Eircom is proposing a 25 per cent reduction in the monthly fees it would charge other telecoms operators for using its local network.
The Irish Times has learned the company has told telecoms regulator, Ms Etain Doyle, that it would offer access to its local copper network for a monthly charge of less than €25.
This is a reduction of at least €7.5 from its first reference offer of €32.5, which it published on December 31st last. But the new charge remains among the highest proposed within the European Union.
Eircom sources said last night the company was able to reduce the charge because of "efficiencies in the automation process" and an improved ability to measure demand for access to its local network.
However, the new price is considerably above the price being sought by the regulator, which is understood to be between €12 and €17. And Ms Doyle is expected to formally reject Eircom's latest offer.
The charges which incumbent operators levy on competitors to their local network through "local loop unbundling" are critical in encouraging competition in voice and data services.
In the Republic, where a single local loop has yet to be unbundled despite an EC regulation that mandated the process by January 1st, high access charges are a major point of contention.
Several operators have said the costs proposed by Eircom have forced them to drop plans to seek access to local loops and develop innovative technologies.
Approximately 28 local exchanges in the Republic's major urban centres were originally identified by several companies as attractive for unbundled services. However, only Esat is currently engaged with the unbundling process.
Last week, Ms Doyle said she would issue an update on the pricing issue by the end of March. Under legislation, the regulator can issue a directive to force Eircom to offer competitors access at a lower price.
It is understood that Ms Doyle will reject Eircom's latest offer and push for a figure closer to the European monthly average of between €12 and €17 per line.
The regulator has also decided to complete an examination of Eircom's willingness to provide adequate information to other operators.
This has been a bone of contention for operators such as Esat, which claims it has been unable to prepare a business plan without accurate information.
However, Mr Pat Galvin, head of regulatory affairs at Eircom, said any move to introduce a price that did not allow it to recoup its investment was "clearly a serious issue".
When pressed, Mr Galvin would not rule out legal action by Eircom to protect the company's network investment.
He said charging a monthly fee at similar levels to the European average would not enable Eircom to recoup its network investment costs.
"The diseconomies of scale in the Irish market are such that it makes local loop unbundling expensive," said Mr Galvin. "Irish demography and population density is about 40 per cent, compared to 90 per cent in many countries in Europe."
The regulator is expected to issue a statement on local loop unbundling before the end of the month.
