Watchdog warns Eircom it may lose customers after 3% price hike

A CONSUMER watchdog has warned Eircom it may lose customers and see others ditch their land lines for mobiles after the telecommunications giant announced it was hiking prices by an average of 3%.

The Consumers Association of Ireland (CAI) has warned that the telecommunications firm is facing the crisis situation after announcing average cost rises of 3% for every customer.

In a controversial move described as “damaging to itself” by the CAI, Eircom executives have announced plans to round-up line charges to the nearest minute instead of the existing nearest second system.

The move means that from July 1 if someone uses their land-line phone for one minute and one second they will be charged for two minutes, with call charges only being rounded up and not down.

An Eircom spokesperson said the decision to increase the per-second cost structure, which will result in average bill rises of 3% per customer, was unavoidable and in line with “market trends”.

Group managing director in Eircom’s consumer and small business section Stephen Beynon said while the firm understood that any price rise “in the current climate is a concern” to his customers, individuals using the company’s services would still benefit from “good value”.

However, rejecting the claim, CAI chief executive Dermott Jewell said the move was just another version of asking ordinary people to pay for major businesses’ financial concerns. “This is wrong for reasons we all already know, this idea that everyone should help pay for big business. It is a poorly thought out and retrograde step from Eircom. And I really don’t think it’s going to endear them to their customers. It might even push people away, give them a nudge to look at other options that are available.

“I wouldn’t be surprised if people just cancelled their land-lines and used their mobiles instead. These are unusual times, and blaming ordinary people for financial issues is not going to help any company,” he said.

Eircom’s land-line customers slumped by a massive 9% between June 2009 and March 2010, down 75,000 to 1.49 million users.

The drop is more than double the 32,000 mobile customers the company gained over the same period and contributed to earnings before interest, tax, depreciation and amortisation of €497 million – 3% down on the previous year.