ComReg price cut will stimulate wholesale broadband market

19 Aug 2009

ComReg’s decision to dramatically reduce the cost of unbundling broadband lines from €8.41 down to 77 cents will make the Irish broadband market more competitive at a wholesale level and is good news for businesses and consumers, sources say.

The news was welcomed by the chief executive of BT in Ireland Chris Clark: “BT welcomes ComReg’s direction of a substantial price reduction for Local Loop Unbundling (LLU). We firmly believe that LLU has a significant part to play in the creation of competitive high speed broadband in the Irish market.”

ComReg yesterday issued a direction on the monthly price of broadband line share – a key component of local loop unbundling (LLU) – from €8.41 down to 77 cents.

A telecoms industry source who wished not to be named explained that the news will enable greater price competition and that consumers and businesses will benefit from more innovative LLU products.

“The view industry has is that Eircom was effectively getting money twice for the same thing. The same copper that we pay €16.43 fees for wholesale line rental (WLR) for voice was the same copper that we had to pay €8.41 a month per line for providing broadband.”

It is understood that ComReg is currently consulting on reducing the WLR price down to €12.48.

“This move will have a big impact on the wholesale market in that it would allow operators to compete in the unbundling space and the greater margins that operators will be able to enjoy will result in lower costs for end customers.”

The source likened the price reduction to the progressive LLU strategy agreed between BT in the UK and Ofcom whereby line share prices were reduced to stg£1.50 in 2005. Today, more than 6 million lines have been unbundled for broadband in the UK.

“The latest price reduction signalled by ComReg will hopefully stimulate more competition in the wholesale market in Ireland,” the industry source explained.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years