Urban areas of Ireland face potential broadband price hikes next year

8 Aug 2014

The removal of a €3 per line promotional discount offered by Eircom to other telcos reselling its fibre-based broadband services in urban areas of Ireland could result in charges being passed on to consumers.

Eircom’s Wholesale group offered the €3 discount to other providers in a promotional sense within Large Exchange Areas (LEAs), where it has deployed fibre infrastructure.

As such, the typical cost of a licensed operator, including Eircom Retail and other providers such as Vodafone, Sky and others, providing a line to a home or business will increase from €15.02 to €18.02 on 31 December this year.

It will then be at the discretion of each operator to decide whether or not they want to increase the price they charge per month to consumers for providing a fibre-based broadband service or absorbing the cost and receiving a lower margin.

A recently released ComReg document (Para 10.2 Page 112 of 176) confirmed the ending of the discount.

“As this is a wholesale charge the actual increase for consumers may be much higher, perhaps even as high as €10 per month,” said Ireland Offline chairman Eamon Wallace.

The LEAs are areas included in Eircom’s planned national fibre footprint from 1.2m homes and businesses to 1.4m homes and businesses across Ireland.

Some 1m homes and businesses will be in LEAs this summer as Eircom’s broadband rollout continues.

By July 2016, Eircom estimates 70pc of the country across 26 counties will have access to fibre broadband speeds of up to 100Mbps.

No plans to increase broadband prices in non-LEA areas

In response to questions from Siliconrepublic.com, the operator said: “Eircom has informed operators who use its network that the €3 promotional discount on SB-WLR monthly rental for customers that also avail of a broadband/line share service in the Large Exchange Areas will not be continued once the promotional period expires on 31 December 2014. This applies to all operators who use our network. It is up to each operator to decide if those changes will be absorbed or passed on to customers.”

In light of reports that broadband subscribers in rural areas may see prices increase following the expiry of a deal between Three Ireland and the Government as part of the National Broadband Plan, a spokesperson for Eircom said the ending of the LEA discount is unrelated.

“Eircom has no plans to increase the prices of broadband in rural Ireland in non-LEA areas.

“Eircom is addressing the underlying issue of access to high-speed broadband through the rollout of Ireland’s largest fibre network, which is being rolled out 1.4m homes and businesses.

“For those homes and businesses which cannot be reached on a commercial basis, the Government has committed to provide superfast broadband through the National Broadband Plan and Eircom intends to compete vigorously to win that tender,” Eircom said.

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