A SENIOR European Commission civil servant has given a strong signal that Ireland may not be granted two of the three telecommunications derogations which it has requested from the European Union.
While Ireland may get a two-year derogation on the substantive issue of full competition on voice telephony, it now appears clear that, from next year, companies which have alternative communications networks will be able to compete with Telecom Eireann for certain business.
The head of telecommunications policy at the Commission's Directorate General for Competition (DG IV), Dr Herbert Ungerer, who was speaking at a major telecommunications conference in Dublin, also hinted that Ireland may not receive the desired four-year derogation on a directive which would allow mobile phone companies to by-pass the main national phone company for trunk and international calls. A shorter derogation on this issue now appears more likely.
The Commission's final decision on all the requested derogations is expected to be published by the end of next month.
Dr Ungerer also-gave an indication that Telecom Eireann might be forced to sell its 80 per cent stake in Cablelink as part of any agreement to grant a derogation on the main issue of full competition.
"It may be questionable whether Telecom's majority shareholding in the cable operator should be allowed to continue alongside a derogation until 2000 for voice telephony and public infrastructure," he said.
Dr Ungerer confirmed that the Commission had received 14 written responses in relation to the matter "nearly all of which opposed the requested derogations".
Ireland has requested a derogation until July 1999 for the implementation of the directive which will allow companies with alternative telecommunications infrastructures to compete with the exiting national phone company. But Dr Ungerer told delegates at the conference, organised by IBEC and Business & Finance magazine that conclusions of the public consultation were clearer and more vehement on this point than on any other.
"The alternative infrastructure market must be opened as soon as possible, if not by [during] 1996 at least by 1997," he said.
It is thought likely that this liberalisation of the telecommunications market will come into effect by the middle of this year, allowing companies with existing networks - such as Esat Digifone, the ESB, RTE and CIE - to compete with Telecom for what is known as closed-user business.
Closed users are normally large corporations or Government department, which have disparate business centres with their own private telephone networks, and this lucrative sector of the telecommunications market is likely to be opened to competition next year, according to industry sources.
Informal talks have already taken place between two semi-States and international telephone companies which could provide an international arm to any new competitive service for closed users.
The Government has also requested a four-year derogation on allowing mobile companies to handle international and trunk calls directly without the need to route them through the existing national telephone operator. Dr Ungerer cited arguments for and against granting the derogation, but hinted that a four-year derogation is unlikely.
He said the Irish market needed rapid liberalisation if Telecom's proposed strategic alliance with KPN/ Telia was "to go forward in the right market environment and to reap the benefits of the efforts to date".
He also told the conference that the Commission was taking legal proceedings against Ireland over its failure to implement a satellite liberalisation directive.
Proceedings were started last October but the Government had not made "an adequate response" to the legal proceedings and the Commission was "now moving onto the second stage".
