on the costings that have come in, what the ballpark figure are in relation to this," he said.
"It's not a case that in relation to pricing that we're over a barrel by any manner of means, and it's in the interests of the company that it actually builds out this network quickly, because you have wireless operators, as well as some fixed line operators, that may decide to compete with them.
"So it's in everyone's interest that this happens, and happens quickly."
Fianna Fáil Spokesperson on Communications, Climate Action and Environment, Timmy Dooley has said the writing was on the wall for the Government’s National Broadband Plan as soon as SIRO deciding to pull out from the tendering process last year.
“Some people believe that the Government has complicated the process so much that it has become next to impossible for potential bidders to respond in a commercially viable way," he said.
“The question that Government need to answer is are they serious about rolling out broadband to rural communities, and are they prepared to pay for it?
“This represents an unmitigated failure on the part of Government, and leaves over 540,000 households in serious limbo.
“I do not believe that the current tender process can continue with just one bidder involved.
“Minister Naughten has presided 20 months of failure in terms of the National Broadband Plan since he became Minister. There is no two ways about it.
“Tonight there’s hundreds of thousands of families, farmers and businesses wondering if they will ever get the broadband they need.
“The Government should collectively hang their heads in shame over the shambles that the National Broadband Plan has become.”