Eircom blocked on client win-back plan

The telecoms regulator has moved to stop Eircom trying to win back customers it loses to rivals

The telecoms regulator has moved to stop Eircom trying to win back customers it loses to rivals. Tough new regulations will be introduced to bar the company from contacting customers who switch to its competitors.

Eircom will not be allowed to contact customers who switch to rival firms for up to a year. The steps are being taken following a study showing the majority of customers who leave Eircom return within about a year. These rules will also apply to Eircom's rivals, but they only have 10 per cent of the market.

The regulator, ComReg, will use the regulations to boost competition in the fixed-line telecoms market, which remains dominated by Eircom, despite the market having been liberalised for several years.

Figures published by ComReg yesterday show 93 per cent of customers who moved to an alternative operator from Eircom in a six-month trial period last year later switched back to Eircom.

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ComReg said this level of churn raised concern about the operation of the market in terms of delivering value to customers.

It highlighted an increasing number of complaints from firms regarding the "win-back" activities by a range of operators.

Consumers had also complained that sales campaigns were becoming more focused, and in some cases aggressive, concluded ComReg.

The most common complaints by consumers included excessive contacts aimed at "win back", telephone contact with consumer within the first billing period and misleading price comparisons.

ComReg has prepared three draft regulations designed to reduce the amount of churn in the market and will consult for at least a month before introducing a direction. Each regulation places a moratorium on "win-back" campaigns ranging from four months to a year. This would apply to all operators, not just Eircom.

Under all three regulations, customers would be free to switch to telephone suppliers of their choice, said ComReg.

Mr David McRedmond, Eircom's director of strategy, said Eircom would oppose any moratorium on contacting former customers for up to a year.

He said the plan was a drastic measure that would reduce competition and deny consumers a choice.

He said he was not aware of any aggressive campaigns conducted by Eircom's salespeople.

Esat BT, Eircom's main rival in the domestic telecoms market, said it was very pleased about the proposals.

Meanwhile, a separate stand-off between Eircom and ComReg on the pricing of partial private circuits - a product crucial to boosting the uptake of broadband - has been resolved, at least temporarily.