Eircom criticised over price changes

 

Eircom customers will see their phone bills rise by an average of 3 per cent from July when a new pricing structure is implemented.

In a move that was sharply criticised by lobby groups, Eircom announced today that from July 1st, calls that exceed the terms of a customer's phone package or bundle will be rounded up to the next minute. Currently “out of bundle” call time is billed on a per second basis.

"The industry is moving in that direction… in terms of charging," a spokesman for the telecommunications provider said.

On average, bills will rise by about 3 per cent as a result of the change, according to Eircom.

The National Consumer Agency said that it was disappointing to see Eircom moving away from per second pricing and back to the “old style” per minute pricing “where the customer is paying for time on the phone that they’re not using”.

Dermott Jewell, chief executive of the Consumer Association, said that the price hike was poorly thought-out and represented a backwards step. “I’m amazed that they would even have considered an increase at this time,” he said.

“This is going to bring a lot of money into the coffers, not of the consumer, but of the provider,” he said.

“For many years the goal [in the Irish market] was to get to a point where we were progressive and charging per second as it made good, logical sense,” he said.

Eircom may have “shot themselves in the foot” with this price increase, Mr Jewell predicted, as it could trigger consumers to switch to another provider.

The Eircom spokesman said that while it was a difficult decision, the price increase was important from a strategic perspective.

"We understand that any price change in the current climate is a concern to people," said Stephen Beynon, group managing director of consumer and small business at Eircom.

Mr Beynon said that “a significant portion” of Eircom’s customer base will be unaffected by the price change. However the company spokesman said that it was not possible to estimate how many customers would be hit by the hike.

Line rental, broadband and bundle prices will not be affected by the latest price changes.

The company also announced today that it is to simplify the charges that apply to calls from landlines to mobile phones. From July 1st, a new set of flat-rate prices for calls to O2, Vodafone and Meteor mobiles will be introduced. This will replace the current system, whereby the cost of such calls varies depending on the mobile operator.

In addition, a call set-up fee will replace the minimum call fee for customers on Eircom’s small business packages.

Result released by Eircom last week showed that sales had slipped by 9 per cent in the nine months to the end of March 2010, and group revenues were down by €1.38 billion.