Telecom Eireann to cut Internet cost by 33%

Telecom Eireann is to cut the cost of Internet usage in January when it introduces a 33 per cent reduction in charges for peak time connection to the Internet.

The move was announced last night following the publication yesterday of a new report which seeks to transform Ireland into a leading international digital economy.

Reducing the cost of Internet access is one of the main recommendations in the report of the Government's Advisory Committee on Telecommunications which suggests that Ireland could take a lead role in electronic commerce.

"Given that neither physical size nor location necessarily dictate success, Ireland can, with appropriate strategic positioning, sustain its position as Europe's premier knowledge economy," says the report of the committee which was set up by the Department of Public Enterprise, and included several leading US experts on telecoms and the Internet.

Advisory committee members made it clear that they also believe Ireland can spur changes in the EU's traditionally more regulated and protectionist attitudes towards the telecoms industry. Many analysts believe this has led to a much slower growth in Internet usage compared to the US.

"There are elements in this report which are in the vanguard of EU policy and could put Ireland to the forefront in this area," said Mr Dennis Gilhooly, information infrastructure adviser to the World Bank and a member of the committee.

The report was welcomed by Public Enterprise Minister, Ms O'Rourke, who hailed it as a watershed and a "Red Letter day" for Ireland and business on the Internet.

The 24-page report makes 10 recommendations which support an overall objective - that Ireland commit to a liberalised telecommunications market; encourage global telecommunications and Internet operators to locate here and work to position the nation as a global leader in electronic commerce.

The recommendations include policy and mindset changes in the area of telecommunications regulation and competition, Internet access and the ways in which people and businesses connect to it, e-commerce, "entrepreneurial culture" and education.

Committee member Mr Vinton Cerf, a vice president of telecommunications company MCI and considered one of the pioneering engineers of the Internet, said one of the most important issues is to ensure there is sufficient Internet capacity to the US and Europe to accommodate foreseeable needs generated both from Irish industry and from foreign businesses locating in Ireland.

The report criticises the current state of telecommunications and Internet services.

It warns that while a move to embrace e-commerce would offer unlimited opportunities, failing to do so could have serious consequences, including the migration of companies based here to e-commerce-friendly nations, a decline in Ireland's image as an attractive investment location and job losses.

Meanwhile, Telecom's carefully timed Internet access reduction announcement, late yesterday afternoon, was also welcomed by the Department of Public Enterprise. Telecom claims it will position Ireland as the third cheapest country in Europe for peak rate Internet access. During off-peak times, Telecom's rate of under 50p an hour remains the same.

In addition, Telecom said it would introduce a range of new Internet access services for residential and business users from January next.