Eircom disconnects Smart — 45,000 users affected

3 Oct 2006

UPDATE: Some 45,000 telecoms and broadband customers were last night deprived of a basic telephone service when Eircom disconnected troubled telco Smart Telecom from its network.

It is understood that none of Smart Telecom’s customers received a warning of the move. The decision by Eircom was made over some €4m worth of debt that Smart has not paid Eircom.

The move sees 45,000 telephony customers, including some 16,000 broadband customers, without a basic service this morning.

Smart Telecom is understood to have ratcheted up bills of over €36m trying to market its services to Irish users. However, the company failed to bring in sufficient business to match this expenditure.

It emerged that the company’s investors have been spending €3m a month to keep the company afloat.

In recent weeks founder and CEO Oisin Fanning stepped down from the company while the company decided in recent weeks to reduce its headcount from 450 workers to only 100 employees.

It is believed Eircom informed the Commission for Communications Regulation (ComReg) of its decision yesterday. It is understood that while Eircom has removed most telephony services, users of Smart’s services will have access to emergency services and incoming calls.

In a statement the Minister for Communications, Marine and Natural Resources, Noel Dempsey TD said he was informed of the disconnection late last night. The Minister said he has asked Eircom to maintain full services for the affected customers until discussions can take place between the Regulator, Smart Telecom and Eircom.

A spokesperson stated: “The Minister has been informed that a meeting will take place at 9am between the parties and he hopes that a satisfactory resolution to this dispute can be reached. The Minister calls on all parties to engage constructively with the Regulator to reach a settlement.”

The move has been greeted with dismay by the business community. The Irish Exporters Association (IEA) claimed that the move, which was made with no advance warning to customers, will have a detrimental effect on business customers, many of which rely on Smart’s voice and broadband services to trade internationally.

John Whelan, chief executive of the IEA, said: “Business generally but exporters in particular are dependent on broadband services, particularly the affordable reliable DSL broadband delivered over the fixed telephone lines, to enable them to meet the ever-increasing data information demands of overseas customers.

“It is critical that the necessary steps are taken to ensure that exporters are not left without a broadband service while this issue is being sorted out.”

The IEA have also called on the Minister to incentivise the rollout of broadband in Ireland, citing the lack of broadband services as being bad for business and detrimental to the competitiveness of export industry.

According to a recent report by the European Competitive Telecommunications Association (ECTA), with only 8pc of the population using broadband, Ireland’s broadband penetration is almost half the EU15 average of 15.9pc of population. This leaves Ireland in 14th place out of 15 in broadband penetration.

By John Kennedy