Mobile users ripped off, says consumers’ group

3 Oct 2003

Ireland’s GSM mobile market is in effect a duopoly and Irish mobile users are being overcharged for services, the Irish Consumers’ Association said yesterday in a presentation to an Oireachtas Committee on the Mobile Telecommunications Market in Ireland. Prepaid users are the worst hit, the association said, often paying up to 400pc more for calls than billed customers.

Despite there being three players in the Irish mobile market, and a fourth player, called 3, due to enter the market with the advent of 3G, Vodafone and O2 are operating what in effect amounts to a duopoly, since Meteor Communications has only 3pc of the market, said James O’Flynn, chairman of the Consumers’ Association of Ireland. Although it has the smallest share, O’Flynn said that Meteor has the cheapest phone calls in the market.

“People who pay up front for mobile networks are paying higher prices per minute on air than billed phone users he said. Sometimes four times as much, or 400pc dearer,” he said. “It is a pure unadulterated rip-off.”

To illustrate his point he said that some prepaid mobile users at peak traffic hours are paying 60 cent per minute, compared with 15 cent per minute on an agreed tariff for billed phone users. “People are being exploited,” O’Flynn said.

“What we are seeking from the mobile operators is more transparency in the prices. While we don’t have a situation like in Germany where there are as many as 1,000 different tariffs, we do have a situation where there are 10 different tariffs per operator”, he said.

“Competition,” he continued, “is non-existent. We have only two real players and they don’t seem to offering serious advantage to the consumer. Business users also are not being well serviced by the mobile industry. The quality of service is poor. Each network has its own antennae.

“However, if you cross the border into the north, the services are much better. We believe the operators in Ireland should swap services and share masts to provide better services.

“Competition is not something we are seeing in this market. Prices for text messaging are too high. It does not cost 8-9 cent to send a text message with 160 characters with 1Kb of information. It’s outrageous that we see such prices knowing that that it will cost much less to the operators to send. We are calling for better services and more competition.”

In order to see this happen, Flynn argued that the Commission for Communications Regulation needs to have its teeth sharpened. At present he believed that both O2 and Vodafone appear to be bullying the regulator.

O’Flynn’s criticism of the mobile market comes on the heels of similar disquiet voiced by the Minister for Communications, Marine and Natural Resources Dermot Ahern TD earlier this week when he discussed what he perceived to be outrageous roaming charges charged between North and South. He said he will be seeking their abolition next year.

He said: “As a minister from a border county, I know all about the madcap roaming charges imposed. You don’t even have to cross the border in county Louth to be hit in your pocket. As far south as Clogherhead and Ardee, someone with a mobile phone could suddenly stray onto the UK service of a mobile operator and end up paying five times the price for a normal call. This has to stop.”

In a separate presentation to the Oireachtas Committee, the chairperson of ComReg Etain Doyle echoed O’Flynn’s call for greater transparency, but said that a European Commission co-ordinated approach across the EU on roaming charges and pricing structures would benefit the consumer best.

In terms of average revenue per user (ARPU), Doyle said that Ireland and Norway were well above the European average.

The arrival of Meteor into the market resulted in major reductions in mobile tariffs, she said. “Although price reductions have been significant, on average Irish retail prices were amongst the highest internationally.”

In conclusion she said that ComReg guidelines on minimum contract terms that mobile operators give consumers is to be published shortly.

By John Kennedy