Trunk call rates face sharp cuts

TRUNK call rates are likely to be halved within the next five years, according to the chief executive of Telecom Eireann, Mr Alfie Kane. Mr Kane added that the cuts in charges "could happen well before then".

Last year, Mr Kane predicted that the cost of international calls would be halved within five years. This was followed by an announcement earlier this year that the cost of such calls was to be reduced by up to 37 per cent as part of a £20 million reduction initiative.

Trunk call rates were reduced by 20 per cent as part of the same initiative. Mr Kane, who was speaking after the Price Waterhouse Foresight Business Breakfast in Trinity College, Dublin, yesterday, was less forthcoming on the prospects of sizeable reductions in business call rates.

He said it was "difficult to predict" what would happen to local call rates. He added, however, that there would certainly be "discounts and reductions" in the cost of local calls.

It is understood that local call charges are unlikely to change from their current levels within the next five years.

According to an internal Telecom Eireann document, a copy of which has been seen by The Irish Times, Ireland ranks midway in any comparison of local call charges in the EU.

The most expensive country is Italy, where a three minute local call cost 15.1p (excluding VAT), and the cheapest country is Greece, where the same call costs 2.7p. In Ireland a three minute local call costs 9.5p.

A similar story emerges when trunk calls are compared. A standard three minute trunk call costs 57p (excluding VAT) here, compared to 99p in Austria and 9p in Luxembourg.

According to the document, Ireland fares particularly well when the costs of long distance calls are compared. At 55p per minute for a standard call, Ireland ranks the fourth cheapest country in the EU for a standard call to the United States.

Diners at yesterday's breakfast included the chairman of ESB, Mr William McCann, and the managing director of Guinness Group, Mr Colin Storm.

Mr Kane told them that: "Telecommunications is the world's fastest growing business, but the key tact is that it is becoming more crucial to business success with every day that passes. On telecoms depends the flow of time sensitive information that, more and more, is becoming the source of adding value in business."

Outlining the need for a "total transformation" of Telecom Eireann, Mr Kane said that, in terms of Telecom's national economic contribution, "results are already beginning to flow". As a example he cited the fact the 40 per cent of all international call centres in the EU are now located in Ireland.