Eircom forecasts lower broadband charges

Eircom is set to introduce a new business broadband product which will cost more than €2,450 a year, while insisting that broadband charges are likely to drop in 2008.

Eircom is set to introduce a new high speed 12MBit/sec broadband product for business customers priced at €204.49 a month including VAT, which will be available from 49 exchanges.

This means Irish telecoms users will continue to be offered some of the slowest and most expensive broadband services in Europe.

A Forfás broadband study released last week showed that a 16Mbit/sec connection costs €44.50 a month in Germany, while a faster 18Mbit/sec broadband service costs €44.16 a month in France. In Sweden a service that is twice as fast as the new Eircom offering costs €100 a month.

"Optimum development of the enterprise sector and of e-business in Ireland will require a wider range of higher speed broadband services to be available," said Forfás chief executive Martin Cronin.

Eircom has informed other operators that the wholesale price for the new product will be €96. The dominant telco is obliged to offer other operators a wholesale version of all products it sells directly to consumers.

Last night an Eircom spokesman said "there will be greater value for broadband customers on offer in 2008". He also said the new product was not intended for consumers but for the "specific needs of a small number of high bandwidth users".

ComReg, the telecoms regulator, published a note on its website on Friday which confirmed that Eircom and ComReg have started a review of the price controls on wholesale broadband products. In 2005 Eircom was designated as having significant market power in the provision of broadband services to other operators and so ComReg was able to impose price controls.

The ComReg publication said pricing would change to reflect developments in the market. The price controls will also reflect new information on the costs of providing the service as well as the volume of usage. ComReg said it is hoped the review will be "completed by early 2008" with a new wholesale pricing formula to be published shortly after.

Liam O'Halloran, chairman of Alto, which represents the alternative operators, welcomed the price review and said he was aware that ComReg was assessing the pricing of a number of services related to broadband.