Single billing on horizon but obstacles remain

1 Apr 2004

UPDATE: Single phone bills for consumers may only be a few weeks away as rival operators prepare services for their customers. The move follows the availability, starting today, of wholesale line rental from Eircom, the incumbent telecoms carrier.

Smart Telecom has indicated that it will launch a residential version in a matter of weeks if not sooner. “Final tweaking and testing is where we are at the moment,” said Peter Murphy, head of regulatory affairs with Smart Telecom.

Neither Esat BT nor NTL have committed to exact launch dates. A spokesperson for NTL simply said: “We’re still looking at it.” In a statement, Esat BT chief Bill Murphy said he welcomed the development, adding that it would give consumers greater choice. However, his remarks also suggest that a launch date is some time off. “Over the coming few months we will be engaged in full and exhaustive product testing,” he said. “We anticipate bringing exciting new services to the market over the coming months and will keep consumers fully informed.”

Meanwhile Eircom has confirmed to ComReg that it met the 31 March deadline for providing a wholesale line rental product. “After that point, ComReg and operators will be working to test the product and at some point after the date has been met, residential services will become available,” a ComReg spokesman said.

Some technical hurdles remain and these apply to all operators. In addition to supplying a single bill to customers, telecoms providers will be able to provide ancillary services such as caller ID, hotline dialling, thee-way calling and caller return services. Versions of these are available as part of the wholesale line rental product. “It’s about developing systems to be able to cater for these and be able to bill for them as well,” said Peter Murphy.

As the operator with the second highest market share, Esat BT for example has close to 60,000 residential customers and putting all the mechanisms in place for this amount would take some time, it is thought.

Operators had expressed disappointment with the amount of margin available to them on the line rental product. At 8.5pc, they claimed that it offers little chance for passing on savings to consumers and much of the profit may be tied up in administrative overheads in providing the product. However in a late development, ComReg announced last night that it prices for the wholesale line rental product would be the retail price less 10pc, an increase of 1.5pc. Effective from today, this margin should apply for at least one year, ComReg said. Esat BT immediately welcomed the move, calling it a positive step.

Speaking at an industry event last month, telecoms regulator John Doherty acknowledged some of the concerns of rival operators but pointed out that the prospect of single billing should reduce the amount of ‘churn’, where customers change their service provider – usually back to Eircom – when they become frustrated at receiving one bill for calls and another for line rental.

“I recognise the fact that there are serious challenges. ComReg intervened last year with a three-month moratorium on win-back strategies by Eircom when it became obvious that out of 500,000 customers that left Eircom, some 350,000 were won back. We believe that the introduction of proper single billing… will influence matters. Another factor to bear in mind is that unlike the rest of Europe, Ireland does not have proper cable infrastructure that would compete against traditional fixed-line services. Our strategy is to keep stimulating infrastructural competition in order to move the game on.”

By Gordon Smith