Call for ‘equal rights’ for licensed telcos

6 Sep 2005

The chairman of the Association of Licensed Telecoms Operators Tom Hickey (pictured) has criticised the lamentable state of telecoms competition in Ireland and, in particular, called for equal rights for licensed telcos competing in the retail telecoms market.

Criticising Eircom’s dominance across most fixed-line markets, Hickey said: “Broadband penetration, which has been held up as a primary government objective is among the lowest in Europe. Line rental in Ireland is not just the highest in Europe but it’s 60pc above the average. Leased lines remain expensive because we don’t have the option to use SDSL, which would bring prices down. The experts are telling us that we need competition and innovation to boost Ireland’s productivity if the country is to maintain economic performance.”

Hickey, who was one of the founding executives of the Office of the Director of Telecoms Regulation, today known as the Commission for Communication Regulation (ComReg), added that licensed telcos can’t get the wholesale products they need and don’t feel they get equal treatment to Eircom’s retail arm.

“But this is all part of what monopolies do to frustrate competitors and squeeze them out of the market. Similar to the old absentee landlords, they just want to hold what they’ve got and keep milking for as long as possible.

“Let’s just think about that for a minute. When the Irish Land League sought justice for small farmers, it had three simple demands that summed up what it wanted: fair rent, free sale and fixed tenure. Well if I was to give a simple summary of what we need in the telecoms sector right now it would be: equivalence of access, fair margins, regulatory certainty, effective penalties and open tenders,” Hickey said.

Explaining his demands, Hickey said in terms of equivalence of access: “Other authorised operators must have the same facilities at the same time and on the same terms as Eircom Retail. The only way to guarantee this is to have properly separated wholesale access and retail operations. Fair margins – ComReg must introduce transparent margin squeeze tests. In the case of wholesale line rental, the wholesale price is fixed relative to Eircom’s retail price. I don’t believe the margin allowed to new entrants is sufficient to cover retail activities.

“Regulatory certainty – we need regulatory decisions that can be implemented quickly, but so far the appeals process has only served to delay competition. This is not what it is supposed to do. Effective penalties – at the moment there is no downside to delaying competition, it’s a win-win choice for the incumbent. We need hefty fines imposed for delays or anticompetitive behaviour.

“Open tenders – telecoms markets change rapidly and tariffs have fallen significantly since the introduction of competition. A year is a long time in these markets. Government services should be offered out to tender periodically and not rolled over year after year,” Hickey demanded.

Predicting a sea change in the current situation, he said: “It’s not all doom and gloom. To my mind, the pendulum has now swung as far it will go and it’s about to start the return trip. We will now see ComReg using all of its existing powers to help competitors get a grip on the sector and there are quite a few that will come available under the new regulatory framework. The Government will also be casting a cold eye over the workings of the markets and considering how to change things, whether that’s by giving ComReg more powers, making policy directions, or by simply shopping around for their own services – Government is one of the biggest buyers of communications services in the State.”

Hickey was speaking last week at the launch of a new line-rental product by Energis, enabling consumers to put their entire line rental and ancillary services on to a single bill. With the line-rental market estimated to be worth 423m per annum, Energis plans to take a 5pc market share over th next three years. The company also introduced a wholesale line-rental product for its business customers.

Conal Henry, chief executive of Energis, commented: “The introduction of competition into the line-rental market in Ireland has been a huge success. Some 140,000 lines have already been transferred to alternative packages, representing about almost 10pc of the total marketplace. Energis is perfectly placed to further accelerate this market growth.”

By John Kennedy