Consumers to benefit as Eircom cuts cost of broadband

Eircom plans to slash wholesale broadband connection fees by €130 in a promotion aimed at dramatically increasing the numbers signed up to the high-speed service. The move could lead to free connection offers for consumers.

The company will today unveil a three-month promotion that will see it cut the wholesale broadband connection charge from €150 to €20. The immediate beneficiaries will be the licensed operators supplying broadband services to businesses and consumers, and Eircom's retail arm. The connection fee is a once-off payment.

The company's commercial director, Mr David McRedmond, told The Irish Times that Eircom hoped the independent operators would pass on the benefit of the reduction to subscribers. He said the deal was aimed at increasing the pace at which Irish people have been signing up to broadband.

Currently, there are 10,000 broadband users in this country. Eircom wants this increased to 100,000 across both its own and the independent operators' customer bases by the end of 2005. The company has so far rolled out 860,000 broadband lines, which it says is "well over half" what is needed to cover the country as a whole.

The offer, which it is making available for an initial three months, will apply to all lines and all operators. At the weekend, some sources suggested that the independent players may go as far as offering free connection to new customers.

Mr McRedmond said that as the company had spare broadband capacity, the cost of the offer was not an issue. "If we get good take-up, then we are building revenue streams for the future, and we believe it's worthwhile investing in that now," he said. The company would review the offer at the end of the three-months and then make a decision about its next step, he added.

Eircom is hoping that two factors will drive a good response to the offer. The first is that internet use increases in the autumn, partly because schools and colleges return. The second is the usual increase in consumer spending that precedes Christmas.

Broadband gives high-speed access to the internet and data services. Internet use is now beginning to overtake telephone calls as the primary use for fixed telephone lines.

This week's quarterly market report from the Commission for Communications Regulation (ComReg) showed that 40 per cent of all Irish fixed-line traffic during the three months to the end of June was internet use, while telephone calls accounted for 39 per cent of traffic.