19 July 2001 Edition

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Communications crisis looms


While Eircom shareholders ponder the battle of bids for their holdings by the eIsland and Valentia consortiums, there is still a steadfast refusal within government to tackle some of the more important issues facing the telecommunications industry in Ireland.

Failure to deliver vital telecommunications facilities to business, delays in providing the much hyped digital TV services and EU Commission raids on mobile phone companies amid allegations of price fixing by some of the largest phone companies in Europe are just some of the problems that were raised in the last week. It all adds up to a communications sector in crisis.


IDA Ireland has highlighted significant delays in the provision of vital broadband services to firms in the west of Ireland. The agency responsible for attracting inward investment into Ireland has said it is ``very concerned'' about delays in provisions of services and knows of four firms in the west of Ireland which had encountered problems when they requested leased lines from Eircom. One firm had been told that they would have to wait until January 2005 to get the telecommunications capacity it needed for its business.

The lines are needed by businesses operating call centres or financial and data based services who will only site here if there is access to vital broadband technology infrastructure. Modern communication-based businesses demand a much higher level of capacity from phone lines than that used by an ordinary domestic consumer. Eircom is supposed to be offering these services throughout the 26 Counties to businesses, but the supply failures in Mayo and Sligo show that this is clearly not the case.

For example, a call centre must be able to handle thousands of telephone calls a minute while also providing all the operators with high speed internet access to process customer queries and orders.

An IDA spokesperson told An Phoblacht that they were concerned about the impact such infrastructural gaps could have on regional development. ``There must be certainty,'' the IDA said, about the availability of telecommunication services.

Sinn Féin's Mayo representative, Vincent Woods, voiced his concerns about the delays in provision of services. He said, ``This is an equality issue; the West is once again being demoted and hampered in ensuring much needed economic development is delivered to the region. There is clearly a two-tier policy at work in the 26 Counties when it comes to the provision of vital infrastructure. Both Eircom and the department of Public Enterprise need to be brought to account as to why these inequalities are not being tackled head on. Job opportunities are being lost to the West and not enough is being done to redress the situation''.

However, the telecommunications problems facing not just Irish business but ordinary customers do not end there. Chorus, the second largest cable franchise in the 26 Counties, is to lay off 30 staff with another 30 likely to be culled from its 500-strong workforce. The company is in danger of losing its broadcasting franchise after its missed a deadline for rolling out its digital TV service to homes in Naas, Maynooth, Swords and Malahide by 31 March.


EU Commissioner Mario Monti is investiagting anticompetitive practices among mobile phone companies

Nine of Europe's largest mobile phone operators found the EU knocking on their door this week, as EU Commission investigators raided offices in Britain and Germany. The raids carried out last week were just the latest twist in an 18 month EU investigation. The offices of Vodafone, Orange, One2One, BT Cellnet, Virgin, Deutsche Telekom and KNP were all raided because of ``serious competition concerns''. The raids led to substantial falls in the share prices of these companies.

The EU Commission officials from Mario Monti's Competition directorate are investigating allegations of price fixing between leading mobile phone companies. When you travel from one state to another in Europe any person ringing your mobile pays the normal local rate for ringing a mobile. You as the receiver of the call have to pay an international roaming charge of on average one euro a minute. The EU Commission had noted that roaming charges were significantly higher than equivalent domestic rates. Competition Commissioner Mario Monti has claimed that roaming price rates between phone companies show ``an almost complete absence of competition''.

Revenue from roaming accounts for between 10% and 20% of mobile phone operators income in the EU even though only 4% of users are using the international roaming facility.

More damning was the finding that the cost of calling a landline in Britain for example, has fallen by 20% year on year for the last five years while roaming charges have hardly fallen.

Sinn Féin TD Caoimhghín Ó Caoláin told An Phoblacht: ``Roaming charges are an issue for mobile phone users in Ireland and in particular in the border region. Because the border is perceived to be an international one by the phone companies, mobile phone users living in the border region find themselves with significantly higher charges for what are in reality local charges''.

``The Dublin government must act to take the necessary steps towards ensuring the whole island is treated as one mobile network. The owners of both 26-County services, Vodafone and BT, also have a presence north of the border. Surely there should be one network and one charge. Charges for international roaming within Ireland is a nonsense and is merely exploiting mobile phone users.''

An Phoblacht contacted Eircell, who said that their roaming charges levied to international users who come to the 26 Counties is one of the lowest in Europe. They declined to comment about the issue of customers in the border region.


When all of these events are examined collectively, it shows clear problems for both businesses and ordinary consumers using phone services in Ireland today. If consumers are being overcharged for roaming prices, what other aspect of their telecommunications bills also need scrutiny?

In terms of business, these issues need even closer examination. The Cork Chamber of Commerce has found a 25% differential between costs for broadband services in the city compared with Dublin and comparable British regional cities.

Perhaps even more damning is the powerlessness of the telecoms regulator to ensure that not just Eircom but all the telecommunications providers are forced to fulfill the conditions of their service agreements. A Communications Bill from the Department of Public Enterprise is due to be published in ``mid-2001''. With the end of July rapidly approaching and the Dublin government on its summer break, it seems clear that this deadline is going to pass.

When An Phoblacht contacted the Public Enterprise Press Office, we were told that the Bill would be published in ``September or October'' and enacted in the Spring of 2002. It seems that the communications delays in the communications industry spreads far and wide.

An Phoblacht
44 Parnell Sq.
Dublin 1