EIRCOM IS damaging the competitiveness of Irish telecommunications by mounting legal challenges to decisions of the Communications Regulator (ComReg), according to Chris Clark, chief executive of BT Ireland.
He says that BT is aggressively rolling out a next generation network in Britain because of competition but ComReg is being hampered in its efforts to foster a competitive environment by Eircom.
“As an incumbent operator, it [Eircom] has two ways to address competition – embrace it as a fact of life, or fight it and slowly walk back,” said Mr Clark. “In the last six months, Eircom has adopted the stance of fighting it and that damages competitiveness.”
Eircom has mounted a number of legal challenges to ComReg decisions in the last year, primarily related to a decision forcing it to cut the wholesale price of broadband lines.
“Eircom is using every technique in the book to block it,” he said.
Frustrated by the slow pace of change, BT pulled out of the residential telecoms market this summer when it entered into a joint venture with Vodafone.
The deal means BT’s home phone and broadband customers in the Republic are transferring to the mobile operator and BT will provide network services to Vodafone.
Mr Clark said that one of the reasons for teaming up with Vodafone was to “create a powerful competitor to Eircom at the retail level which we didn’t have the assets to do on our own”.
Despite this, he said, his comments were not based on sour grapes at being unable to crack Eircom’s 68 per cent share of the fixed line telecoms market.
“It’s about the position of Ireland Inc and the challenges we face in the short and medium term,” Mr Clark said. “Ireland has a huge amount going for it, such as skills, location and language, but there is an issue about the competitive piece.”
He cited local loop unbundling (LLU), the EU-mandated regime which allows competitors to place their equipment in Eircom telephone exchanges to sell fixed line services, as an example where competition has failed.
Just 3.4 per cent of DSL-based broadband subscriptions in Ireland are provided using LLU. Mr Clark said that figure was about 30 per cent in major European markets.
“Why is that?” he asked rhetorically. “There is a number of arguments put forward about the geography of the country not making it economical to invest. That’s absolutely not the case. The reason is that Eircom’s price for LLU is not economic.”
Despite this, he said Vodafone and BT were still committed to providing LLU-based services to 65 per cent of the population. By opting to make that investment, Vodafone would be able to set the speeds and quality of services that it provided to consumers.
“What we believe is that the country needs LLU because it is a drive to next generation networks – an imperative driver,” he said.
Although BT was in a “quiet period” in advance of releasing its financial results on November 13th, Mr Clark said the partnership with Vodafone was “going well”.
