Time called on Eircom fixed line monopoly

EIRCOM’S controversial monopoly on fixed line charges will be effectively brought to an end within the next month.

Cumulative increases of 22.5% in charges for fixed lines in the past year has seen customers' basic monthly telephone rental cost rise from €19.60 to €24.30 per month, before making any telephone calls.

Communications Minister Dermot Ahern told an Oireachtas committee yesterday he will direct telecommunications regulator ComReg to introduce rental pricing competition by March.

Mr Ahern said if the new regime was not in place, or if it did not deliver "verifiable competition and lower prices" by the end of June, he would cap line charges.

The announcement came at the end of a hearing of the Oireachtas Committee on Communications. It heard submissions from Eircom, ComReg, other telecom operators and consumer representatives.

Committee chairman Noel O'Flynn (FF) showed Eircom rental charges for residential fixed lines was the highest in Europe €8 higher per month than the €16.20 average.

ComReg commissioners chairperson John Doherty and Iseult Goggin also revealed only 300-400 people had availed of an Eircom scheme to assist vulnerable users most affected by the increased charges. They identified a potential 60,000 customers who might face hardships.

Eircom chief executive Dr Philip Nolan later conceded the company had not done enough to make vulnerable consumers aware of the scheme but said it was embarking on a high-profile campaign to rectify this.

When it got a 15% rise last year, Eircom agreed to assist those consumers, but committee members Simon Coveney (FG) and Eamon Ryan (Greens) criticised its efforts. "These people are being targeted unfairly 300 people is a miserable return," said Mr Coveney.

Mr Ryan later pointed out Eircom's submission showed a retired widow who made minimal calls would see her telephone bill increase by 20%.

Dr Nolan said Eircom made a loss in the access network on which the fixed line charges are based.

Eircom and ComReg told the committee overall phone charges fell 25% in real terms in recent years.

However, committee members said the decreases were seen only in call charges (open to competition) and not in fixed line charges (which is not).

Earlier the independent telecom operator groups, Alto, pointed to large increases in operating profits at Eircom and significant reductions in investment.

Dr Nolan responded by pointing to greater cost control within Eircom. He rejected the idea that venture capitalists Valentia, which own 70% of Eircom, were attempting to boost revenue at the expense of consumers ahead of the company being floated later this year.

Dermott Jewell, of the Consumers Association, said the increases would boost Eircom's revenue by €90m.