Eir’s broadband market dominance ‘to detriment’ of consumers

More needs to be done to address the dominance of Eir in the Irish broadband market as the current situation is to the detriment of consumers, an Oireachtas committee has heard.

The Association of Licensed Telecommunications Operators (Alto), which includes competitors such as Sky, Vodafone and Virgin Media, said consumers would benefit if there were a more level playing field in the sector.

Rival companies rely on elements of the Eir network in order to offer their own broadband services. Eir was sold to a consortium led by French billionaire Xavier Niel earlier this year.

In a submission to the Oireachtas Communications Committee on Tuesday, Alto expressed concerns about Eir's historic dominance of the market and the need for reform that would encourage greater access to other providers.

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“Only deeper structural remedies can provide for the right competitive environment, and a balanced and equitable regulatory regime – with operators competing on a level playing field, investing in new fibre technologies and innovating by bringing new services to the market, which will ultimately be to the benefit of the Irish consumer,” the group said.

“The market is imbalanced to the detriment of Irish consumers, which cannot continue if operators are to invest with confidence.”

It said wholesale connection charges in Ireland were more than twice that of the UK and multiples of the rates in other EU countries.

Connection charge

In its submission, it said operators connecting customers through Eir’s fibre network must pay it €272, compared with €114 for a similar connection charge in the UK.

While the market remains “relatively reliant” on Eir for the delivery of services, Alto said not enough had been done by the company to facilitate greater competition.

It pointed to Eir’s regulatory governance model (RGM), a “reform process” initiated in 2011 requiring it to follow regulatory approaches closer in practice to the energy sector. However, the committee was told that, since March 2012, Eir’s management was preoccupied with the company’s sale.

“Alto is unaware whether Eir intends to continue with its RGM efforts and disclosures or to close down the process entirely,” it said. “What we do know is that key personnel working in these areas have since left the company, and as far as we have been led to believe, have not been replaced.”

The organisation believes part of the solution to market reform is the introduction of “functional separation” to Eir – the division of wholesale and retail pricing operations.

It has also said ComReg, the industry regulator, is significantly under-resourced and lacking in sufficient powers to ensure fair play in the market.

Alto chairman Ronan Lupton said there was a crucial requirement to provide the regulator with greater powers to bring sanctions and to provide it with about 70 extra staff members, up from 120, which would be industry-funded.

“There is a plethora of people needed to buffer that regulator,” he said.