LLU cut a step in right direction, but more work to be done

8 May 2009

There has been a mixed response from Ireland’s local loop unbundling (LLU) stakeholders to today’s price reduction proposals by the Commission for Communications Regulation (ComReg).

ComReg today announced a consultation on a potential 25pc price reduction for the price of a fully unbundled line.

The proposed cut effectively reduces the cost of accessing Eircom’s network from €16.24 to €12.18.

While the news has been welcomed by two of Ireland’s main LLU stakeholders Magnet and BT, it is clear that the Republic of Ireland still trails behind pricing transparency enjoyed in Northern Ireland.

BT Ireland chief executive Chris Clark pointed out that LLU has been the driver for innovative high-speed broadband take-up in many countries in Europe and could be so in Ireland.

The price reduction proposal suggested by ComReg would really help, Clark said. “BT welcomes this proposed price reduction. LLU has allowed BT to provide innovative broadband services at speeds of up to 24Mbps to our customers and is a core component of an e-enabled digital Ireland.”

However, Magnet chief executive Mark Kellett pointed out that even with the proposed cuts, the price of accessing an LLU line is still 33pc higher than in Northern Ireland.

“We are deeply disappointed by the reduction being proposed by ComReg today”, Kellett said. “While a reduction is welcome, it still does not go far enough.

“As an example, if we look at Northern Ireland, even with today’s proposed reduction, it is still 33pc cheaper to access the local loop there.

“The experience across Europe clearly shows that where the pricing of the local loop is set at a level that encourages investment, competition flourishes and the consumer benefits,” Kellett pointed out.

Magnet’s 40th unbundled exchange has just gone live in Rathmines, meaning Magnet will now be available to an additional 1,000 businesses and 14,000 homes, the company said.

Smart Telecom director John Quinn said that, if agreed, the new pricing brings Ireland more in line with international prices, and will help our economy, innovation and investment in the telecommunications sector – all of which are vitally and urgently needed to help bring us out of our current economic troubles.

“Smart Telecom is also calling on Eircom to exercise a practical approach in terms of accepting the new proposed pricing. This is particularly relevant given the current economic difficulties in Ireland and the challenges the communications industry faces, coupled with the ever-increasing pressures on consumers.

“A new approach of collaborative working is needed for Ireland, and now is the time to seize this opportunity. Eircom can show leadership here, and we challenge it to demonstrate this in its actions by accepting the new pricing structure, which is good for Ireland, good for competition and innovation and good for Eircom in terms of driving wholesale revenues and the uptake of copper-based services in general,” Quinn added.

By John Kennedy

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