Lower prices should follow Telecom move

All telephone users across the Republic will be able to choose their phone company by December 15th, the telecommunications regulator, Ms Etain Doyle, has said. They may have to wait a further two weeks - until January 1st 1999 - to be able to move from one service provider to another without changing number, she added.

In a statement, Ms Doyle said she hoped the move to end Telecom Eireann's monopoly on voice telephony would "accelerate the company's reductions in prices and help bring these prices closer to European averages". Telecom Eireann has already promised to speed up its programme of price cuts, bringing rates to inside "the top quartile of OECD countries".

The regulator said that, while there was a lot of work ahead for her office, she was confident she could deliver the framework necessary to facilitate a smooth transition to a liberalised market before the end of the year.

Several key elements of the licensing regime yet to be decided, she added, including the use of radio for voice telephony, quality of service standards and the provision of universal service. The interconnection regime was another essential piece in the competitive jigsaw, she indicated, including the interconnection rates at which rival telecoms companies can access the Telecom Eireann network and the disputes procedures.

The regulator said her office would hold a consultative workshop on June 10th to allow interested parties to give their views on all key issues.

Meanwhile, companies that expect to compete from December appeared to be jostling for position in advance of the regulator's final decisions - Esat Telecom yesterday criticised Telecom Eireann's emphasis on universal service provision.

Under EU law, one company must provide a "universal service" - offering the same products at the same prices to everyone in the State. The issue for the regulator is who should have to pay for providing such a service to remote homes and businesses, where there is no prospect of an economic return on the investment.

Telecom Eireann argued this week that as soon as competition begins, it should be compensated for having to provide of universal service. Its chief executive, Mr Alfie Kane, suggested the company might even be compensated retrospectively for the infrastructure it has laid down recently.

Esat Telecom's chairman, Mr Denis O'Brien, yesterday launched a broadside against such proposals, arguing that providing a universal service actually gave Telecom Eireann an advantage.

"Experience in other jurisdictions has shown that a universal service obligation represents a net financial opportunity for the incumbent, not only in monetary terms but also in terms of the marketing and sales advantages that are afforded by having a ubiquitous network," Mr O'Brien said.

Esat suggested Telecom Eireann might have to compensate its competitors, not the other way around.

The claim was dismissed by Telecom Eireann's head of corporate communications, Mr Gerry O'Sullivan. "There are standard EU directives to deal with this whole area, and we simply assume that they will be applied to the Irish marketplace when the derogation ends."