Exchequer to gain as telecoms watchdog reaps #30m surplus

The telecoms regulator, Ms Etain Doyle, reported a £23.99 million (#30 million) surplus for her office in the year to the end of June 2000. The sum was gained on revenues of £36.64 million which were paid to Ms Doyle's office as levies, licence fees and other income. The surplus is likely to return to the Exchequer.

The report indicates that independent regulation of the telecoms sector was highly lucrative when the State exited the business by floating Telecom Eireann, now Eircom, in mid-1999.

Figures contained in the latest annual report of the Office of the Director of Telecoms Regulation, which has not yet been published, also reveal that Ms Doyle made a provision for legal actions against the office of £2.37 million. This figure fell from £3.09 million a year earlier.

Ms Doyle's report said it was her policy to defend vigorously all legal actions against her office. She cited a successful Supreme Court appeal against the challenge by Orange against her award of the third mobile-phone licence to Meteor.

The office spent £5.09 million on technical advice, an increase from £3.86 million in the previous year.

It is thought the bulk of the surplus was attributable to once-off "spectrum income" of £21.38 million. The report said the office received no such income the previous year.

According to one informed person, this income was generated from Meteor and the two incumbents, Eircell and Esat Digifone.

Rapid expansion of the market and the award of the licence to Meteor meant greater capacity was required in the frequency channels used by mobile operators.

Because such frequency is a national asset, the operators had to pay for its expansion. It is understood that process happened early in 2000.

The report said the surplus was "payable to the Central Fund", i.e. the Exchequer. Such sums are treated as a distribution from the retained surplus generated from operations, though no surplus was carried forward in 1999-2000 or in the previous year.

The surplus returned to the State in 1998-99 was only £162,000.

The report said radio and communications licensing revenue grew to £5.6 million from £4.23 million in the period and telecoms administration levies grew to £3.64 million from £3.16 million.

Revenue from cable and MMDS licensing was £2.94 million, up from £2.56 million a year earlier. Administrative fees grew to £2.42 million from £879,000.

Employee costs grew to £3.13 million from £2.5 million while advertising costs fell to £126,000 from £155,000.

Administrative expenses grew to £551,000 from £455,000 while premises and related matters cost £678,000 as against £491,000 a year earlier.

Under capital reserves, the office had an opening balance of £479,000, against £307,000 a year earlier. Its closing balance was £388,000, down from £479,000 a year earlier.