Getting best telephone connection

With the arrival of two new players offering residential phone services in recent weeks, consumers now have a wide range of operators from which to choose. But trying to figure out who offers the best deal can be confusing at best, given what often amounts to conflicting claims about prices and charges.

Never has reading the small print in the marketing and promotional literature been so important.

Six phone companies now compete in the Irish residential market: Eircom (the former Telecom Eireann), Esat Clear, Ocean, Swiftcall, and newcomers Interoute Ireland, which launched in August, and Switchcom which began offering a residential service on September 1st.

Each has its own marketing pitch. Some highlight the convenience of their pre-paid services which can make it easier to budget your calls and control your spending, especially on international calls. Others promote their low minimum call charges which can be an important consideration if you make lots of short, local daytime calls. Several offer discounts for heavy phone use, although in the case of Eircom these are not automatic and you have to apply to join Eircom's two discount schemes. And everyone, it seems, claims to offer the best rate - although that price may not apply at the time you want to make your call and may involve other, hidden charges.

Eircom has come in for some heavy criticism in this regard. On July 1st, it switched from unit-pricing to per-second pricing and began advertising local call rates of 1p per minute in the evenings and at weekends, the cheapest rates on the market. What was not highlighted was that a minimum charge of 12p applied before the 1p rate came into effect.

In a statement, Eircom denied that its 1p-per-minute campaign was misleading and said competitors' reactions showed they were "obviously concerned about the fact that Eircom offer the most competitive rate for local and national calls".

So who really offers the best package? That depends on the volume of calls you make, the destination, the time you spend on the phone and whether your calls are daytime, evening or weekends.

According to an Eircom spokesperson, 75 per cent of calls are local and the vast bulk of those are made in the evenings and at weekends. Only about 3 per cent of residential calls are international.

The Irish Times compared rates across the six companies for local, national, fixed to mobile, UK and US calls and found that:

Eircom was the most expensive for international calls but worked out cheaper for local calls during the evening and weekends and national calls at the weekend - provided the calls lasted longer than 12 minutes. Eircom's minimum call charge of 12p was more than double that of its nearest competitor.

Esat Clear and newcomer Interoute - which operates under the Spirit brand name - offer broadly similar prices on local and national calls, with Interoute's prices marginally lower than Esat's. Their minimum call charges at 5.1p and 5p respectively make either an attractive choice if you make a lot of short, daytime calls.

Ocean has the lowest minimum charge rate at 3.63p, but has no local phone service.

Competition is strongest at the international end of the market, with Interoute significantly ahead of Eircom, Esat Clear and Ocean, and marginally ahead of the two pre-paid service operators, Swiftcall and Switchcom. Interoute charges 8.5p per minute on calls to the UK any time during the day, compared with Eircom (16p peak/13p weekends), Esat (13.9p peak, 9.7p weekend), Ocean (10.87p peak/8.82p weekend), Swiftcall (10p peak/9p weekend) and Switchcom (9p any time). Interoute's prices to the US were also lower across the board.

Access is another issue to bear in mind when considering whether to switch operators.

Swiftcall and Switchcom, for instance, are both pre-paid services. You must first open an account and lodge a minimum amount of money - £25 (€32) in the case of Swiftcall, £20 for Switchcom. To actually make a call, Swiftcall customers dial a five-digit free access number, then the number they wish to call. Switchcom customers, however, must dial a 10-digit freephone access number, followed by a 10-digit personal identification number (PIN), before they can dial their phone number.

If you opt for Esat Clear, Ocean and Interoute, you must attach a router, a device about the size of a bar of soap, into your phone socket. This diverts calls from the Eircom network to your chosen provider. Ocean and Interoute will post out the router for you to attach while Esat sends an engineer to install it.

Industry sources say the need to use a router or dial an access code, together with the requirement to change your phone number if you change providers, has put most people off switching phone companies. Despite deregulation of the telecoms market last December, the vast majority of consumers have stayed with the operator they know - Telecom Eireann, or Eircom as it is now known.

From next year, however, consumers will be able to change to a new telecommunications company without having to change their phone numbers. They will also be able to "pre-select" the operators they wish to use for national and international calls. Once they sign an agreement with their chosen provider, all relevant calls will be automatically delivered by the chosen operator without the need for the customer to install routers or dial special access codes.

This means that a customer could, for example, choose Interoute/Spirit for his or her international calls and Eircom for local and national calls. Alternatively, the customer could decide to have Esat, or another company, provide all three services. Customers will still, however, have to pay line rental to Eircom, pending what is known as "unbundling of the local loop", when control of the last section of cabling entering each customer's house is opened to competition.

Although local loop unbundling is still some time away, number portability and carrier pre-selection will mean increased choice for consumers. As existing players vie for market share and more new players enter the market consumers can expect another round of price cuts.

"We've made a very firm commitment that the only way prices are going, as far as we are concerned, is down," says Mr David Ryan, chief executive of Interoute Ireland.

New products and services are also coming. Esat is set to roll out flat-rate Internet pricing and a combined computer and Internet access package in coming weeks. Spirit will launch its Internet offering in November and says it will introduce a pan-European pricing structure for international calls next spring.

"I think it's brilliant to see others coming into the market because the more competitors that come in, the more the public will become aware of alternatives and move away from the incumbent, Telecom Eireann, and that will be good for the industry," says Mr Andrew Conlan-Trant, head of marketing at Ocean.

Increased competition should also be good for consumers. Just remember to read the small print.