EIRCOM HAS told other telecoms operators and the Communications Regulator (ComReg) it will have to invest €200 million in its network if it is to meet new targets for reducing the number of faults on its network.
From June next, Eircom is obliged to meet new targets which will reduce the number of faults on the telephone network and set more stringent repair targets.
Under EU telecoms regulation, ComReg will be able to go to the High Court to seek financial penalties if Eircom misses the targets.
It is unclear whether Eircom will be able to invest €200 million over the next three years given the ongoing credit crunch, the recent rapid deterioration in its finances and its large debts.
The telco currently has a debt burden of over €3.7 billion.
Both ComReg and competing telecoms operators have become frustrated at the level of faults on the Eircom network and the time the company takes to repair them.
The figures are much higher than those in similar-sized European countries, and ComReg set the new targets last May to bring Eircom into synch with its peers. Currently the number of faults and the time taken to repair them is reported on a quarterly basis, but no action is taken if Eircom fails to meet the targets set.
In the first quarter of 2008, 80 per cent of residential faults were fixed within 33.1 hours, but this will have to be reduced to 16 hours from June.
An Eircom spokesman said the “reality is these are simply challenging targets”.
He said the company’s stated preference was to invest in “next-generation networks rather than legacy networks”.
Telecoms industry sources say the copper-based Eircom telephone network is in an extremely poor condition as not enough has been invested in its maintenance.
The spokesman said the telco was spending €100 million this year on “preventative maintenance” measures.
Separately, it is upgrading the core of its network to next-generation technology which will support faster broadband speeds and the introduction of new services. This involves a €60 million spend, and work has been substantially completed in the Dublin area.
To provide faster broadband to consumers Eircom would need to upgrade its access network.
Eircom has tested technology known as fibre to the cabinet, which would replace large parts of the copper network with high-speed fibre-optic cables. Even if this was only done in Dublin and other major cities the cost would be over €1 billion.
Eircom sought Government investment of €150 million for a €500 million plan to provide 25Mbit/sec broadband to 70 per cent of the population. Minister for Communications Eamon Ryan rejected the plan in May 2008, saying: “Providing money to Eircom is not the direction we should be investing public money in.”
