Telecom to cut phone bills by £200m


Telecom Eireann is to cut phone call costs by over £200 million in the next three years with further major savings to be targeted at inland calls, the company said yesterday. As revealed in Saturday's Irish Times, Telecom is to reduce the cost of long distance (trunk) calls within Ireland by up to one-third. The company is also reducing substantially call costs for high volume users.

The total package announced yesterday will save both business and residential users £43 million. It becomes effective from next Friday.

The reductions will mean that the average cost of an inland call - to a destination over 56 kilometres away - will fall from 18p to 12p per minute. When VAT is added the rate fall from 21p to 15p per minute at the standard rate. The reduced rate, including VAT, is falling to 10p per minute. The special weekend trunk rate of 11.5p for 10 minutes remains.

The cost of ISDN data calls is being reduced to the rate of ordinary telephone calls, resulting in savings of up to 45 per cent on national calls and 33 per cent on international calls.

ISDN lines are used for transferring voice and data including internet access, video conferencing and filing. They were previously charged at a premium rate.

Around 90 per cent of businesses in Ireland have ISDN access. By the middle of next year, full national coverage will be available, according to Telecom.

In a statement last night, Telecom's chief executive, Mr Alfie Kane, said the by the end of the financial year, Telecom will have reduced charges by over £200 million over the last three years. "In that period the cost of long distance national calls and international calls have halved and our plan is to achieve similar reductions over the next three years," he said.

The company has also announced sharp reductions in the cost of calls to the Pacific Rim countries. Charges will fall from £1.45 to 97p, a reduction of 33 per cent in calls to Hong Kong, Indonesia, Japan, Singapore, Philippines, Thailand, South Korea and Taiwan. Calls to the Pacific Rim are charged at the one rate all the time. It is believed these reductions are in response to the growing amount of trade companies based in Ireland are doing with those countries.

Telecom has also re-aligned its business selections and multi-site volume discount packages. It means that large volume users could pay just 8p (excluding VAT) for each extra minute of standard use. The discount scheme is subscription based. It means that the dearest monthly rate subscription charge will fall from £1,080 to £450.

Last night a Telecom spokesman indicated that further substantial discounts on both trunk and ISDN calls would follow in 1998. It is understood that the company is trying to align its rate with those of British Telecom. Ironically, British Telecom is seeking a strategic alliance with Telecom, through a link-up with the ESB.

Telecom's latest package was first intimated last April, when the company announced a series of measures to reduce the cost of international calls.