Mobile phone rip-off - Consumers deserve to be protected

The revenue of mobile phone firm O2 Ireland has jumped 13% in the past year and the company’s gross profits are up by around 9%, while Irish consumers are being ripped off.

We have already had plenty of warning, yet the Department of Communications seems to be sublimely indifferent to the situation, even though Minister for Enterprise, Trade and Employment Mícheál Martin is moving to tackle the problems within his ambit with some determination.

Last December, the Commission for Communications Regulation (ComReg), announced that Irish mobile phone prices were more than a third higher than the European average. It recommended to the European Commission that O2 and Vodafone - who together control about 91% of the Irish mobile phone market -should be compelled to open up their networks so that outside competitors could lease time off them in order to ensure more competition in the Irish market.

ComReg concluded that O2 and Vodafone were in tacit collusion to limit competition. As a result, Irish consumers, who have the second-highest rate of mobile phone usage in Europe, have been suffering from a lack of real competition.

In countries where Mobile Virtual Network Operations permit other companies to provide competition by buying airtime from established mobile phone companies, extra competition has resulted in the slashing of prices by some 25%.

The European Commission approved ComReg’s recommendations in January of this year, and ComReg issued the formal order to open up the market in March, but O2, Vodafone, and Meteor lodged appeals against the order with Communications Minister Noel Dempsey. Although their appeals were lodged in March, the appeal process has still not begun. The minister has yet to appoint a panel to hear the appeals. While he dithers, mobile phone users are being ripped off.

Official recognition of the need for consumer protection was highlighted yesterday with the formal announcement of plans to have the new National Consumer Agency up and running by the end of the summer. Mr Martin demonstrated his determination to tackle the rip-off culture by immediately appointing an Interim Board.

The report of the Consumer Strategy Group, following a 12-month study into pricing unsurprisingly concluded Irish consumers were not getting a fair deal.

Some 65% of consumers found the price they paid was different to what they expected, while a staggering 87% of consumers felt they were frequently being overcharged. In these circumstances, no one should be surprised that tourists have been complaining about being ripped off when such a high percentage of consumers here believe they have been overcharged.

There is no doubt of the pressing need for a National Consumer Agency with a determination to act.