ComReg rejects criticism of Eircom product

21 Oct 2003

The Commission for Communications Regulation (ComReg) has strongly defended its management of the introduction of Eircom’s new partial private circuits (PPC) service in response to stinging criticism last week from the Association of Licensed Telecoms Operators (ALTO).

ALTO claimed that PPC – a wholesale leased-line broadband service for alternative licensed telcos – had resulted in an actual increases in the cost of providing broadband, with price increases of up to 50pc in some cases. The group also criticised ComReg for failing to manage the service’s introduction, considered one of the last hurdles for broadband in Ireland.

Eircom currently supplies 21,000 leased lines directly round the country with a further 9,000 supplied by other operators on Eircom’s network. This business is worth about €125m to Eircom each year.

In a statement which described PPC as “a valuable addition to existing wholesale leased line products”, ComReg said that the combination of the new PPC products and existing wholesale products would result in significantly reduced costs for operators and increased competition in the retail leased line market – which “should result in savings which can be passed on to end users”.

ComReg claimed that operators who resell Eircom leased lines using the new PPC product and existing wholesale products could expect to make savings of between 20pc and 40pc. “Such savings could make a material difference as they potentially run into millions of euro each year,” the statement said. The view expressed by ALTO’s chairman, Iarla Flynn, appears to ignore these savings, said ComReg.

The watchdog also claimed that some of ALTO’s own members had told it that PPC “offers real and significant savings”.

Addressing ALTO’s concern that PPC is not as attractive as existing products for longer circuits, eg Dublin to Shannon, ComReg countered that the new product would reward operators that invest in infrastructure in areas such as Shannon and encourage further investment in infrastructure outside of Dublin.

By Brian Skelly