Ahern urges lower prices for comms competition

31 Mar 2004

Communications minister Dermot Ahern TD has issued new directions to the communications regulator ComReg, aimed at lowering prices for consumers in the internet, telecoms and mobile sectors. The directive follows a consultation process which ended on 1 March last.

The department invited submissions to be made on the issues and has now made its findings public.

The Department of Communications, the Marine and Natural resources has directed ComReg to use regulatory and enforcement tools, “where necessary and subject to relevant requirements under European and National law”, to support initiatives to develop broadband and remove regulatory barriers to such initiatives.

ComReg has been directed to focus on three elements: the residential and SME sectors; balanced regional development and the potential for broadband provision on alternative platforms. ComReg said that work is already underway on the latter; earlier this month the regulator awarded 38 licences to eight different wireless broadband service providers based in different rural and urban areas.

Interestingly, in the briefing document the Minister appears to have revised upwards his targets for broadband adoption. As reported in siliconrepublic.com last month, it appeared as though the Government had set its goal to be better than the EU average by the middle of next year. However, this omitted the fact that the accession countries would have joined the EU by that time, forcing the average downwards and making the target more easily achievable. Now, the latest directions explicitly state that Ireland’s target of reaching or beating the EU average does not now include the accession countries.

Minister Ahern is also directing Comreg to introduce by today a wholesale and retail telephone product for voice and data at rates that will promote competition. “This move will have two practical benefits for consumers. First, it will mean that all telecoms companies will be able to offer a single billing product to consumers. This should lead to competition and lower prices for consumers,” he said in a statement. “Secondly, it will mean that consumers who chose to switch to a new, cheaper telecoms company will only receive a single bill from that company.”

A spokesman for ComReg confirmed to siliconrepublic.com that today’s deadline would be met but emphasised that this referred to the rate at which other licensed operators could buy the lines from Eircom. It may be some months before a retail offering is available to consumers, he said. “The timeframe is hard to judge,” he pointed out. This is because implementing single billing is an extremely complex project, requiring various telecoms systems to be connected, a testing period as well as the need to ensure that customer bills will be accurate.

The mobile sector will also come in for scrutiny, as Minister Ahern mandated Comreg to intensify competition in that market by looking at the possibility of opening up mobile phone networks to other Irish and International companies. ComReg itself issued a consultation document earlier this year on this very subject; all of the mobile phone operators, as well as other interested parties, have made submissions about this.

Another goal set down by the Minister is to have agreement on national roaming commercially and technically implemented by the end of the year.

ComReg has been directed to report on these developments on a three-monthly basis, starting at the end of June, with others to follow at the end of September, at the end of December and at the end of March 2005.

ALTO, the association of alternative telecoms operators, welcomed the new policy directions. In a statement on its website, the group said: “Significant parts of the communications industry remain under monopoly or duopoly control. The policy directions proposed by the Minister are all aimed at delivering a competitive and dynamic market. ALTO fully supports Minister Ahern and believes that the proposed policy directions, if implemented, should have a significant impact on the sector”.

ALTO said that the current business case for launching a single billing services was “unattractive” and said that regulatory intervention would be required to determine a competitive wholesale margin. It suggested at least double the current level of 8.5pc.

By Gordon Smith