BT Ireland report criticises its failure to 'unbundle' telephone lines, writes Jamie Smyth, Technology Reporter.
Eircom needs to embrace radical organisational and management change or Ireland will face five tough years of stagnation in telecoms and internet provision.
The Government must also create a more coherent strategy to encourage competition and attract investment, the second biggest fixed-line operator, BT Ireland, has warned the regulator, ComReg.
In a submission entitled BT Ireland's Strategic Review of the Irish Telecoms Sector, the firm outlines key bottlenecks in the market, particularly the failure of Eircom to offer equal access to its network that runs into almost all homes and businesses.
Currently, fewer than 3,000 Eircom telephone lines have been fully opened for use by alternative operators through a process known as "unbundling".
Eircom's failure to offer rivals equal access to the firm's local access network is a big disincentive for rivals to invest in new telecoms infrastructure, says BT Ireland, which warns that Irish competitiveness is being undermined.
To promote more investment and a vibrant telecoms sector, BT Ireland recommends that Eircom undertakes substantial internal change, including changes to organisation and management structures.
Changes to culture, transparency of internal policies and processes and better control over information flows are also required for the industry to grow.
However, the paper stops short of asking ComReg to split Eircom into two separate companies in a bid to make it easier for rivals to get better access to its local network.
Instead, BT Ireland suggests that Eircom should set up a access services division to offer competitors wholesale access to its local network.
The BT Ireland paper is part of a consultation process initiated by ComReg to determine future Government and regulatory strategy for the industry.
BT Ireland also severely criticises the Government strategy of investing directly in telecoms infrastructure through its construction of metropolitan area networks in towns.
This type of State policy is unlikely to succeed because it acts as a disincentive to private investment, it said.
"State and semi-state infrastructure development could be in breach of EU obligations, may not be the most conducive way of spending tax payers money and, in addition, could harm investment decisions by private companies," says the submission.
BT Ireland says it could have brought greater change and innovation to the market had Government policy challenged and supported industry and the regulator instead of State and semi-state investment in infrastructure.
The firm also criticises the State's decision to set up an appeals panel to oversee decisions made by ComReg.
ComReg should be given more power to ensure that economic bottlenecks are opened to competition, says BT Ireland, which predicts that Ireland is at a watershed between becoming a "fibre-nation" or a "hiber-nation".
