Regulatory review stops short of recommending Eir split

ComReg published consultants’ report amid allegation of anti-competitive practices

Eir’s dominant position in the telecoms market in Ireland was examined  amid allegations of anti-competitive practices.

Eir’s dominant position in the telecoms market in Ireland was examined amid allegations of anti-competitive practices.

 

A regulatory review of Eir’s governance model has stopped short of calling for a complete separation of the former state monopoly’s wholesale and retail arms akin to what has been recommended for BT, Eir’s equivalent in the UK.

However, the review has advocated the creation of an independent oversight body within the company to manage greater separation between Eir’s retail business and its infrastructural arm, OpenEir, which sells space on its network to rival telcos as well as the company’s own retail arm.

Telecoms regulator ComReg commissioned consultants KPMG and Cartesian to examine Eir’s dominant position in the telecoms market here amid allegations of anti-competitive practices.

KPMG’s report said the oversight body should be made up of a majority of individuals, who do not sit on Eir’s board or who are not Eir employees and that the company should liaise with ComReg as to the appointment and remuneration of members.

Cartesian, which assessed Eir’s day-to-day risk-management protocols relating to its regulatory obligations, found Eir’s current regulatory model was insufficient to ensure full regulatory compliance.

“It is Cartesian’s view that the Regulatory Governance Model is not sufficiently robust and reliable to enable regulatory risks to be assessed and controls to be applied in a reliable and consistent manner,” it said.

Main rivals

ComReg will now solicit input from Eir and others in the telecoms sector. Responding to the publication of the reports, an Eir spokesman said: “This is the latest development in the ongoing review of the Regulatory Governance Model.”

“We remain engaged with ComReg and we are interested in what comments and inputs industry has,” he said.

However, telecoms advocacy group Alto, which represents several of Eir’s main rivals, said the reports vindicated previous anti-competitive allegations made against Eir.

“ComReg is to be highly commended for undertaking proper and thorough independent analysis of what industry has long-suspected to be systemic regulatory and governance failings,” Alto chairman Ronan Lupton said. “These failings arise in light of clear admissions by Eir in many instances or by compliance activity undertaken by ComReg.”

Separately, ComReg said it had been addressing ongoing problems with Eir’s compliance with its regulatory obligations and had initiated court proceedings against the company in respect of five findings of breaches of its regulatory obligations over a period from July 2011 to July 2015.

“A number of other investigations are also ongoing, including investigations which are concerned with matters addressed in the advisors’ reports,” it said.