Lobby group calls for 'functional' split of Eircom

Telecoms lobby group Alto yesterday called for a "functional" separation of Eircom's business rather than a full structural split of its network and retail arms.

At a members' seminar in Dublin, Alto chairman Liam O'Halloran urged ComReg and the Government to reject any Eircom offer to sell its retail arm and its Meteor mobile phone business.

"At present, the only motivation Eircom's owners have for investing in its infrastructure is to enable its retail arm to sell more value-added services to customers and indeed to maintain service levels and meet its universal public service obligation," Mr O'Halloran said. "If Babcock & Brown [ Eircom's Australian owners] no longer has a retail business and customer base to worry about, that motivation will be removed. It will be free to emphasise high-margin products."

Mr O'Halloran said prices to businesses and consumers would rise further, while service standards and broadband availability would decline.

Paul Swain, New Zealand's former telecoms minister, told Alto delegates that functional separation was the "right thing" for consumers.

"We passed legislation that will separate the incumbent into three parts - a core network infrastructure that is potentially competitive, a wholesale access arm that is a monopoly, and a competitive retail arm providing services to consumers and businesses," he said.