ALTO calls for tighter controls on Eircom


28 Jan 2004

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Stringent controls on Eircom’s line rental should be introduced until a competitive service is available to consumers, ALTO, the lobby group representing alternative operators in the communications market, told the Oireachtas Joint Committee on Communications, Marine and Natural Resources this morning.

ALTO chairman Iarla Flynn told the committee that ComReg had relaxed the controls on line rental in early 2003, on the basis that Eircom would introduce a wholesale line rental service to other operators so that competition would be introduced in the market. The new service would allow consumers get both their phone calls and line rental on a ‘single bill’ from an alternative provider.

“We told ComReg not to relax the price cap until single billing had been introduced and was seen to be working. It ignored our requests to the detriment of the Irish consumer. Since the relaxation of the price cap, Eircom has increased line rental charges three times but has failed to introduce the promised wholesale offering. ComReg does not appear able to enforce its own decisions – no action has been taken against Eircom,” said Flynn.

“Every month that single billing is delayed is worth €40m in line rental revenue to Eircom. This project is already 12 months late and all the indications are that ComReg’s new deadline of March will also be missed.

“Eircom’s monopoly on line rental is a serious inhibitor of real choice and competition in the Irish telecoms market. Marketshare of new entrants stands at just 10pc, well below the EU best of 30pc. Eircom has simply hiked up the price of its line rental to make up for business lost to lower cost competitors, and to fund its own call charge reductions. What consumers save in lower call charges they simply pay back to Eircom in the form of increased line rental. This is surely not what was intended by liberalising Ireland’s telecommunications sector,” said Flynn.

“Our members want a commercially viable single billing service introduced immediately. This will give consumers real choice. A freeze on Eircom’s line rental must be introduced until competition is established. If ComReg cannot direct Eircom to achieve this then Minister Ahern must intervene,” Flynn concluded.

ALTO, operator Smart Telecom, the Consumer Association, ComReg, Eircom and Minister Ahern are today all due to meet with the Oireachtas Joint Committee, which is chaired by Noel O’Flynn TD, to discuss the recent line rental price increase announced by Eircom.

Further reports from the Committee’s hearing will be posted on siliconrepublic.com.

By Brian Skelly